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Written by: Susannah Streeter | Hargreaves Lansdow
- On 23 March 2020, Boris Johnson announced a nationwide lockdown to curb the widening outbreak of COVID-19.
- The world changed dramatically, and the pandemic affected the markets and the money in our pockets.
- 5 years on, how the FTSE 350, the S&P 500, our financial resilience, savings, gilts and annuities have changed.
How the markets have changed
The FTSE All Share has regained a vibrancy that was lacking prior to the pandemic, when a pallid tone blighted the index due to worries about Brexit. It’s risen 63.63% since the darkest day of the pandemic on the financial markets, when the index dropped to 2837 – its lowest point since June 2012. The FTSE 100 has raced to fresh record highs this year, with listed defence stocks helping the blue-chip index break new ground at the start of March.
Although it’s been recently hit with volatility, and a dramatic slide induced by Trump’s trade policies, the S&P 500 has nevertheless still largely held on its spectacular rebound since the pandemic sell off and is up by more than 140% since 20 March 2020. A resilient US economy, the power of the tech giants and euphoria for AI investments have propelled stocks on Wall Street to record levels. Nvidia has been the standout performer on the S&P 500 as its position at the heart of the AI revolution has become so evident.
The rebound of markets is a reminder why that the phrase, ‘time in the market, rather than timing the market’ is so pertinent when it comes to investing, which should always be seen as a long-term endeavour.
On the FTSE 350, the best performers since the pandemic include Mr Kipling owner Premier Foods and Rolls Royce. Cupboard staples are a lot easier to shift at a time when consumers are tightening their belts and turning away from big ticket items, so sales of Premier Foods’ larder of products have been remarkably resilient. The company has been helped by acquisitions, including the Spice Tailor and Fuel 10K products, tapping into changing tastes.
Rolls Royce has revved up its engines, despite seeing its share price battered as the pandemic took hold. It clinched the top spot as the biggest gainer in the FTSE 100 in 2024, and shares have continued to purr upwards, partly thanks to a pledge by EU governments to increase defence spending. A restructuring programme has prompted improvements in productivity, while disposals have lowered its debt. Pent up demand for travel has been a positive tailwind for Rolls Royce. A multi-billion-pound order book gives the group visibility over future revenue and full year guidance has been upgraded.
ASOS is near the bottom of the pack, when it comes to performance since the pandemic. Although it seemed to have the recipe for success during lockdowns and the switch to online shopping, its valuations have dropped significantly as overseas rivals Shein and Temu have entered the market. On the S&P 500 Walgreens Boots Alliance and Estee Lauder have been among the worst performers, as competition from online beauty and pharma brands has proved increasingly tough.
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