Vaccine Discovery theme gaining momentum

Further upside for “Pandemic Victims” becoming “Vaccine Winners” is on the cards.
Chief Investment Office11 Nov 2020
Photo credit: AFP Photo

Pfizer announced 90% effective rate for a COVID-19 vaccine. A vaccine jointly developed by Pfizer (PFE US) and BioNTech (BNTX US) attained 90% effective rate in preventing COVID-19 based on Phase 3 trial results. Volunteers who received the experimental vaccine were said to achieve protection in 7 days after the second dosage, and 28 days after the first. This discovery signifies a critical milestone in the global race to find a vaccine as the pandemic rages on. Should Pfizer and BioNTech be granted regulatory approval, the companies are expected to produce up to 50m doses this year.

Vaccine Discovery Theme – Our standout call has paid off. On 24 August 2020, we published CIO Perspectives – Pandemic Fatigue: Time to position portfolios for vaccine discovery. We made an early call for investors to position their portfolios for potential vaccine discovery and the rationale were:

1.       Fatality rate for COVID-19 is on the decline, thus reducing the likelihood of economic lockdowns.

2.       Portfolio allocators suffering from “pandemic fatigue” and forecasts from Good Judgement suggest that a vaccine is on the way.

To participate in this “Vaccine Discovery” theme, we advised investors to gain exposure to the following industries/segments:

  • Restaurants, Hotels, Casinos, and Leisure: Industries that require face-to-face interactions were hard-hit during the pandemic as safe distancing rules kicked in.  But these segments are poised for strong rebound in the event of a vaccine discovery as global tourism would return to more normal levels. 

  • Athleisure: The sales outlook for sportwear companies is poised for recovery as economic lockdown eases and domestic consumption improves. Athleisure is a long-term secular theme riding on millennial consumption.

Our timing has proved prescient. Since 24 August, our “Pandemic Victims” index (consisting of MSCI World Hotel, Restaurants & Leisure, and S&P Global 1200 Casinos & Gaming) has outperformed global equities by 6.5 %pts while our “Athleisure” theme has also outperformed by 10.1 %pts.

“Pandemic Victims” Index – More upside ahead; now is the time to gain exposure. As vaccine news continue to gain momentum in coming months, we expect further upside for the “Pandemic Victims” index. For investors that have yet to gain exposure, the time to be engaged in this sector is now.

Figure 1: News of potential vaccine discovery driving risk assets higher

Source: Bloomberg, DBS


The information published by DBS Bank Ltd. (company registration no.: 196800306E) (“DBS”) is for information only. It is based on information or opinions obtained from sources believed to be reliable (but which have not been independently verified by DBS, its related companies and affiliates (“DBS Group”)) and to the maximum extent permitted by law, DBS Group does not make any representation or warranty (express or implied) as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions and estimates are subject to change without notice. The publication and distribution of the information does not constitute nor does it imply any form of endorsement by DBS Group of any person, entity, services or products described or appearing in the information. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment or securities. Foreign exchange transactions involve risks. You should note that fluctuations in foreign exchange rates may result in losses. You may wish to seek your own independent financial, tax, or legal advice or make such independent investigations as you consider necessary or appropriate.

The information published is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to subscribe to or to enter into any transaction; nor is it calculated to invite, nor does it permit the making of offers to the public to subscribe to or enter into any transaction in any jurisdiction or country in which such offer, recommendation, invitation or solicitation is not authorised or to any person to whom it is unlawful to make such offer, recommendation, invitation or solicitation or where such offer, recommendation, invitation or solicitation would be contrary to law or regulation or which would subject DBS Group to any registration requirement within such jurisdiction or country, and should not be viewed as such. Without prejudice to the generality of the foregoing, the information, services or products described or appearing in the information are not specifically intended for or specifically targeted at the public in any specific jurisdiction.

The information is the property of DBS and is protected by applicable intellectual property laws. No reproduction, transmission, sale, distribution, publication, broadcast, circulation, modification, dissemination, or commercial exploitation such information in any manner (including electronic, print or other media now known or hereafter developed) is permitted.

DBS Group and its respective directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned and may also perform or seek to perform broking, investment banking and other banking or financial services to any persons or entities mentioned.

To the maximum extent permitted by law, DBS Group accepts no liability for any losses or damages (including direct, special, indirect, consequential, incidental or loss of profits) of any kind arising from or in connection with any reliance and/or use of the information (including any error, omission or misstatement, negligent or otherwise) or further communication, even if DBS Group has been advised of the possibility thereof.

The information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. The information is distributed (a) in Singapore, by DBS Bank Ltd.; (b) in China, by DBS Bank (China) Ltd; (c) in Hong Kong, by DBS Bank (Hong Kong) Limited; (d) in Taiwan, by DBS Bank (Taiwan) Ltd; (e) in Indonesia, by PT DBS Indonesia; and (f) in India, by DBS Bank Ltd, Mumbai Branch.