Log in Open account
Australia
Is your portfolio ready for the online future?

Is your portfolio ready for the online future?

Equities 4 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  COVID-19 will accelerate the online economy and digitalisation, reinforcing a trend that we've seen progress for more than a decade. Our view is that investors should have exposure to this trend and in this equity update we provide a large, inspirational list of companies that can offer just that. We've even broken down the list into different categories, so it's easier for investors to identify and gain exposure to specific industry groups.

Many commentators and influential people have spent months explaining to the public that things will never be the same after COVID-19. Sequoia Capital partner Michael Moritz said in the Financial Times recently that COVID-19 has fast forwarded the trend towards a large digital economy by maybe five years. Online businesses will thrive in the coming years compared to those that are more reliant on physical sales channels. Moritz also touches on the work-from-home switch and how this could have implications for commercial real estate in the future. If this holds, it will be a major blow to one of the best-performing asset classes in the past 50 years and something most investors would include in their portfolios in a low-interest-rate environment.

“Bosses will also be far more willing to embrace the idea that their teams don’t have to appear in an office just to demonstrate they are working. Millions have discovered the productivity boost gained from fewer social interruptions more than compensates for the loss of companionship. This doesn’t portend the end of offices, but it probably means a future in which managers are more willing to let their employees spend some time working from home. It’s easy to see how this could lead to a permanent crimp in the demand for commercial office space.” (Source: Financial Times)

Source: Bloomberg

Moritz is certainly correct about the online trend that has been under way for years. As the chart above shows, internet retailing has delivered 271% total return over five years compared to only 22.5% for global equities (MSCI World). Software and services companies have also enjoyed the tailwind delivering 135%. The media and entertainment industry group has only delivered 30%, but the historical comparison is difficult as the global equity indices saw a major classification change in late 2018, with internet companies such as Facebook and Alphabet being moved to this industry group. The media and entertainment industry group consists of: 1) media 2) entertainment and 3) interactive media & services (this is where Facebook, Alphabet and Tencent are placed), and it is especially in this third group where we’ll see future growth.

Everything related to the online economy seems to have better return on capital as the physical limits are less pronounced than for say airliners and miners. We believe the trend of digitalisation will continue over the coming decade and investors should have exposure to this trend in their portfolios. The table below provides a long list of companies offering exposure to many different sections of the online economy and increasing digitalisation. The combined market capitalisation represented on this list is $8.6trn across 69 single stocks, and we’ve also included four ETFs tracking some portion of this group for those that want a simpler way to invest in the overall trend.

