Which defensive shares are outperforming the ASX 200

It's been a down year thus far for ASX 200 shares. 

Australia's benchmark index has experienced volatility in 2026. 

This has been due to several headwinds including inflation, interest rate hikes and global conflict. 

At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is essentially flat for the year to date.

The case for defensive shares

With market volatility continuing to rattle investors in 2026, defensive ASX shares are once again proving their worth. 

Companies operating in essential sectors such as consumer staples, utilities, and telecommunications tend to generate relatively stable earnings regardless of economic conditions. 

This makes them attractive when growth stocks are under pressure. 

While defensive shares may not deliver the market's biggest gains during bull runs, their ability to preserve capital, maintain reliable cash flows, and often pay consistent dividends can provide valuable stability during uncertain periods. 

For long-term investors, the recent market weakness could present an opportunity to accumulate high-quality defensive businesses at more attractive valuations while positioning a portfolio to better withstand further volatility.

Here are three examples of defensive shares that have held steady in 2026 and outperformed the ASX 200. 

Woolworths Group Ltd (ASX: WOW)

Woolworths shares are a popular defensive option amongst investors. 

As one of Australia's supermarket giants, it sells essential products that consumers continue to buy regardless of economic conditions. 

This resilience helps support relatively stable revenue and cash flow, making Woolworths a popular choice for investors seeking stability during periods of market volatility.

This has been on full display this year, as Woolworths shares have risen almost 20% year to date. 

Telstra Group Ltd (ASX: TLS)

Telstra is often viewed as a defensive stock because it provides essential telecommunications services that households and businesses rely on regardless of economic conditions. 

Its recurring revenue from mobile, internet, and infrastructure services helps support relatively stable cash flows even during periods of market volatility.

So far in 2026, it has been able to shake some of the broader market sell-offs and rise just over 5%. 

It also provides some volatility relief through its historically high dividend yield, which can also provide passive income during down periods of capital growth. 

Transurban Group (ASX: TCL)

Finally, Transurban Group is considered defensive because it operates toll roads that generate predictable, usage-based revenue from essential commuter and freight traffic. 

Its long-term concession agreements and inflation-linked pricing features further enhance the stability and visibility of its cash flows through economic cycles.

The company has seen its share price rise 6% so far year to date, outperforming the broader ASX 200.