5 ETFs to Ride Out the Recession

Here are five solid strategies and five corresponding ETFs to help you navigate this tiresome recession

Alastair Kellett 11 September, 2012 | 8:00AM

Several years since the global financial crisis reached its nadir in early 2009, a robust economic recovery has been largely elusive. Many countries within the developed world have “double-dipped” back into recession, and others threaten to follow. In Europe, even the resilient German economy is managing to eke out only small doses of growth, most recently registering a quarter-over-quarter advance of 0.3% through the end of June. Meanwhile in the US, voters will head to the polls in a general election this autumn with an anaemic domestic economy at the top of their minds.

If you want to protect yourself from dark economic clouds on the horizon, your first moves may be through your broad asset allocation, for example by shifting towards cash and bonds, or hard assets like gold or real estate. But even within the equity sleeve of your portfolio there may be ways to create a defensive tilt.

Here are five strategies to invest defensively, and we have provided an exchange-traded fund (ETF) example that could be used to implement each of the strategies. In every case, the strategy or fund will have distinct risks of its own, and you wouldn’t want to pursue one in isolation, but rather as part of a diversified portfolio. And while some of these did actually provide some valuable cover during the global financial crisis, employing tactics that worked well in the last war is no guarantee of victory in a yet-to-be-fought battle.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alastair Kellett

Alastair Kellett  is an ETF analyst with Morningstar Europe.

Audience Confirmation

By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies