Moderna Easily Outpaces Giant Rivals in Stock Market

As booster shots win approval, the smaller firm’s shares blast past J&J and Pfizer’s.

Sometimes it’s good to be the underdog. Just ask Moderna stockholders. With federal health regulators approving COVID-19 boosters for the biotech firm, its shares continue to outstrip other vaccine makers.

Moderna stock was up was up 1.6% in early trading Thursday, following a big rally this year—shares have ballooned some 2.5 times in 2021. The same can’t be said of Johnson & Johnson (off 0.5% this morning and flat for the year) or Pfizer (down 0.7% today, and ahead a nice but still trailing 19% year to date). Moderna and J&J got the booster OK from the Food and Drug Administration (FDA) Wednesday; Pfizer received its go-ahead for the extra dose last month.

The difference, analysts point out, is that smaller Moderna, whose revenues are around 10% of the other companies’, is a pure play: It has one lone product, the coronavirus vaccine. The other two are giants with an enormous range of products. And, of course, the large drugmakers can have troubles elsewhere in their empires. J&J, for instance, is dogged by lawsuits over the alleged ill-effects of its talc powder.

Institutional Investors Double Down on Private Assets

Schroders says the pandemic exacerbated the need to diversify away from equity/bond market volatility.

 


The vast majority of institutional investors are seeking to increase their allocation to private assets over the next year, mainly for diversification purposes, according to Schroders’ “Institutional Investor Study 2021.”

In the study, 90% of the 750 international institutional investors who responded said their allocations in one or more areas of private assets would rise throughout 2021. Private equity continues to attract the most capital as 37% of respondents say they plan to increase their allocation to those private assets over the next 12 months, followed by infrastructure equity (32%), impact investing and private debt (29% each), real estate equity (21%), and infrastructure debt (18%).

The least popular private asset classes were real estate debt (13%), forestry and agriculture (11%), and insurance-linked securities (10%). The respondents represent corporate and public pension plans, insurance companies, private banks, official institutions, and endowments and foundations that oversee nearly $27 trillion in assets.

“The results this year show that private assets continue to take a greater share of institutional portfolios,” Georg Wunderlin, Schroder’s global head of private assets, wrote in the report. “Even the global pandemic couldn’t derail the momentum.”

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The report found that 80% of investors agree or strongly agree that adding diversification was their main reason for acquiring private assets—ahead of even “generating high returns,” which was cited by 75% of institutional investors as their motivation for seeking private assets.

“This diversification has proven to be especially valuable over the last few years,” Sophie Van Oosterom, Schroders’ global head of real estate, said in the report. “Volatility has been high in equity markets and the world has dealt with major disruptions we hardly need to specify.”

Environmental, social, and governance (ESG) considerations took on greater importance during the pandemic, as 37% of respondents said COVID-19 made them put more importance on ESG factors when investing in private assets.

“The growing momentum behind sustainability in private assets will certainly be one to watch over the coming years,” Wunderlin said.

Private debt also demonstrated consistency during the pandemic, according to the report, which said the COVID-19 crisis was “the first true proof-of-concept for private debt” since it was created as an asset class in the wake of the global financial crisis.

“Increases to private debt allocations reflect investors’ belief in its ability to adapt in face of adversity by pivoting toward defensive sectors,” said the report, “for example health care and technology, and renegotiating borrower-friendly funding terms.”

The report cited fees as a main bulwark for investing in private assets and said the perception of liquidity has “fallen materially.” In 2020, 56% of participants cited liquidity as an issue, while in 2021, 42% said illiquidity was an impediment. The complexity of private assets has also diminished in investors’ views, as 35% singled out complexity as a concern, compared with 47% in last year’s study.

Related Stories:

Private Equity Powers Record-Breaking Pension Returns

CalPERS’ In-House Private Debt Program Is Dead

Venture Capital Spurs Endowments’ Record Returns

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