Macquarie Group Ltd (ASX: MQG) shares have been hit hard by the 2020 bear market. Shares in the Aussie bank are down 27.33% compared to a 19.99% decline in the S&P/ASX 200 Index (ASX: XJO).
It's not just Macquarie shares that have been hammered as the big 4 bank share prices have also fallen lower. However, the fifth major bank is a different beast to the big 4 we've become accustomed to in Australia.
Smaller residential real estate exposure
One thing I think could make a difference for Macquarie shares is lower residential real estate exposure. The big 4 ASX banks have significant property exposure on their banks to 'Mum and Dad' homeowners across the country.
The big 4 ASX banks certainly dominate the residential property lending market. Historically, this has delivered strong earnings for shareholders as Aussie property has boomed. However, a property market downturn could hit Commonwealth Bank of Australia Ltd (ASX: CBA) shares a little harder than Macquarie's, all else equal.
Macquarie shares rely less on retail banking
There's no doubt Macquarie is a big bank. In fact, Macquarie's shares are worth a huge $35.50 billion right now. However, the group is very much an investment bank rather than a retail bank.
That means more people withdrawing cash from the banks isn't a big issue for Macquarie right now. Macquarie has large business banking segments and a number of investment arms compared to the big 4 banks.
This has also been a blessing in disguise throughout the 2018 Royal Commission. While Westpac Banking Corp (ASX: WBC) was given a hard time, Macquarie emerged relatively unscathed.
More diversified investments
Macquarie shares have benefitted from the group's diversified earnings streams. Macquarie has various units covering investment banking, asset management and many others. In fact, one of the world's major operators of private toll roads, Atlas Arteria Group (ASX: ALX), was formerly known as Macquarie Atlas Roads.
There's no doubt all investments have their pros and cons. That's as true for Macquarie's investments as it is for our ASX shares right now. However, I think this could give Macquarie the edge in their post-COVID recovery compared to the big 4 banks.
