5 Stocks and ETFs to Help Shield Your Portfolio During Volatility

Core Viewpoint - The article discusses five stocks and ETFs that may be attractive to investors seeking defensive positions amid ongoing market volatility, emphasizing sectors that historically perform well during downturns [1][30]. Group 1: Market Conditions - Lingering tariff concerns, a weakening U.S. dollar, and a significant correction in cryptocurrency markets have contributed to risk-off behavior among investors, with Bitcoin falling nearly 40% from last year's highs [2]. - The tech sector has been a major driver of market turbulence, with tech stocks, particularly software, facing challenges due to stretched valuations and heavy capital spending related to AI, leading to a nearly 22% decline in the iShares Expanded Tech-Software Sector ETF (BATS: IGV) year-to-date [3][6]. Group 2: Defensive Sectors and ETFs - Defensive sectors such as healthcare and consumer staples are attracting capital as investors seek stability amid tech-led weakness and rising volatility [6][30]. - The Health Care Select Sector SPDR Fund (NYSEARCA: XLV) is highlighted for its defensive characteristics, offering exposure to essential healthcare services and a 1.6% dividend yield, with strong liquidity and institutional interest [7][9][11]. - The Consumer Staples Select Sector SPDR Fund (NYSEARCA: XLP) provides exposure to companies producing everyday necessities, maintaining stable demand even during recessions, and has surged over 13% year-to-date [17][19]. Group 3: Individual Stocks - Johnson & Johnson (NYSE: JNJ) is noted for its stability, with shares up almost 16% year-to-date and a diversified business model that ensures consistent demand across pharmaceuticals, medical devices, and consumer health products [13][15][16]. - Coca-Cola (NYSE: KO) is recognized for its defensive nature and strong performance, with a dividend yield of approximately 2.6% and a favorable analyst consensus rating, benefiting from consistent consumer demand for its products [20][23][24]. Group 4: Dividend-Focused Strategies - The Vanguard High Dividend Yield ETF (NYSEARCA: VYM) is presented as a strong option for investors seeking diversification and income, yielding 2.25% and outperforming the broader market with an 8% increase year-to-date [25][27][28]. - Dividend-focused strategies, including ETFs and individual stocks like JNJ and KO, are emphasized as effective ways to maintain equity exposure while providing downside protection during market volatility [30].