What a ride the Aussie sharemarket has had in 2020! The ASX 200 started the year at 6,690.58 and by February it was hovering at around the 7,000 mark, hitting a high of 7197.20 on 20 February. A little over one month later the reality of the pandemic had really hit and on 23 March the ASX 200 plunged to 4,402.50. This turned out to be the bottom for 2020 (assuming, of course, there are no unpleasant surprises in the next 10 days).
Since then, the Aussie sharemarket has rallied – even through the recession – and with just a few days of 2020 left, the ASX200 is pretty close to where it started the year.
Looking back at 2020, Tom Young, Co-Portfolio Manager, Australian Equities (Income) at AMP Capital, noted that the sell-off in March was brutal, describing it as the global financial crisis condensed into one month. “Given what we know now, it’s fair to ask whether that volatility was justified,” he stated.
It has also been a tough year for dividends from Aussie shares. “We were very conscious at the start of the year that dividends in Australia were overly concentrated in the banking and iron ore sectors, where seven stocks generated half of the dividends in the ASX 200. The miners held up well on the back of strong ore prices, but the banks were hit hard by the crisis and put under guidance from APRA to restrict dividends,” explained Mr Young.
“Back in the early months of the pandemic, we estimated the eventual peak-to-trough decline in dividends would be about 40%, of which half would come from banks, and it looks as if we were fairly accurate.”
The top-performing shares
It hasn’t all been doom and gloom and there have been a few star performers on the Aussie securities exchange. Canstar crunched the numbers to come up with the top five shares on the ASX 200 based on the growth of the share price from 2 January (which was the first trading day of 2020) to 15 December. Keep in mind that past performance is not a reliable indicator of future performance, but the results are pretty impressive, as you can see from the table below.
The table also shows how much money you’d have if you had invested $1,000 in any of these shares. To put these numbers in context, Canstar’s calculations show that the total return for the S&P ASX 200 for the same period would have been 1.94% and $1,000 invested on 2 January would have been worth $1,019 on 15 December.
5 Top-performing Shares on the ASX 200
|ASX Code||Company Name||Share Price: 2 Jan 2020 (opening price)||Share Price: 15 Dec 2020 (adjusted closing price)||% Change||Value of $1k Invested at the Start of 2020 Based on Share Price^|
|NWL||Netwealth Group Ltd||$7.82||$15.93||104%||$2,037|
|FMG||Fortescue Metals Group Ltd||$10.66||$21.48||102%||$2,015|
|MIN||Mineral Resources Ltd||$16.50||$32.36||96%||$1,961|
Prepared by Canstar – 16/12/2020. Based on companies in the ASX 200 as of 15/12/2020. ^Calculation based on price return using the share price at two points in time, applied to the the value of $1,000; returns have not taken into any applicable dividend reinvestment, purchase costs such as brokerage or taxes. Consider costs when purchasing shares including bid/ask spreads and brokerage. Based on online share trading platforms on Canstar’s database the average brokerage fee for a single $1,000 trade is $16.70. Past performance is not a reliable indicator of future performance. The value of your investment will rise and fall over time.
In top spot is buy now, pay later provider Afterpay (ASX: APH). Its share price grew by 276% from $29.28 on 2 January to $110 on 15 December. That means if you had invested $1,000 at the start of the year, you would have had $3,757 on 15 December. Not a bad result.
Anyone who had waited a little longer to invest could have potentially done even better. Its share price bottomed to $8.01 on 23 March – its lowest price for the year. If you had bought $1,000 worth of shares then, the value of your investment would have grown by a whopping 1273% to $13,733 by 15 December.
An investment in Netwealth Group (NWL) or Fortescue Metals Group (FMG) could have seen someone double their money from 2 January to 15 December, with $1,000 growing to a little more than $2,000 in that time.
Mineral Resources (MIN) and Polynovo (PNV) are not far behind with their share price growing by 96% and 95% respectively over that same period.
Cover image source: MJTH (Shutterstock)
If you’re comparing Online Share Trading companies, the comparison table below displays some of the companies available on Canstar’s database with links to the company’s website. The information displayed is based on an average of 6 trades per month. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical). Use Canstar’s Online Share Trading comparison selector to view a wider range of Online Share Trading companies.
About Effie Zahos
Canstar’s Editor-at-Large, Effie Zahos, has more than two decades of experience helping Aussies make the most of their money. Prior to joining Canstar, Effie was the editor of Money Magazine, having helped establish it in 1999. She is an author and one of Australia’s leading personal finance commentators, appearing regularly on TV and radio.