Berenberg: Get defensive with healthcare, utilities and telecoms
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Berenberg advised investors on Tuesday to get defensive following the stock market rally (SPY) (SP500) (DJI) (COMP.IND) in the first three quarters of 2023, saying signs now indicate that a rollover may be on the horizon this winter.
As a result, the German financial institution argued that defensive industries such as healthcare, utilities, telecoms, and drug and grocery stores can act as a hedge and protective stance for investorsâ portfolios.
"Defensive exposure looks attractive here to us, to ride out near-term growth headwinds and a period of elevated uncertainty," Berenberg stated in an investor note.
"Defensive underperformance has driven a sharp de-rating relative to the US market on a P/E, dividend yield and price/book basis." Berenberg added. "US defensives have never been so cheap on these valuation measures versus the market ahead of a US downturn; we see interesting hedging opportunities."
For investors that share a similar line of thought, here is a group of potential names to consider:
Healthcare:

Health Care Select Sector SPDR Fund (XLV)
UnitedHealth Group Inc (UNH)
Johnson & Johnson (JNJ)

Utilities:

Utilities Select Sector SPDR Fund (XLU)
NextEra Energy Inc (NEE)
Duke Energy Corp (DUK)

Telecoms:

Vanguard Communication Services ETF (VOX)
Verizon Communications Inc (VZ)
AT&T Inc. (T)

Drug and Grocery Stores:

CVS Health Corporation (CVS)
Walgreens Boots Alliance, Inc. (WBA)
The Kroger Co. (KR)


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