NEW YORK (Fabian Capital Management) -- Investors who are concerned about the recent volatility in the stock market may want to consider looking at conservative equity strategies to protect their assets. There are a number of exchange-traded funds that have proven to be dual-purpose vehicles for steady capital appreciation and income despite the turmoil in high-beta sectors.
Rather than completely pulling back your portfolio exposure to fixed-income or cash, you can reposition your equity sleeve to more defensive areas that still offer compelling growth opportunities.
One under-the-radar ETF that has had a very strong start to the year is the Guggenheim Defensive Equity ETF (DEF). This ETF is made up of 100 global stocks that constitute the Sabrient Defensive Equity Index, which provides exposure to market sectors that have historically performed well in down markets.
So far this year, DEF has gained 6.3% and recently hit a new all-time high this week. It's also worth noting that DEF has gained in every subsequent year since 2008, when it lost 30%. Currently this fund has more than $130 million positioned in energy, utilities and telecommunications, which combined make up more than 55% of the total portfolio. One of the things I like about DEF is that the underlying holdings are well diversified to help weather volatility while still providing plentiful opportunity for capital appreciation in an up market. The net expense ratio of this ETF is currently listed at 0.65%.
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