There are a number of great ways Canadian investors can make their portfolios more defensive. I do think now is definitely the time to do so, given the volatility we’ve seen and are likely to continue to see in the near-term moving forward.
In this article, I’m going to discuss one exchange traded fund (ETF) in the utilities sector I believe is a great pick for such investors.
The iShares Capped Utilities ETF (TSX:XUT) is a great option for investors seeking exposure to utilities. This is because this fund has a high level of exposure to regulated utilities. This provides investors with an extremely stable level of recurring earnings and cash flows which support the relatively juicy dividend yield this ETF provides.
Among the sectors with the safest highest-quality dividend yields, utilities certainly top my list as one investors ought to consider as long-term core holdings for a portfolio with an income mandate.
For those not looking to reach for yield but want a reasonable yield, this ETF provides an excellent defensive option for such investors. Given the fragile state of the global economy with unknown future impacts stemming from this pandemic, focusing on a highly defensive sector such as utilities can provide investors with a sleep at night portfolio, something that is priceless in a time of volatility like now.
Invest wisely, my friends.