See updated table in SaxoTraderGO
TickerCompanyCountryCategoryRev. growth 1yr %EV/EBITDAYTD %Mkt. Cap (USD, mn.)
BIDU:xnasBaidu IncChinaMedia & entertainment5.06.1-25.332,672
BILI:xnasBilibili IncChinaMedia & entertainment64.2NM35.08,684
IQ:xnasiQIYI IncChinaMedia & entertainment16.017.9-22.512,002
NTES:xnasNetEase IncChinaMedia & entertainment-0.516.16.542,015
00700:xhkgTencent Holdings LtdChinaMedia & entertainment20.723.06.5492,838
UBIP:xparUbisoft Entertainment SAFranceMedia & entertainment-12.613.010.68,997
VIV:xparVivendi SAFranceMedia & entertainment14.114.0-22.325,183
ATVI:xnasActivision Blizzard IncUnited StatesMedia & entertainment-13.521.79.651,253
GOOGL:xnasAlphabet IncUnited StatesMedia & entertainment17.416.1-1.2904,440
AAPL:xnasApple IncUnited StatesMedia & entertainment3.715.20.11,270,654
EA:xnasElectronic Arts IncUnited StatesMedia & entertainment1.820.28.733,848
FB:xnasFacebook IncUnited StatesMedia & entertainment24.415.8-1.5576,288
NFLX:xnasNetflix IncUnited StatesMedia & entertainment28.858.928.3182,637
PINS:xnysPinterest IncUnited StatesMedia & entertainment51.2NM6.011,491
TWTR:xnysTwitter IncUnited StatesMedia & entertainment10.021.8-13.121,844
B2W Cia DigitalBrazilE-commerce services4.362.516.56,985
QRTEA:xnasQurate Retail IncUnited StatesE-commerce services-4.312.3-7.53,250
MELI:xnasMercadoLibre IncArgentinaOnline shopping59.5NM5.930,227
ASC:xlonASOS PLCBritainOnline shopping17.217.5-30.92,890
BOO:xlonboohoo Group PLCBritainOnline shopping44.131.27.24,635
OCDO:xlonOcado Group PLCBritainOnline shopping9.9252.131.714,712
SHOP:xnysShopify IncCanadaOnline shopping47.0NM54.371,757
WUBA:xnys58.com IncChinaOnline shopping18.613.1-21.07,663
BABA:xnysAlibaba Group Holding LtdChinaOnline shopping41.626.8-8.3521,736
JD:xnasJD.com IncChinaOnline shopping24.922.617.560,772
03690:xhkgMeituan DianpingChinaOnline shopping49.570.9-1.275,668
PDD:xnasPinduoduo IncChinaOnline shopping129.7NM20.154,408
VIPS:xnysVipshop Holdings LtdChinaOnline shopping10.010.67.310,221
HFG:xetrHelloFresh SEGermanyOnline shopping41.4385.267.65,669
ZAL:xetrZalando SEGermanyOnline shopping20.330.6-4.712,140
4385:xtksMercari IncJapanOnline shopping44.5NM21.63,965
4755:xtksRakuten IncJapanOnline shopping14.7NM-2.212,276
3092:xtksZOZO IncJapanOnline shopping6.017.7-14.45,150
AMZN:xnasAmazon.com IncUnited StatesOnline shopping22.729.423.71,140,222
CVNA:xnysCarvana CoUnited StatesOnline shopping101.5NM-17.411,704
CHWY:xnysChewy IncUnited StatesOnline shopping37.2NM47.917,220
EBAY:xnaseBay IncUnited StatesOnline shopping-0.510.19.227,508
ETSY:xnasEtsy IncUnited StatesOnline shopping35.656.845.57,643
W:xnysWayfair IncUnited StatesOnline shopping34.6NM35.611,559
APT:xasxAfterpay LtdAustraliaPayments91.8NM23.36,180
GPN:xnysGlobal Payments IncUnited StatesPayments45.933.0-10.948,744
PYPL:xnasPayPal Holdings IncUnited StatesPayments15.037.211.5141,462
SQ:xnysSquare IncUnited StatesPayments42.9214.40.727,954
V:xnysVisa IncUnited StatesPayments10.221.5-6.4342,347
DHER:xetrDelivery Hero SEGermanyDelivery services100.1NM7.216,359
TKWY:xamsJust Eat Takeaway.com NVNetherlandsDelivery services82.8NM9.714,660
GRUB:xnysGrubhub IncUnited StatesDelivery services30.335.7-6.54,181
LYFT:xnasLyft IncUnited StatesDelivery services67.7NM-31.29,083
UBER:xnysUber Technologies IncUnited StatesDelivery services25.5NM-4.549,038
TCOM:xnasTrip.com Group LtdChinaOnline travel15.221.8-28.014,329
MMYT:xnasMakeMyTrip LtdIndiaOnline travel0.6NM-39.31,432
BKNG:xnasBooking Holdings IncUnited StatesOnline travel3.79.2-29.559,299
EXPE:xnasExpedia Group IncUnited StatesOnline travel7.56.4-37.59,420
TRIP:xnasTripAdvisor IncUnited StatesOnline travel-3.37.1-39.52,464
ABDE:xnasAdobe IncUnited StatesSoftware and services22.138.35.9168,201
AKAM:xnasAkamai Technologies IncUnited StatesSoftware and services7.214.313.015,800
CTXS:xnasCitrix Systems IncUnited StatesSoftware and services5.223.232.318,063
MSFT:xnasMicrosoft CorpUnited StatesSoftware and services13.519.713.71,356,222
ORCL:xnysOracle CorpUnited StatesSoftware and services1.011.0-1.4163,198
CRM:xnyssalesforce.com IncUnited StatesSoftware and services28.742.9-3.9145,143
NOW:xnysServiceNow IncUnited StatesSoftware and services32.4149.125.667,631
VMW:xnysVMware IncUnited StatesSoftware and services12.022.8-16.852,811
WDAY:xnasWorkday IncUnited StatesSoftware and services28.5NM-9.734,634
ZEN:xnysZendesk IncUnited StatesSoftware and services34.1NM-4.68,354
AVST:xlonAvast PLCBritainCyber security7.814.92.25,882
CYBR_NEW:xnasCyberArk Software LtdIsraelCyber security26.439.7-16.23,725
FTNT:xnasFortinet IncUnited StatesCyber security19.735.7-2.317,039
PANW:xnysPalo Alto Networks IncUnited StatesCyber security20.3164.8-17.019,127
SPLK:xnasSplunk IncUnited StatesCyber security30.8NM-9.921,430
IBUY:xnasAmplify Online Retail ETFUnited StatesExchange-traded FundNMNM1.5278
EMQQ:arcxEmerging Markets Internet andUnited StatesExchange-traded FundNMNM-3.1450
ONLN:arcxProshares Online Retail ETFUnited StatesExchange-traded FundNMNM12.987
Source: Bloomberg and Saxo Group

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
    Read full article
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

    Read full article
  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
    Read full article
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
    Read full article
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

    Read full article
  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
    Read full article
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
    Read full article
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
    Read full article
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
    Read full article
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
    Read full article
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia
Products & pricing
Asset Management
    Platforms
    Accounts & service
    General
    Other
    Legal

    Trading can result in losses. Please ensure you understand the risks.

    The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

    Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

    Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

    Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

    The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

    Please click here to view our full disclaimer.