Looking For A Trade War Defence

The battle over tariffs is starting to get investors’ attention—but where’s the shelter?

- Sarah Ponczek

During months of heated rhetoric surrounding trade and tariffs, Wall Street strategists and advisers largely assumed it was all just brinkmanship. But suddenly more of them are advising investors to go defensive. Easier said than done in 2018, when every global market is intertwined. S&P 500 companies got 43 percent of their sales from overseas in 2016, according to a report from S&P Global Inc. “There is a lot of debate on what is a defensive sector,” says Emily Roland, head of capital markets research at John Hancock Investments.

Some say you should shift assets to smaller companies. They’re more domestically oriented and should provide insulation from a trade war, the thinking goes. Others hail consumer staples. If the economy slows, people will still need toothbrushes and diapers, right?