#defensive-etfs

#defensive-etfs

"This is a system shock," says Nigel Green, CEO of deVere Group. "You have a material energy supply disruption and a structural shift toward fragmentation."

The SPDR S&P Aerospace & Defense ETF (XAR) tracks the S&P Aerospace & Defense Select Industry Index using equal-weight methodology, meaning every one of its 41 positions receives roughly the same allocation. This design choice is the fund's defining feature, allowing broad coverage of defense primes, mid-tier suppliers, space launch companies, and drone manufacturers in a single vehicle.

While most active ETFs fail to keep up with indices, that's not true about every actively managed fund. It turns out there are a few active ETFs that have outperformed the S&P 500 in recent years. Adding these picks to your portfolio can provide additional diversification and possibly boost your returns.

Instead of trying to predict whiplashing oil prices, consider investing in energy ETFs like the Invesco WilderHill Clean Energy ETF and First Trust North American Energy Infrastructure. These ETFs provide exposure to sectors such as pipelines and shipping, independent of oil price fluctuations.