Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Defensive Sector ETF Picks For Wary Investors
News
Share

Defensive Sector ETF Picks For Wary Investors

Max ChenOct 24, 2019
2019-10-24

While U.S. markets are hovering near record highs, high net-worth investors are wary of what the future may hold and are getting more defensive. ETF investors can also shift their portfolios into a more defensive posture through sector-specific strategies.

According to a survey conducted by E-Trade Financial, the percentage of affluent investors who anticipate a stock market pullback in the fourth quarter has doubled, CNBC reports.

Around 40% of wealthy investors surveyed by E-Trade are betting on a market drop in the final three months of the year, or double from the 19% of investors in the previous Q3 survey.

“The [third quarter]was a volatile quarter, and what’s remarkable about early Q4 is we’re knocking on the door of equity market records,” Mike Loewengart, vice president of investment strategy at E-Trade, told CNBC. “When I think about where we are in the cycle, coupled with what transpired in Q3, it’s not surprising to see investors turning more bearish.”

About 28% of the wealthier investors who have turned bearish are expecting a modest drop of no more than 5%.

“But to me it is notable,” Loewengart said since that percentage jumped from 12% last quarter.

Additionally, the percentage of millionaire investors who believe the market will end the year with a quarterly gain dipped from 56% to 42%.

“Everyone has turned more bearish overall,” Loewengart added.

A More Defensive Stance

In light of the more bearish outlook, these investors are exhibiting a more defensive stance. Specifically, they showed a greater preference for utilities and consumer staples sectors, with a 10% increase in millionaire investors arguing that utilities provide the most potential in Q4, and an 11% increase in investors pointing to staples as the best play.

ETF investors can also gain broad exposure to these market segments through sector-specific strategies. For example, the Utilities Select Sector SPDR (XLU A), Vanguard Utilities ETF (VPU A+), Fidelity MSCI Utilities Index ETF (FUTY ) and iShares U.S. Utilities ETF (IDU B+) are among the most popular utilities sector ETF available.

Also, for those who are looking to get involved with the consumer staples segment, the Vanguard Consumer Staples ETF (VDC A+), Consumer Staples Select Sector SPDR ETF (XLP A) and Fidelity MSCI Consumer Staples ETF (FSTA ) are some options to gain broad exposure this defensive sector.

“They are not pulling out of the market but repositioning into the historically strong defensive sectors,” Loewengart said. “That is in response to the heightened market volatility and concerns we are near the end of the economic cycle, and a recession is inevitable.”

This article originally appeared on ETFTrends.com


Content continues below advertisement

» Popular Pages

  • Tickers
  • Articles

May 26

Invest in Research as COVID-19 Heart Impacts Increase

May 26

This ETF Gives Exposure to the Next Gen Nasdaq Leaders

May 26

Innovator Offers Upside With a Floor on Downside Risk

May 26

A Guide to the Advantages, Tradeoffs, and Risks of TIPS

May 26

Pacer’s Cash Cows Milk $6 Billion From Its Investors

May 26

SATO and BLKC Impacted as Bitcoin Miners Rebound

May 26

There's More to Crypto than Just Currency

May 26

Sentiment for Bonds Could Improve: An ETF to Consider

May 26

BondBloxx Launches 3 High Yield Corporate Bond ETFs

May 26

ARK’s Cathie Wood: Now’s Not the Time to Bet Against Disruptive Innovation

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

ARKK

ARK Innovation ETF

VTI

Vanguard Total Stock Market...

XLE

Energy Select Sector SPDR...

WEAT

Teucrium Wheat Fund

DBA

Invesco DB Agriculture Fund

TQQQ

ProShares UltraPro QQQ


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X