Morningstar has identified five equity funds that are considered defensive options for investors looking to protect their portfolios during times of market volatility. These funds are designed to provide stability and downside protection, making them attractive choices for those seeking a more conservative approach to investing in equities.
One such fund is the Vanguard Dividend Appreciation Index Fund, which focuses on companies with a history of increasing their dividends over time. This can provide a steady source of income for investors, even when the market is experiencing turbulence.
Another defensive option is the Fidelity Low-Priced Stock Fund, which invests in undervalued stocks with the potential for long-term growth. By focusing on companies with strong fundamentals and attractive valuations, this fund aims to weather market downturns more effectively than its peers.
The T. Rowe Price Dividend Growth Fund is also considered a defensive choice, as it seeks out companies with a track record of consistent dividend growth. This can provide a source of income for investors during challenging market conditions, while also offering the potential for capital appreciation over time.
The American Funds Washington Mutual Investors Fund is another defensive option for investors, as it focuses on large-cap value stocks with strong fundamentals. By investing in established companies with stable earnings and dividends, this fund aims to provide stability and downside protection for investors.
Lastly, the Dodge & Cox Stock Fund is a defensive choice that focuses on undervalued stocks of companies with strong balance sheets and competitive advantages. By investing in companies with solid fundamentals and attractive valuations, this fund aims to provide downside protection while also offering the potential for long-term growth.
Overall, these five equity funds identified by Morningstar offer defensive characteristics that can help investors protect their portfolios during times of market volatility. By focusing on companies with strong fundamentals, consistent dividends, and attractive valuations, these funds aim to provide stability and downside protection for investors seeking a more conservative approach to investing in equities.