Stock Market 2021: Best and Worst Performing Sectors
It’s been another eventful year – and while it may not quite compare to the fave of 2020, it was still full of market-moving events, such as:
- The upcoming launch of COVID-19 vaccines
- Supply chain disruptions and a persistent shortage of semiconductors
- Record stimulus spending and debt accumulation by governments around the world
- The emergence of new worrying variables such as Delta and Omicron
- Major political unrest and riots in the Capitol
- Increasing evidence of (non-transient) inflation
Let’s take a look at the sectors that thrived through the twists and turns of 2021 — and that couldn’t stand the volatility.
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2021 winners and losers by sector
Our visualization today uses an enhanced screenshot of FinViz’s 3D map, which shows the final published numbers of the major US listed companies, sorted by sector and industry.
Here are the biggest beneficiaries from last year, along with those who have been left behind.
1. Big technology
Over recent years, it has come as no surprise to see big tech companies near the top of any list. In 2021, Alphabet continued its rupture, rising 65% to reach a 2 trillion dollars market cap.
Microsoft ended the year with 51%, while Apple was up 34%, and even Meta platforms (née Facebook) posted double-digit gains. Amazon was the only one with a single-digit gain, up 2.4% in 2021.
Who benefits most from the ongoing shortage of semiconductors? Those who design or manufacture it, of course.
For example, Nvidia has more than doubled its stock price over the year, with a growth of 125%. Other companies in semiconductor equipment and materials, such as ASML and Applied Materials, posted gains of more than 60%.
3. Oil and gas exploration and production
2020 was a springboard for oil prices, with futures contracts plummeting to negative at one point. However, the last year has been kinder to those in the energy industry.
The price of WTI started the year at less than $50 a barrel, but finished the year at $75 a barrel — a swing that makes a huge difference in the economies of every barrel.
4. Real Estate Investment Trusts (REITs)
It was one of the biggest years in decades for REITs, which saw the FTSE Nareit All Equity REITs perform its best since 1976.
Those who know REITs know that returns vary by real estate sector, and that is still the case here. Specifically, it was industrial REITs—particularly self-storage REITs—that outperformed. Additional Storage, a REIT that invests in self-storage units, ended up at 96% and is the best example of this.
5. Asset management
With record low interest rates and the ongoing turmoil from COVID-19, it is setting an ideal stage for opportunistic private equity firms.
The asset management industry in general did well in 2021, but it was specifically private equity firms like Blackstone and KKR that benefited, earning respectably 99% and 84%.
Banks, retail home improvement, building materials, healthcare plans, engineering and construction
1. Precious metal miners
Inflation took off in 2021, and the usual benefactor of this is the precious metals sector.
However, in the past twelve months, this has not been the case. Both gold and silver ended with negative returns throughout the year, hurting precious metal miners.
2. Chinese e-commerce
Beijing has been cracking down on China’s domestic tech sector lately, and this has had a huge impact on companies such as Pinduoduo, Alibaba, Baidu and JD.com, which have seen a mass crash in their share prices.
They were all under double digits, but Pinduoduo – the largest agriculture-focused tech platform in China – saw the most drawdown, down more than 67% over the year.
3. Solar energy companies
Solar installations in the US are operating at a record pace, as expected.
However, both regulatory uncertainty and supply chain problems have held stock prices in the short term. That’s why companies like Sunrun, the residential solar panel company, saw a 51% drop in stock performance in 2021.
4. Internet content and information
The big tech companies continued their rush, but other technology-enabled content and information companies had more difficult years. One example is Zillow, who slammed the doors in the process of flipping her home after incurring $500 million in losses.
Zillow’s stock is down 54% over the year, and has laid off a quarter of its employees.
5. Big Credit
It’s been an average year for big credit card companies like Visa and Mastercard, which have been stable in terms of stock market performance. Meanwhile, PayPal is down 19%.
According to billionaire investor Chamath Palihapitiya, 2022 may not be better. Days ago, he predicted that Visa and Mastercard would be the biggest business failures of the coming year.