As the UK gears up for the rollout of Covid-19 vaccines in the near future, the outlook for the economy is improving. As such, I’m looking to buy a basket for FTSE 250 growth stocks for 2021. I reckon these shares could yield substantial returns in the years ahead as the economy recovers from the 2020 setback.
FTSE 250 growth stocks
I think companies that have performed well during the crisis could be some of the best investments to own coming out of it. There are quite a few businesses have reported strong revenue performances over the past few months. These include Games Workshop, Watches of Switzerland and AJ Bell.
All these groups have a strong competitive advantage and target key markets. Games Workshop, for example, has a relatively small customer base, but they’re willing to spend large sums with the business. The same goes for the UK’s biggest Rolex retailer, Watches of Switzerland. This has helped these firms keep their heads above water during the pandemic.
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AJ Bell’s advantage is its low-cost offering, which has helped attract investors to the platform. As the UK economy returns to growth, I think this FTSE 250 stockbroker may continue to attract new investor cash.
Other firms that have registered strong growth in the pandemic are Computacenter, Kainos and Softcat. Over the past few months, companies have been forced to invest in technology to keep their businesses operating. This has been a boon for specialist organisations. As the world becomes more reliant on technology, I think this trend will continue.
With that in mind, I reckon building a portfolio of tech stocks could be a sensible idea. These companies are already highly profitable and may become more so as the world becomes more tech-enabled.
Rebuilding
Governments around the world are already planning massive spending plans to help the world recover from the Covid-19 slump. These spending plans are already pushing the prices of essential commodities like copper, iron ore, gold and silver higher.
Therefore, I’m looking at buying operators that could benefit from this theme. Hochschild Mining and Kaz Minerals may benefit directly from rising commodity prices. Meanwhile, companies like Balfour Beatty and Morgan Sindall could benefit from increased construction spending.
As the construction and mining industries are so notoriously difficult to navigate, I plan to own a basket of these companies rather than pick individual stocks in their sectors. This should help me benefit from the overall trend while minimising risk if one group starts to struggle.
The bottom line
I think that by acquiring a basket of FTSE 250 stocks, like those listed above, investors should be able to ride the UK’s economic recovery in 2021. These companies all have bright prospects and have shown they can withstand the Covid-19 storm over the past few months. As such, I’m optimistic about their futures.
