01 November 2024

Less risky approach to stocks and bonds - The best defensive ETFs can help ease investors' worries about volatility across the stock and bond markets.

Of course, there's no guarantee that all the forecasts of doom and gloom will prove warranted. 
As always, each individual should always do their own research and invest based on their personal investing goals and strategy.

Best Defensive ETFs to Protect Your Portfolio

But if you're leaning toward this less risky approach to stocks and bonds, these defensive ETFs could be worth considering.


The best defensive ETFs are ideal for investors seeking out safety amid an uncertain market backdrop.
Indeed, the Federal Reserve has started lowering interest rates from their highest level in decades. Inflation is nearing the central bank's 2% target, but rates still remain elevated, driving up costs for consumers and businesses. Plus, while plenty of indicators show most parts of the economy are healthy, continued weakness in the manufacturing sector has some worried about a possible recession on the horizon.
It's worth admitting that over the very long term, stocks always recover and move higher. So, one way to get through volatility on Wall Street is to simply refuse to look at stock quotes for a few weeks or months and hope things look better on the other side.
  • But long-term investors worried about the outlook on Wall Street can also find relief in defensive ETFs, which help provide some cover in an uncertain market environment.
To come up with this list of the best ETFs with defensive qualities to buy, we looked at products that all offer different strategies but share a prioritization of stability over aggressive profit-making strategies.
In a sunny economic environment where start-ups are booming and everyone is spending freely, these kinds of investments often lag behind. But when the storm clouds roll in and everyone runs for cover, it's these defensive ETFs that really hold their own.
As Kiplinger contributor Mark Hake writes in his feature on the best defensive stocks
"It's often the case that these companies are boring. But they are profitable and can keep growing even when economic conditions are rough. In any event, they have a long history of generating good profit margins and cash flow during a variety of economic cycles."

Of course, there's no guarantee that all the forecasts of doom and gloom will prove warranted. As always, each individual should always do their own research and invest based on their personal investing goals and strategy. 

But if you're leaning toward this less risky approach to stocks and bonds, these defensive ETFs could be worth considering.

 

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