The 2021 financial year proved to be a great one for Aussie shares with the ASX 200 returning 28% over the year to June 30, 2021. It was definitely an impressive turnaround from the previous financial year when the ASX 200 lost 7.7%.
The strong return was helped by a sharper rebound in the Australian economy, a surge in profits and numerous companies reinstating or increasing their dividends said AMP Capital’s Head of Investment Strategy at Chief Economist, Dr Shane Oliver.
The best sector in the past financial year was consumer discretionary with a 46.1% return, according to Betashares Chief Economist, David Bassanese. “That’s little wonder considering the strong stimulus-fuelled rebound in consumer spending during the COVID crisis. Financials were second with a 40.6% return, as the banking sector’s bad debt situation was not as bad as first feared,” he explained.
But which shares performed the best and worst over the past financial year? Canstar crunched the numbers to come up with the top 10 shares on the ASX 200 based on the growth of the share price from 1 July, 2020 to 30 June, 2021. Of course, it’s important to remember that past performance is not a reliable indicator of future performance. The tables also show how much money you’d have if you had invested $1,000 in any of these shares.
The 10 best-performing shares of the financial year
There were certainly some stellar performers over the past financial year. Chalice Mining (ASX: CHN) returned an impressive 634.7% over the 12-month period, meaning that someone who had invested $1,000 on 1 July last year could have had $7,347 at the end of June this year! Certainly nothing to sneeze at! In fact, investing in any of these top 10 shares would have seen investors more than double their money over the selected period.
Top 10 best-performing shares on the ASX 200 over the 2020-21 financial year
| Code | Name | Share Price | Value of $1,000 Invested at Start of FY | ||
|---|---|---|---|---|---|
| Open 1 July 2020 |
Close 30 June 2021 |
Percent Change | |||
| CHN | Chalice Mining Ltd | $1.01 | $7.42 | 634.7% | $7,347 |
| PLS | Pilbara Minerals Ltd | $0.23 | $1.45 | 530.4% | $6,304 |
| GXY | Galaxy Resources Ltd | $0.77 | $3.67 | 376.6% | $4,766 |
| PNI | Pinnacle Investment Management Group Ltd | $3.81 | $11.97 | 214.2% | $3,142 |
| LYC | Lynas Rare EARTHS Ltd | $1.90 | $5.71 | 200.5% | $3,005 |
| ORE | Orocobre Ltd | $2.31 | $6.47 | 180.1% | $2,801 |
| REH | Reece Ltd | $9.19 | $23.61 | 156.9% | $2,569 |
| MIN | Mineral Resources Ltd | $21.28 | $53.73 | 152.5% | $2,525 |
| CDA | Codan Ltd | $7.15 | $18.03 | 152.2% | $2,522 |
| PBH | Pointsbet Holdings Ltd | $5.07 | $12.78 | 152.1% | $2,521 |
Source: www.canstar.com.au. Prepared on 6/07/2021. Table sorted in descending order by percent change in share price.
The 10 worst-performing shares of the financial year
It wasn’t all good news, though, as some companies did experience significant drops in their share price over the financial year. The worst performer was The a2 Milk Company (ASX: A2M) whose share price fell by 68%. This means someone who had invested $1,000 on 1 July last year would only have had $319 at the end of June this year.
Top 10 worst-performing shares on the ASX 200 over the 2020-21 financial year
| Code | Name | Share Price | Value of $1,000 Invested at Start of FY | ||
|---|---|---|---|---|---|
| Open 1 July 2020 |
Close 30 June 2021 |
Percent Change | |||
| A2M | The a2 Milk Company Ltd | $18.83 | $6.00 | -68.1% | $319 |
| APX | Appen Ltd | $34.46 | $13.60 | -60.5% | $395 |
| RRL | Regis Resources Ltd | $5.12 | $2.36 | -53.9% | $461 |
| AGL | AGL Energy Ltd | $16.92 | $8.20 | -51.5% | $485 |
| AMP | AMP Ltd | $1.92 | $1.13 | -41.4% | $586 |
| TPG | TPG Telecom Ltd | $9.70 | $6.26 | -35.5% | $645 |
| NST | Northern Star Resources Ltd | $13.61 | $9.78 | -28.1% | $719 |
| AZJ | Aurizon Holdings Ltd | $4.86 | $3.72 | -23.5% | $765 |
| ORG | Origin Energy Ltd | $5.84 | $4.51 | -22.8% | $772 |
| EVN | Evolution Mining Ltd | $5.81 | $4.50 | -22.5% | $775 |
Source: www.canstar.com.au. Prepared on 6/07/2021. Table sorted in ascending order by percent change in share price.
Lessons for investors from the last financial year
There’s a lot we can learn from the last financial year. Dr Oliver shared the following:
- Share markets look ahead – and they climbed a wall of worry over the last year, but this is what they always do.
- Timing markets is hard – staying fully invested as markets rebounded despite the recession and ongoing coronavirus scares would have been very hard at times.
- Don’t fight the Fed or the RBA – despite zero interest rates they still impact investment markets in a big way.
- Investment valuations need to be assessed relative to interest rates – low rates mean higher PEs.
- Turn down the noise – the noise around investing is now at fever pitch making it very hard to stay focused on long-term investing, so the best thing is to turn it down.
The outlook
So what does the year ahead look like? Probably not as good as the past financial year. “Share markets have had strong gains from last year’s lows (US shares are up 94%, global shares are up 83% and Australian shares are up 60%) and are no longer unambiguously cheap so the easy gains are likely behind us,” said Dr Oliver, adding that shares are expected to see “okay returns”.
“While there is a risk of a short-term correction in shares and returns are likely to slow from the pace of the last year, overall returns from well-diversified portfolios are still likely to be reasonable over the next 12 months,” Dr Oliver said.
Cover image source: Pixel-Shot/Shutterstock.com
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