The year 2020 saw the outbreak of the virus COVID-19, but as time went on, there were extended lockdown measures and second waves of the outbreak, all of which affected the financial markets. Traders’ strategies have had to adapt to the impact of the pandemic and the uncertainty of volatile markets, politics, and economies. But what sectors are they looking at with the prospect of a post-COVID-19 world?

The restrictions put in place have had a permanent effect on personal lives and businesses alike, with the introduction of a vaccine also adding to the prediction of an economic recovery. Investments in certain sectors are expected to accelerate in 2021, as a result of the effects of the virus, and here are some that traders are considering adding to their portfolio. 

E-commerce Stocks 

According to financial advisors, the pandemic has accelerated the trend in e-commerce investments, seemingly making years of progress in a matter of months. A consumer trend that saw a shift towards online shopping due to lockdowns and restrictions on a global scale, meant a huge spike in e-commerce sales. 

As a result, there has been a huge upward trend in e-commerce stocks, seen as a long-term investment, as the e-commerce businesses have managed to grow and develop as a result of this effect of the pandemic. 

Forex Market

As well as the aftermath of the pandemic, the recent news of a vaccine and the results of the U.S. election has seen a quickening rise of some currencies, at the time of writing. Online forex trading platforms have shown that compared to the USD, the Mexican Peso, Brazilian Real, Turkish Lira, South African Rand, Russian Ruble, and Polish Zloty all jumped between 5% and 10%, adding to 5%-12% leaps in China, Taiwan, and Korea’s currencies. Despite this rise in emerging market currencies, experts have advised that post-COVID-19, traders should also look to the reaction and response of the European Central Bank and Bank of Japan, for an idea of future investments, as the Euro and the Yen are also expected to rise higher. 

Going forward, some investors have a growing eagerness to buy into riskier currencies pairs, which gave a boost to emerging market currencies, whereas the uncertainty of a post-COVID-19 world has seen other traders hedge with likely safe-haven assets, such as tactical long USD opportunities, or consider forward contracts to counteract the risk of market volatility. 

ESG Investment 

2020 saw an influx of environmental, social, and governance (ESG) investing, which is set to continue in 2021. Traders are considering the ESG factors when it comes to assets, and there has been a rise in sustainable investment products. The concerns of climate change over recent years have played an important part in influencing this type of trade, but COVID-19 has highlighted further why ESG is important and increased its awareness. 

In particular, the restrictions in place and a move to working from home, has seen a rethinking of the way in which we travel and work. This is likely to spur an interest in cleaner forms of transport and the effects of pollution, post-crisis. 

The pandemic’s effect on the way in which business is conducted, and the disruption in markets and supply chains has resulted in a continued increased focus on progressive policies, sustainability awareness, and their environmental impacts, and as a result, a growing interest in green solutions. ‘Green bonds’ are predicted to be attractive to investors, which finance projects that aim to mitigate climate change. Also, read about Motivating Factors to Sustainable Investments

Technology Sector 

The share prices of technology companies have risen significantly as a result of the pandemic, as both personal and business relations have shifted to a digital space, and is an accelerated trend that is set to continue. The extensive use of technology and the Internet has vigorously spurred the need to become digitalized. 

With the majority of technology firms based in the US and the fact that a high proportion of the US index is made up of the technology sector, the S&P 500 saw a huge surge in investments, compared to FTSE 100, which fell abruptly. This has reinforced the strength of the technology sector during the pandemic, as well as the prediction of an upward outlook for this sector post coronavirus.