3 defensive ASX ETFs to buy if a recession comes

These could be top options for investors concerned about a recession.

| More on:
Man holding sign saying economic slowdown, ASX shares, afterpay shares

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With economists predicting that a recession is coming, many investors may be looking for some defensive options to strengthen their portfolios.

Three exchange-traded funds (ETFs) that could help you achieve this goal are listed below. Here's why they could be worth considering in the current uncertain economic environment:

Global Healthcare ETF – Currency Hedged (ASX: DRUG)

The first ASX ETF to look at is the Global Healthcare ETF. This ETF provides investors with easy access to the largest global healthcare companies, hedged into Australian dollars. Given how healthcare companies can typically pass rising costs on to consumers, this provides investors with some level of inflation protection. It is for this reason that Betashares' chief economist, David Bassanese, recently suggested it would be a good option in the current environment. Among its holdings are healthcare giants such as Astra Zeneca, Johnson & Johnson, Merck & Co, and Pfizer.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another ASX ETF that could be worth considering according to Bassanesse is the Betashares Global Quality Leaders ETF. It offers investors access to a portfolio of approximately 150 high-quality companies outside Australia. To be included in the fund, a company needs to rank highly with four key metrics. These are return on equity, debt-to-capital, cash flow generation ability, and earnings stability. The ETF includes companies such as Alphabet, L'Oreal, Microsoft, Nvidia, and Visa.

iShares Global Consumer Staples ETF (ASX: IXI)

A final defensive ASX ETF to look at is the iShares Global Consumer Staples ETF. This ETF gives investors exposure to the world's largest global consumer staples companies. This includes giants such as Coca-Cola, Nestle, PepsiCo, Procter & Gamble, Unilever, and Walmart. As the products these companies manufacture and/or sell are always in demand whatever is happening in the economy, they appear well-placed in the current economic environment.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Merck, Microsoft, Nvidia, Pfizer, Visa, and Walmart. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson, Nestlé, and Unilever Plc and has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has positions in and has recommended iShares International Equity ETFs - iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Alphabet and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

A man in his 30s with a clipped beard sits at his laptop on a desk with one finger to the side of his face and his chin resting on his thumb as he looks concerned while staring at his computer screen.

The pros and cons of buying the Vanguard US Total Market Shares Index ETF (VTS)

There are both positives and negatives to this ETF.

Read more »

ETF written with a blue digital background.

4 ASX ETFs to supercharge your wealth

These could be the ETFs you're looking for in 2024.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

Meet the ASX's new NASDAQ ETFs

The ASX has just seen its Nasdaq ETF count double.

Read more »

child in superman outfit pointing skyward, indicating a rising share price

Is the Vanguard Australian Shares Index ETF (VAS) a good buy for beginners?

Should new investors start with the VAS ETF?

Read more »

A businessman holding a world globe in one hand, representing global investment.

These ASX ETFs could be world class options in February

These ETFs could give your portfolio a boost in 2024. Here's what you need to know about them.

Read more »

Woman on her phone with diagrams of tech sector related elements linking with each other.

Here are 3 exciting ASX tech ETFs to buy right now

These ETFs give investors access to some quality tech stocks.

Read more »

A smiling little boy helps his father plant a tree, indicating that big things grow from a small beginning.

I'm planning to buy this top ASX ETF for my child

This investment ticks many of the boxes I’m looking for.

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.

Buy and hold these ASX ETFs for 10 years or more

These ETFs could be top long term investments. But what are you buying?

Read more »