Exchange traded funds that track traditionally defensive industries such as healthcare, consumer staples and utilities have held up better than riskier sectors this year with investors expressing a cautious view on the economy.
Every U.S. sector is down over the past month, but the smallest losses have been in consumer staples and healthcare, The Wall Street Journal reported Monday. Financial stocks have suffered the worst setback.
“That is a change from a year ago, when growth stocks trumped value stocks, riskier small caps outperformed more stable large caps, and cyclical large caps outperformed defensive ones,” according to the story.
Some analysts have been recommending that investors overweight defensive sectors such as healthcare. [Play Defense with Healthcare ETFs]
Conversely, riskier small-cap ETFs have fallen sharply in the recent correction. [Defensive Investing Sends Small-Cap ETFs Down]
Among sectors, healthcare, consumer staples and utilities ETFs often see inflows when investors are scaling back risk because there is always demand for the companies’ products. [Defensive ETF Plays]
Consumer staples ETFs have been particularly popular with investors lately. [Investors Play Defense with Consumer Staples ETFs]
Consumer Staples Select Sector SPDR Fund (NYSEArca: XLP)