In this article, we discuss 5 best defensive ETFs to buy amid recession fears. If you want to see more ETFs as defensive plays amid recession, click 10 Best Defensive ETFs to Buy Amid Recession Fears.
5. VegTech Plant-based Innovation & Climate ETF (NYSE:EATV)
VegTech Plant-based Innovation & Climate ETF (NYSE:EATV) is an actively managed exchange traded fund that offers exposure to the emerging global plant-based foods and materials theme through innovative VegTech companies. The fund was established at the end of December 2021, and has net assets of $4.5 million and an expense ratio of 0.75%. The portfolio consists of 43 securities.
The biggest holding of VegTech Plant-based Innovation & Climate ETF (NYSE:EATV) is Ingredion Incorporated (NYSE:INGR), an Illinois-based company that offers sweetener products, food-grade and industrial starches, biomaterials, and nutrition ingredients. The ETF owns a $430,000 stake in Ingredion Incorporated (NYSE:INGR), representing 9.53% of the total securities.
On May 23, Ingredion Incorporated (NYSE:INGR) declared a $0.65 per share quarterly dividend, in line with previous. The dividend is distributable on July 26, to shareholders of record on July 1. As of June 9, the company delivers a dividend yield of 2.85%. The company posted on May 5 its Q1 results, reporting earnings per share of $1.95 and a revenue of $1.89 billion, above Street consensus estimates by $0.14 and $125 million, respectively.
According to Insider Monkey’s Q1 data, Ingredion Incorporated (NYSE:INGR) was part of 26 public hedge fund portfolios, with collective stakes amounting to $386.4 million. Donald Yacktman’s Yacktman Asset Management is the leading stakeholder of the company, with 2.3 million shares worth $207.85 million.
4. Utilities Select Sector SPDR Fund (NYSE:XLU)
Utilities Select Sector SPDR Fund (NYSE:XLU) aims to provide investment results that track the price and yield performance of the Utilities Select Sector Index. As of June 8, the fund offers an expense ratio of 0.10% and assets under management of $16.4 billion, as well as a distribution yield of 2.73%. The ETF provides exposure to companies from the electric utility, water utility, multi-utility, independent power and renewable electricity, and gas utility sectors. The portfolio is fairly concentrated, with only 29 holdings.
NextEra Energy, Inc. (NYSE:NEE), a provider of electric power to retail and wholesale customers in North America, occupies the top position in Utilities Select Sector SPDR Fund (NYSE:XLU)’s portfolio, representing 14.89% of the total holdings. It is also the biggest equity in the underlying index.
On April 25, Credit Suisse analyst Nicholas Campanella initiated coverage of NextEra Energy, Inc. (NYSE:NEE) with an Outperform rating and an $87 price target. According to the analyst, NextEra Energy, Inc. (NYSE:NEE) is a robust U.S. utility and renewable developer based in Florida and is a “battleground stock in the wider renewable supply chain debate”. Despite short-term supply constraints, NextEra Energy, Inc. (NYSE:NEE) remains positioned to perform well amid an inflationary macro backdrop versus peers owing to its size and scale, noted the analyst, who sees the stock as fundamentally attractive.
In Q1 2022, 64 funds were bullish on NextEra Energy, Inc. (NYSE:NEE), up from 55 funds in the prior quarter. According to Insider Monkey’s data, Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 15.6 million shares worth $1.3 billion.
3. iShares Global Consumer Staples ETF (NYSE:KXI)
iShares Global Consumer Staples ETF (NYSE:KXI) seeks to track the investment results of an index comprising global securities in the consumer staples sector. The fund’s net assets as of June 8 exceed $1 billion, and it offers a 30-day SEC yield of 1.98%, with a semi-annual distribution frequency. iShares Global Consumer Staples ETF (NYSE:KXI) charges a management fee of 0.43% and has a portfolio consisting of 92 stocks.
The biggest holding of iShares Global Consumer Staples ETF (NYSE:KXI) is The Procter & Gamble Company (NYSE:PG), an American multinational branded consumer packaged goods giant. 2022 marks the 66th year that The Procter & Gamble Company (NYSE:PG) has raised its dividend consecutively and the 132nd consistent year that the company has declared a dividend since its incorporation in 1890. It is a reliable dividend king and one of the most prominent defensive plays amid recession fears. The company on April 12 declared a $0.9133 per share quarterly dividend, a 5% increase from its prior dividend of $0.8698. The dividend was distributed to shareholders on May 16.
According to Insider Monkey’s database, The Procter & Gamble Company (NYSE:PG) was found in 72 hedge fund portfolios at the end of Q1 2022, compared to 67 a quarter earlier. Rajiv Jain’s GQG Partners was the leading shareholder of the company Q1, with stakes worth over $1.5 billion.
2. First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG)
First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG) seeks to track the investment results of the Nasdaq US Smart Food & Beverage Index, which consists of the 30 most liquid food and beverage companies from the NASDAQ US Benchmark Index. The securities in the fund’s portfolio are weighted based on volatility, value, and growth prospects. Total net assets of First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG) amount to approximately $843 million and the expense ratio came in at 0.60%.
First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG) owns 855,804 shares of Archer-Daniels-Midland Company (NYSE:ADM), worth $75.8 million, representing about 9% of the total holdings. Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational food processing and agricultural commodities corporation.
On April 27, Baird analyst Ben Kallo raised the price target on Archer-Daniels-Midland Company (NYSE:ADM) to $108 from $73 and maintained an Outperform rating on the shares. The analyst observed that Q1 results were very good and the solid performance will contribute towards achieving its 2025 target of $6.00-$7.00 earnings per share. He said that Archer-Daniels-Midland Company (NYSE:ADM) is a beneficiary of the dislocation across the agriculture supply chain.
According to Insider Monkey’s Q1 data, 42 hedge funds were long Archer-Daniels-Midland Company (NYSE:ADM), compared to 41 funds in the last quarter. Ric Dillon’s Diamond Hill Capital is the leading shareholder of the company, with 4.75 million shares worth $429.15 million.
1. iShares US Consumer Staples ETF (NYSE:IYK)
iShares US Consumer Staples ETF (NYSE:IYK) tracks the investment results of the Russell 1000 Consumer Staples RIC 22.5/45 Capped Index, exposing investors to a broad range of consumer goods, including food, automobiles, and household products. The net assets of iShares US Consumer Staples ETF (NYSE:IYK) as of June 8 were $1.35 billion, with a 30-day SEC yield of 2.11% and an expense ratio of 0.41%. The portfolio consists of 54 domestic securities.
One of the top holdings of iShares US Consumer Staples ETF (NYSE:IYK) is The Coca-Cola Company (NYSE:KO), the American multinational beverage giant. The Coca-Cola Company (NYSE:KO) is one of the most reliable dividend kings, with 2022 marking the 57th consecutive annual dividend increase by the company. On April 27, the company declared a quarterly dividend of $0.44 per share, in line with previous. The dividend is payable on July 1, to shareholders of record as of June 15.
Warren Buffett’s Berkshire Hathaway is the biggest position holder in The Coca-Cola Company (NYSE:KO), with 400 million shares worth $24.7 billion. Overall, 64 hedge funds were bullish on the stock at the end of March 2022.
You can also take a look at 10 Best Value ETFs to Invest in Now and 10 Dividend Stocks Better Than Cryptocurrencies.
