Nervous investors are tilting toward defensive sectors for their exposure to stock exchange traded funds.
For example, the Russell 3000 Defensive Index is up 2.4% year to date, compared with a 0.7% gain for the regular Russell 3000 Index, a benchmark for the total U.S. stock market.
“The Russell 3000 Defensive Index measures the performance of the broad defensive segment of the U.S. equity universe,” according to a fact sheet on the index. [Investors Shift Into Defensive ETFs]
“It includes those Russell 3000 Index companies with relatively stable business conditions which are less sensitive to economic cycles, credit cycles, and market volatility based on their stability variables. Stability is measured in terms of volatility (price and earnings), leverage, and return on assets.”
Some investors have been favoring defensive sector ETFs for consumer staples, healthcare and utilities. [Lower-Risk Stock ETFs to Consider]
Dividend ETFs have been another popular theme in this year’s volatile and uncertain markets. [Hunting for Yield with ETFs]
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.