The surge in artificial intelligence companies has led to a global rally in equity markets over the past year. However, concerns remain about the high concentration of record highs in just a few stocks, emphasizing the importance of a diversified portfolio for resilience in various market conditions.
Consumer defensive stocks, which include companies producing essential items like food, beverages, household products, and education services, are highlighted in this article for their stability. While not as flashy as high-growth tech companies, consumer defensive stocks offer steady cash flows that can cushion investors during economic slowdowns.
Five funds with a significant allocation to consumer defensive stocks are featured in this article:
1. Barings Global Agriculture – with a consumer defensive exposure of 41.55%
2. Trojan Global Income – with a consumer defensive exposure of 35.91%
3. WS Lindsell Train UK Equity – with a consumer defensive exposure of 35.14%
4. Fundsmith Equity – with a consumer defensive exposure of 31.16%
5. IFSL Evenlode Income – with a consumer defensive exposure of 26.87%
Each of these funds offers the potential for growth and income, with a focus on consumer defensive stocks that may prove resilient in challenging market conditions. While these stocks may not deliver excessive returns during periods of high optimism, they can provide stability and protection for investors in times of market uncertainty.
It’s essential to consider the defensive qualities of sectors like healthcare and utilities as well, as they typically have lower volatility compared to other industries. By diversifying your portfolio with consumer defensive funds, you can better position yourself to weather market fluctuations and capitalize on opportunities for long-term growth.