Market Update

Applied philosophy - Vaccination rates and equity returns

Vaccination rates and equity returns

Vaccination programmes hold the promise of our lives returning to normal. Countries that have reached a high enough threshold in vaccinating their populations have been able to gradually open up. We were expecting equity markets to have had higher returns in these markets since vaccinations started in December 2020 but have found little relationship between vaccination rates and performance. In our view, short term returns are difficult to predict and we therefore prefer to focus on the long term using valuations as our anchor.

The economic recovery seems to be gathering pace as we shift from talk of whether governments and central banks provide enough stimulus to inflation, tapering and rate rises. This is happening with the backdrop of rising new cases and deaths globally, albeit with increasing regional differences. While some developed countries are gradually opening up, emerging markets (EM), especially India, are fighting another wave of the pandemic. We suspect this trend may continue due to the unequal distribution of vaccines, which has favoured economies that could afford to buy early and stock up enough doses to vaccinate a large proportion of their population.

We believe there is a connection between the speed of the economic recovery and the pace of reopening. How quickly a country emerges from lockdowns and how willing its citizens are to go out to shops and restaurants is partly determined by their vaccination rates, in our view. Vaccination programmes started around the middle of December in countries which were early adopters. Most of them were countries that had domestic R&D and manufacturing capacity for vaccines that were quickly authorised.

Download as PDF

Related articles

success failure

Keep up-to-date

Sign up to receive the latest insights from Invesco’s global team of experts and details about on demand and upcoming online events. 

Keep up-to-date

When you interact with us, we may collect information about you which constitutes personal data under applicable laws and regulations. Our privacy notice explains how we use and protect your personal data.

If your interests change, you can update your preferences at any time.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Like what you see?
Hear first about events and get insights from our global network of investment and policy experts
Sign Up

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • All data is as at 7 May 2021 unless otherwise stated.

    This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.