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These industries benefit from Coronavirus
Owners of Lufthansa or TUI shares have had to watch the share prices take a kind of nosedive in recent days. At over 40 percent, TUI has now even fallen to its lowest level since 1991. While global supply chains are currently failing, tran...sport and tourism are particularly affected.
Of all the theme ETFs on extraETF.com, Travel & Leisure ETFs have fallen the hardest with a monthly return of over minus 40 percent. On the other hand, consumer staples (keyword: toilet paper) and the e-sports industry are still doing quite well, although their prices have also been affected. One would think that health is booming at the moment, but with a monthly return of more than minus 20 percent, the situation is just about flat, which could change quickly as soon as the first drugs against corona are approved or a vaccine is developed.
The question of coronavirus-resistant financial products seems to be more justified than ever before by the general situation. And apart from the obvious "crisis winners" such as the manufacturers of pasta, toilet paper, disinfectants and all the other products that are now no longer or hardly ever on the supermarket or drugstore shelves, there are of course a number of other "winners" that may not be on the screen right away.
One loses, one wins
By the way, there are losers and winners in every crisis. How often do you think people have turned on their television sets in recent days - just to watch the news? TV (as an industry), now that the cinemas are closed and popular songs like the new James Bond have already had to be postponed, is currently attracting more and more viewers. Netflix is reporting rising viewer numbers, which is not surprising now that more and more households around the world are under curfew. The stock has dropped, but not significantly. Its also kind of logical that other streaming and video-on-demand services, as well as delivery services that deliver pasta, pizza, burgers, and even entire purchases to the front door, are also experiencing a boom.
The stay to home index
The investment house MKM Partners has now even summarized a large number of Corona winners in a new index. In their so-called Stay-at-Home Index there are a lot of companies whose products or services seem to be very useful for staying at home. For example, the aforementioned streaming provider Netflix, canned soup manufacturer Campell, detergent manufacturer Clorox, the video game icon Activision Blizzard, home trainer manufacturer Peloton, but also home office service providers such as the chat app Slack and video conferencing provider Zoom. But its not only the home office that benefits from the virus, but also the fear of "neighbours", at least as far as the USA is concerned: the weapons manufacturer Sturm Ruger is also part of the Stay-at-Home index. There is no ETF in this country that bets on this index.
More risk, more profit
Anyway, the question arises whether theme-based ETFs or the purchase of individual stocks are to be recommended at all? Corona or not. Examples such as Lufthansa or TUI show that you can fly very low with individual stocks. Examples such as Clorox or Campell show that you can also profit greatly from individual stocks. Analysts currently expect that the interest of buyers of basic consumer goods could soon shift to stimulants such as alcohol or chocolate.
MSCI World instead of single stocks?
Because like any other crisis, this one will pass. It is not possible to predict how quickly, but experts currently expect a brief review by the middle of the year. This is also one of the reasons, if not the main reason why the MSCI World Index is so popular with investors: You minimize the risk of a total loss because with a world ETF you always have the most successful companies in the world in your portfolio.
And even if prices do fall - the MSCI World has also lost over 20 percent since February - they have always gone up and set new records, at least if you look at the developments of the past 100 years.
Savings plan now?
So should we start a savings plan now? The American economist William Bernstein once put it this way: "If youre in your mid-twenties at the beginning of your savings period, get down on your knees and pray for the next crash."
The favourable prices could be a good time for long-term savers just starting out. One must not forget: hardly anyone can find the ideal time to start, and with long-term oriented savings goals of 20 years or more, it is not so decisive for the return. A long savings horizon is always better than picking the right stock in a crisis. Less risky anyway.