We've always lived in an uncertain world. However, I think it's fair to say that 2026 is shaping up to be a lot more uncertain than 2025. If the energy shocks that have gripped the globe since the start of March continue, we might be looking at the most uncertain year since 2020. Investing through such uncertainty can be intimidating. That's why I think one ASX exchange-traded fund (ETF) is worth a look right now.
It's my view that ASX investors who are looking to brace their portfolios against further geopolitical or economic shocks should resist the siren's song of buying energy shares, oil ETFs or other short-term bets.
Instead, those investors should consider which companies are best placed to protect their earnings bases amid the significant challenges that the world is currently throwing their way.
It's my view that consumer staples stocks are a sector that is best positioned to protect investor capital amid high levels of uncertainty. Consumer staples stocks are companies that produce or sell goods that we tend to need to buy regularly. That includes food, drinks and household essentials, as well as alcohol and tobacco. Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Endeavour Group Ltd (ASX: EDV) are all prominent examples on the ASX.
However, I think an ASX ETF is a better option than a single ASX stock in terms of protecting a portfolio against uncertainty. That's why I think the iShares Global Consumer Staples ETF (ASX: IXI) is a perfect fund for an uncertain 2026.
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Why this ASX ETF is an antidote for uncertainty
As the name implies, this ASX ETF holds a basket of global consumer staples stocks. These range from food and drink producers like Coca-Cola Co, Nestle and Cadbury-owner Mondelez International and makers of household essentials like Colgate-Palmolive and Procter & Gamble to staples retailers and grocers like Walmart, Costco Wholesale and Kroger. Even our own Woolworths and Coles feature as holdings.
It's my view that these sorts of companies can ride out economic shocks and inflation better than any other sector. We all need to buy food and household essentials on a regular basis. That means that, although painful to consumers, these companies can effectively pass on higher costs without the threat of significant sales losses.
Even if consumers switch en masse from expensive branded products to cheaper home-brand options, this ASX ETF holds a mix of companies with strong brands (Procter & Gamble, Coca-Cola) and supermarket stores, mitigating this potential trend.
IXI's holdings are also spread across many different markets, also lowering geographic and currency risk to the ASX investor.
Pulling all of these factors together, and I think we have an ASX ETF that is a perfect investment for the uncertain world we find ourselves in in 2026.
