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3 defensive shares to buy for your retirement portfolio

When you first start out investing you might seek the high risk, high reward gains from fledgling growth shares. After all, if things go wrong you have plenty of time to recover your losses.

But as you enter retirement I think these types of investments should take a backseat.

Instead I would focus on investments that offer income and capital preservation. Three shares which I think are perfect for retirees right now are as follows:


Due to its near-monopoly status, I think this operator of the Australian stock exchange is a good defensive share to have in your portfolio. Its market-leading position has allowed it to successfully grow its bottom line and dividend by an average of 4% and 4.9% per annum, respectively, over the last five years. I don’t expect much to change over the next decade, putting ASX in a position to continue this trend for a long time to come. At present its shares provide a trailing fully franked 3.3% dividend.

Coles Group Ltd (ASX: COL)

This newly-listed supermarket giant has been operating for over a century and I don’t see it going away any time soon. In fact, I think Coles is likely to get stronger in the coming years thanks to its investments in automation. The company has just signed a deal for two new automated distribution centres which are expected to help the company slash operating costs and lift its margins. This could put Coles in a position to grow its dividend at a solid rate over the next decade. Incidentally, a note out Macquarie estimates that Coles will pay a 65.7 cents per share dividend this year. This equates to a forward fully franked 5.2% yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Another option for retirees to consider is this airport operator. I think Sydney Airport is well-positioned to continue growing its earnings and dividend at a decent rate over the coming years because of the inbound and outbound tourism boom that Australia continues to experience and Sydney Airport’s position as the main gateway into Australia. This could make it a good option for a retirement portfolio, especially with its trailing 5.7% dividend.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia owns shares of ASX Limited and COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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