The S&P/ASX 200 Index (ASX: XJO) seems to have had a rather dramatic mood swing. After some great gains early in the week, both Thursday and Friday have seen massive sell-offs, pushing the ASX 200 decisively back below 6,000 points.
With the global economy and the coronavirus pandemic still in very fluid situations, next week might well see the sell-off of ASX shares continue.
So with this in mind, here are 3 ASX shares that I think have defensive qualities and should be an asset to any portfolio if the sell-off continues next week.
Transurban Group (ASX: TCL)
Transurban is a gigantic owner and operator of tolled roads and motorways across Australia and North America. Transurban's monopolistic grip on the roadways of our major capital cities is inescapable – both as a motorist and as an investor. Yes, Transurban did see a massive collapse in road usage during the height of the lockdown period over March and April. But I think with restrictions easing, this company will continue to bounce back and remain a great investment for the long-term.
BHP Group Ltd (ASX: BHP)
Miners are not normally my 'go-to' for a defensive holding. But I think the unique circumstances 2020 has brought us has changed the game somewhat. Commodity prices have held up remarkably well over the coronavirus pandemic. Chief amongst those has been iron ore, which has topped US$100 per tonne in recent weeks. Thus, I think a diversified commodity play like BHP is a prudent investment going forward. It's one of the largest miners in the world, is diversified across coal, iron, copper and oil, and has some of the lowest extraction costs in the business. Therefore, I don't think you can go wrong with Broken Hill Proprietary if the markets sell-off once more.
Metcash Limited (ASX: MTS)
Metcash is often overlooked for its larger rivals Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW). But I think this perpetual underdog is a great defensive investment if there is another ASX sell-off. Not only does it own the IGA network of grocers, but it also has in its stable hardware chains Mitre 10 and Home Timber & Hardware.
Both grocers and hardware stores have seen increased consumer spending during the coronavirus lockdowns, and I see these trends continuing well into the future. As such, I think Metcash is another great defensive share to look at if the ASX does indeed continue to shed value next week.
