Winners and losers for post-Covid portfolios

Analysts located in each of these key regions provide qualitative assessments of nearly 30 such indicators, as well as regular updates.

Although the nature of the sources, reports, and other public information relied upon for this dashboard are subject to regional variances, its findings seem to be in line with what large fund management groups are also suggesting.

Jeremy Podger, portfolio manager of the Fidelity Global Special Situations fund, said it is important to work out the implications of huge support programmes on government finances in the long-run, as this can affect the ability of countries to rebuild their economies.

He said: “On the economic front, economies will avoid a spiral into depression due to liquidity being provided by central banks and direct government support for labour markets. Nevertheless, the economic shock will take time to repair: economic forecasters currently assume that GDP will recover to 2019 levels in the second half of 2021, depending on country specifics.”

Globally, he said as earnings forecasts typically follow GDP progression (typically with a lag), Fidelity sees earnings consensus for 2020 moving down close to 30 per cent from where it was at the start of the year.

Sector views

When it comes to individual sectors, Mr Magnien said one should look at trends that emerged during lockdown, such as online shopping and home working.

Research by digital commerce specialist JGOO shows 33 per cent of people expect to do more shopping online because they have become used to doing so during the coronavirus lockdown.

“These are trends that are not going to go away and, therefore, you have to consider whether the High Street shops are still worth investing in, and whether office real estate will be a long-term safe bet,” added Mr Magnien.

“We can already see from the heat map that online banking has increased in usage again. For example, in Columbia, there has been a 40 per cent surge in usage. Again, bricks and mortar may disappear as more online banking apps are used globally.”

But while these trends may affect sectors such as technology and property, albeit for different reasons, it is important, according to Mr Podger, to look at individual names and how their own earnings are likely to progress over the next three years, compared to previous expectations.

Individual companies

Mark Walker, managing partner at Tollymore Investment Partners, agrees it is important to drill down into company specifics to avoid risky blow-ups and stick with safer, perhaps less exciting, stocks.

He said: “Credit conditions of recent times have possibly allowed weak companies to thrive. This event-driven macro-crisis may expose those firms who have been swimming naked. Likewise, investors, seduced by a decade of low finance costs, have geared up their investments, leaving them ill-equipped to invest counter-cyclically. Both dynamics may exacerbate quoted price declines.”