Credit conditions are tightening as a result of the rise in global interest rates. This should trigger a sharp growth slowdown in advanced economies, even as the consumer is holding up well for now.
Investors looking to add a defensive shield to their portfolio can consider this 1Y USD JB Tracker Certificate on the Attractive Defensives Basket.
This product provides exposure to seven stocks that our Equity Research analysts favour for when growth slows and which are on their recommendation list due to their attractive fundamentals:
• American Tower is a vital element in the US infrastructure communication network with high entry barriers, long-term earnings visibility, and a low dependence on growth.
• AstraZeneca is a key player in healthcare, our preferred defensive sector; the company offers sector-leading growth with multiple pipeline read-outs and product sales acceleration expected.
• Ahold Delhaize is among the most locally dominant food retailers, with a strong private label offering catering to cash-strapped consumers.
• L'Oréal’s business is beauty, which never seems to go out of fashion; the company has dominant brands and is growing faster than its market.
• McDonald’s is the brand name in fast food, and offers defensive growth due to its scale and investments in technology.
• Pernod Ricard is in the beverage business, which is defensive in nature, and the company stands out due to its strong organic growth driven by its pricing power and the demand trend from wine to spirits.
• RWE is a German utility, a traditionally defensive sector; it benefits from a growing renewables business and the ability to satisfy rising demand for flexible power capacity.
With its exposure to select defensive stocks, our 1Y USD JB Tracker Certificate on the Attractive Defensives Basket can help build some resilience in a portfolio as previous interest rate hikes are starting to bite and growth is slowing.
Source: Bank Julius Baer & Co. Ltd. (Julius Baer), unless explicitly stated otherwise.
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