Despite the falls we have seen today, the S&P/ASX 200 Index (ASX: XJO) has still had a remarkable month and is up 7.8% over the past 4 weeks.
This is in no small part due to the ongoing easing of restrictions related to the coronavirus pandemic. Australia's success so far in containing the disease is enabling the economy to slowly return to 'normal', which is obviously great news for ASX companies.
So with the coronavirus still looking to be the major market mover in 2020, it makes sense to position your portfolio accordingly. That's what the fund managers at Spheria Asset Management are looking at anyway. Spheria runs a micro-cap fund that returned more than 15% in April – so I reckon we should at least have a look at what they're doing.
Spheria's top 4 ASX picks
In its April update, Spheria named 4 ASX picks for a COVID-19 recovery.
First off, we have G8 Education Ltd (ASX: GEM). Spheria notes that childcare providers like G8 have benefitted enormously from the government offering free childcare over the last few months. Although this support is scheduled to end soon, it's still likely to have residual benefits for G8. The fundies also note that due to the successful capital raising G8 recently undertook, the company has fortified its balance sheet for the rest of the year.
Next, we have Ardent Leisure Group Ltd (ASX: ALG). Ardent runs a portfolio of theme parks including Dream World and WhiteWater World. Obviously, this company struggled immensely with the coronavirus outbreak with its parks forced to shut down. But Spheria thinks there is a lucrative potential recovery to be harnessed here, once restrictions are lifted and business can start to return to normal.
Village Roadshow Ltd (ASX: VRL) is next cab off the rank here. This company is another theme park operator, which owns Movie World, Sea World and Wet'n'Wild. Clearly, Spheria is making another bet on the easing restrictions, with Village Roadshow likely to benefit from the same potential tailwinds as Ardent Leisure. The fund notes that any increase in domestic tourism as a result of bans on international travel will likely benefit these 2 theme park operators as well.
Finally, we have Vista Group International Ltd (ASX: VGL). Vista provides exhibition software to cinemas – another industry that has been hit hard by the coronavirus restrictions. As people start returning to movie theatres around the country, Vista Group is an obvious beneficiary. Spheria is going for a value play on this one, noting it is priced well below its software-based peers when compared to its revenues (even if they don't return to pre-COVID levels).
Foolish takeaway
Although we should never take fund managers' picks as investment advice, it's always interesting and illuminative to check out what 'the professionals' are buying!
