Experts and analysts have warned of a looming recession as North American economies have wrestled with soaring inflation and a tight labour market. The United States economy posted its second straight quarter of GDP decline this week. Today, I want to look at two exchange-traded funds (ETFs) that are worth targeting as the odds of a recession increases steadily.
Stocks and bonds have been hit hard by volatility in recent months. That makes cash one of the few safe havens investors can turn to in an uncertain economic climate. The SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:BIL) seeks to provide exposure to zero coupon U.S. Treasury securities that have a remaining maturity of 1-3 months. This fund is focused on short term fixed income which is typically exposed to less fluctuations. Shares of this ETF have been largely flat in the year-to-date period as of mid-afternoon trading on July 29.
Vanguard Consumer Staples ETF (NYSE:VDC) is another ETF that is worth targeting in the event of a recession. This fund offers investors exposure to stocks in the consumer staples sector. Consumer staples are resilient in even rough economic conditions as they sell essential products. Shares of this ETF have dropped 4.2% in 2022.
Some of the top holdings in this ETF include consumer staples giants like Procter & Gamble, Coca-Cola, and Costco Wholesale. This is an ETF you can trust in a recession.
