Investment
Times of turmoil create opportunities: deVere

With global stock markets rallying overnight, the chief executive of an independent financial advisory firm has pointed to key sectors that are benefiting from the spreading COVID-19 pandemic.

deVere Group founder and chief executive Nigel Green said despite the global downturn, there was still opportunities for growth.

"Every economic downturn creates a new normal. The one being triggered by the coronavirus pandemic will be the same," he said.

"The COVID-19 impact has hit firms across the world - there's been immense international disruption - with many sectors experiencing major issues of supply, demand, or both.

"However there remain some sections of the economy which are benefitting from the coronavirus fallout."

Investors are seeking out "new world" sectors to grow their wealth, Green said.

"This is evidenced by the tech-heavy Nasdaq Composite index which has done well, where other global indices have faltered," he said.

"New industries will come into their own and, as ever, there will be winners and losers.

"This will mean job losses in some sectors and huge - possibly unprecedented - job and investment opportunities in others."

He pointed to big tech as a likely winner, as well as pharmaceutical and healthcare firms, delivery brands, supermarkets and manufacturers of electronic goods.

Green said the world would "of course" recover from the economic impact of the virus, and that professional investors had already adjusted their portfolios accordingly.

"Times of immense [turmoil] can be times of great ingenuity, promise and opportunity," he said.

It comes as Morningstar releases its latest report on the emerging trends and disruptions across the global economy amid the pandemic.

Despite short-term growth being damaged, Morningstar predicts a global economic recovery next year.

"We expect near-term impact to be savage, shaving off 2 percentage points from global GDP growth," it said.

"However, we anticipate a vaccine ready to be deployed by mid-to late 2021, setting the stage for a return to normality. We expect a quick recovery of the global economy in 2021."

This will allow the global economy to undo most of this damage by 2024, Morningstar said.

The research house said there had been more buying than selling opportunities as of late, with the Australian benchmark currently trading 31% lower than its February highs.

"It has been difficult to keep on top of the rapidly shifting environment, but collectively we find more opportunities to buy than sell shares at the current level," Morningstar said.

Investors should look for companies with economic moats and financial strength, Morningstar said.

"We think there are a number of moaty names that investors should consider adding to their portfolios as well as heavily sold-down stocks that could see a good post-virus bounce," it said.

Morningstar analysts pointed to 10 Australian-listed high conviction undervalued stocks, which they believe, can withstand the COVID-19 crisis.

These only included two financials, those being Westpac and NAB.

Other picks included BHP Group, Blackmores, Premier Investments, Super Retail Group, Telstra, Unibail-Rodamco-Westfield, Viva Energy, and Woodside Petroleum.

Read more: MorningstardeVere GroupNABNigel GreenWestpac
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