On a day like today when the market is a sea of red, I believe it shows why owning a few defensive shares can be a good thing for a portfolio.
Three defensive shares that I think are top options for investors are listed below. Here's why I rate them:
National Storage REIT (ASX: NSR)
National Storage is one of the ANZ region's largest providers of self-storage facilities with a network of 146 centres and a growing pipeline of development and acquisition opportunities. Its shares are trading flat today despite the market selloff, which I feel demonstrates why it is a quality option in volatile markets. Especially given its solid growth potential and generous dividend yield. The trust recently revealed that it plans to pay a full year distribution of 9.6 cents to 9.9 cents per unit. This equates to a yield of between 5.5% and 5.7%.
Rural Funds Group (ASX: RFF)
Another defensive option to consider is this real estate property trust, which is also trading flat today. Rural Funds owns a total of 49 rural properties across six agricultural sectors and has a long list of high quality tenants. As it has rental indexation built into its contracts, it provides the trust with great visibility on its future cash flows and positions it perfectly to grow its distribution at a solid rate over the long term. This year it expects to pay a total distribution of 10.85 cents per unit, which equates to a yield of 4.7%.
Telstra Corporation Ltd (ASX: TLS)
Whilst I'm not personally a buyer of its shares at this point, I could be swayed into buying them if market volatility intensifies. This is due to the telco giant's defensive qualities. After all, regardless of what's happening in the United States, Europe, or China, Australian consumers are unlikely to give up their mobile phones or broadband connections in a hurry. Furthermore, with its shares already pricing in low growth, I feel its undemanding valuation means the downside risk is reasonably limited.
