The economic outlook remains fraught with danger as the Covid-19 crisis rolls on. Many UK shares endured a rough ride in 2020 as lockdowns and travel bans hammered corporate earnings. Vaccine rollouts provide light at the end of the tunnel, but 2021 could be another rough year.
Here are three UK shares I’d happily buy for my Stocks and Shares ISA today, however. I think they’ll thrive even with further coronavirus-related economic turbulence.
#1: Read all about it
I’m expecting Bloomsbury Publishing to have another very good year in 2021. It’s true that the sinking British economy could take a bite out of consumer spending in the near term. And there is subsequently a chance that book sales could take a hit. I don’t reckon this will happen though as long Covid-19 lockdowns keep rolling on.
Data from Nielsen shows that an astonishing 202m print books were sold during pandemic-struck 2020. This was the highest since 2012 and up 5.2% in volume terms from 2019 (and 5.5% in value terms). All this bodes well for 2021, in my eyes. Bloomsbury saw pre-tax profits soar 60% in the six months to August, latest financials showed. It’s a performance that pays tribute to this UK share’s packed portfolio of top titles, from the Harry Potter franchise to the fantasy titles of Sarah J. Maas. And even though it may face a more challenging environment post-lockdowns, I feel such titles should support its longer-term performance.
#2: A highly fashionable UK share
The prospect of sinking consumer confidence bodes badly for much of the retail sector. Indeed, the Confederation of British Industry’s retail gauge has just slipped to its lowest since May. The organisation warned too that “with the lockdown likely to remain in place in the near term, retailers expect this weakness to continue.”
This broader toughness wouldn’t discourage me from investing in JD Sports Fashion of the FTSE 100, though. Like Bloomsbury, sales here could suffer should broader consumer spending fall off a cliff. But this UK retail share is one of the continent’s leading sellers of ‘athleisure’. Sales of these versatile styles are surging as they combine comfort with the growing popularity of sportier lifestyles. And demand is particularly hot in the premium sportswear segment, a part of the market in which JD — thanks to its close relationships with brands like Nike, Adidas and Converse — is the go-to retailer.
#3: Another FTSE 100 firecracker
I believe that BAE Systems is another good buy for me during these tough economic times. Theoretically, defence contractors like this UK share shouldn’t be immune to downturns as government spending comes under pressure. I don’t think orders here will drop during the 2020s however. The incendiary geopolitical landscape mean that defence spending should continue to be a priority.
Defence spending in 2020 rose by almost 2% year-on-year, according to Jane’s. Total spend of $1.93trn last year marked the seventh straight year of growth, it said. And the intelligence group reckons that weapons budgets will continue rising in 2021, albeit at a slower pace than last year. That’s something I’d bear in mind before adding this share to my portfolio. But this is an overall landscape that FTSE 100-quoted BAE Systems is well placed to make the most of. This UK share is a major supplier to the US and UK militaries, as well as Saudi Arabia, Australia and India.
