Best and worst performing UK FTSE All-Share sectors in 2020


What a year 2020 was for investing. 

Record-breaking lows, recoveries, logic, panic and confusion all thrown together with fortunes made and lost. A pandemic, Brexit and a sometimes chaotic US Election made for a perfect storm in instability.

But now the dust is settling which sectors fared best and worst and more importantly why? 

Let's look at the UK in this article.

Data from IG from H1 2021 (Jan-July) shows the disparity between sectors in the FTSE All-Share:

Sector                             Average share price return

Healthcare                     +5.1%

Materials                             -1.8%

Information technology     -2.1%

Utilities                             -6.5%

Consumer staples             -8.2%

Financials                     -19.0%

Industrials                     -24.5%

Real estate                     -27.4%

Consumer discretionary     -30.3%

Communication services    -34.2%

Energy                             -45.7%

With the benefit of hindsight, the disparities at the extremes are logical, but were hard to predict in terms of timings given some dramatic trading days where it was all too easy to be too late to react to what was happening.

Healthcare plays a huge role in both managing and escaping from the pandemic and to such an extent that you might have expected to see even better returns, but there remain good growth and revenue prospects for many of the individual companies within the sectors.

And at the other extreme, energy usage (Utilities are not included in this sector) slumped with consumers staying at home and travelling less. 

The likes of banks in particular took at hit in the Financials sectors with the slowdown in the economy and increase risk of defaults. And while we are by no means out of the woods, the banks have steady potential growth prospects when taking a longer term view.

And Real estate fared even worse with empty offices and carnage on the high street as shops big and small went under and into administration, with the damage likely to remain hard to recover from in the short to medium term.

With markets frequently forward looking much of the potential recovery has already been baked into the market with steep rises when the vaccines were announced even if the economy still had to suffer ongoing shocks from additional waves of the virus.

For those looking to invest (do your own research as ever), our picks would remain Healthcare and Financials going forward into 2021 and beyond, but the markets are likely to remain bumpy for some time and investing will not be for the faint-hearted.

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