In this article, we discuss 5 defensive ETFs to buy before recession. If you want to read about some more defensive ETFs, go directly to 10 Defensive ETFs to Buy Before Recession.
5. Vanguard Value Index Fund (NYSE:VTV)
Vanguard Value Index Fund (NYSE:VTV) is a fund that tracks the performance of the CRSP US Large Cap Value Index. The index comprises value stocks of large companies that trade on exchanges in the United States. It has over $145 billion in net assets with a yield of 2.32%.
One of the biggest holdings of Vanguard Value Index Fund (NYSE:VTV) is Berkshire Hathaway Inc. (NYSE:BRK-B), a conglomerate with interests in the insurance, freight rail transportation, and utility businesses. At the end of the fourth quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $19.3 billion in Berkshire Hathaway Inc. (NYSE:BRK-B), compared to 106 in the preceding quarter worth $19.4 billion.
In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. (NYSE:BRK-B) was one of them. Here is what the fund said:
“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway Inc. (NYSE:BRK-B). Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway Inc. (NYSE:BRK-B) has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”
4. iShares MSCI USA Quality Factor ETF (BATS:QUAL)
iShares MSCI USA Quality Factor ETF (BATS:QUAL) is an exchange traded fund that tracks the investment returns of the MSCI USA Index. The fund invests at least 90% of assets in component securities of the underlying index.
A premier holding of iShares MSCI USA Quality Factor ETF (BATS:QUAL) is Costco Wholesale Corporation (NASDAQ:COST), a firm that owns and runs membership warehouses. At the end of the fourth quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $5.4 billion in Costco Wholesale Corporation (NASDAQ:COST), up from 55 in the preceding quarter worth $4.3 billion.
3. SPDR S&P MIDCAP 400 ETF Trust (NYSE:MDY)
SPDR S&P MIDCAP 400 ETF Trust (NYSE:MDY) is an exchange traded fund that invests at least 80% of net assets in securities that correspond generally to the price and yield performance of the S&P MidCap 400 Index.
A key holding of the SPDR S&P MIDCAP 400 ETF Trust (NYSE:MDY) is SolarEdge Technologies, Inc. (NASDAQ:SEDG), a firm that markets semiconductor equipment to the solar industry. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Impax Asset Management is a leading shareholder in SolarEdge Technologies, Inc. (NASDAQ:SEDG), with 754,007 shares worth more than $210 million.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and SolarEdge Technologies, Inc. (NASDAQ:SEDG) was one of them. Here is what the fund said:
“Our sustainability orientation has led us to favor renewable energy providers such as SolarEdge Technologies, Inc. (NASDAQ:SEDG) over traditional fossil fuel energy companies. Renewables stocks moved up very strongly over the last several quarters on optimism about huge green stimulus plans in Europe and the U.S. so we took profits and sold SolarEdge Technologies, Inc. (NASDAQ:SEDG) as valuations became demanding.”
2. Vanguard Consumer Staples Fund (NYSE:VDC)
Vanguard Consumer Staples Fund (NYSE:VDC) is an exchange traded fund that invests in securities on the MSCI US Investable Market Index/Consumer Staples 25/50. The index comprises large, mid-cap, and small-cap companies that operate in the consumer staples sector in the United States.
Vanguard Consumer Staples Fund (NYSE:VDC) holds a large stake in The Procter & Gamble Company (NYSE:PG), a company that markets consumer packaged goods. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE:PG), with 6 million shares worth more than $985 million.
1. Invesco S&P 500 Pure Value ETF (NYSE:RPV)
Invesco S&P 500 Pure Value ETF (NYSE:RPV) is an exchange traded fund that tracks the performance of the S&P 500 Index and invests at least 90% of net assets in securities that exhibit strong value characteristics in the underlying index.
Invesco S&P 500 Pure Value ETF (NYSE:RPV) holds a large stake in MetLife, Inc. (NYSE:MET), a financial services firm with core interests in insurance. At the end of the fourth quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes worth $1 billion in MetLife, Inc. (NYSE:MET), compared to 39 in the previous quarter worth $1.1 billion.
You can also take a peek at 13 Best Hemp Stocks to Buy Now and Billionaire Dan Loeb’s Top 10 Stock Picks.
