Betashares Reveals 6 ‘Defensive’ ASX ETFS Suitable for Protection During a Recession

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Betashares have recently highlighted six ASX exchange-traded funds (ASX ETFs) that may be worth considering if a recession is on the horizon. 

David Bassanese, the chief economist of ETF provider Betashares, warned that the global economy has a 50 per cent chance of entering a recession.

“Our most likely scenario is that the lagged impact of policy tightening over the past year, along with further modest tightening in the first half of 2023, soon leads to a notable slowing in global economic growth, such that the US, in particular, descends into outright recession,” Bassanese said.

The first ETF is a Global Healthcare ETF – Currency Hedged (ASX: DRUG), offering investors exposure to some of the largest healthcare companies worldwide while hedging into Australian dollars. Bassanese highlighted that these leading healthcare firms are primarily pharmaceuticals, deemed ‘defensive’ and able to pass on higher prices to consumers. 

The Betashares Australian Quality ETF (ASX: AQLT) is also among the six ASX ETFs which seek to mimic an index comprising 40 high-quality ASX companies such as CSL Limited (ASX: CSL) and Telstra Group Ltd (ASX: TLS). The fund is geared toward investors looking to protect their investments from potential recessionary losses. 

Investors looking to bolster their portfolios against an economic recession may consider the Betashares Global Quality Leaders ETF (ASX: QLTY). This ETF exposes investors to around 150 global companies, excluding those from Australia. 

Bassanese recommends three additional ETFs concentrating on bonds and cash for investors to consider in the present market.

According to the chief economist, “Market pricing suggests that rate cuts could be on the horizon. If markets are correct about this, and a US recession does occur, this could create favourable conditions for a rally in government bonds.”

By considering Betashares’ defensive ETFs, investors can develop a portfolio designed to protect their investments during an economic downturn. 

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