Amidst the backdrop of an economic slowdown and a possible recession in the US, I have developed an exchange-traded fund [ETF] designed to provide investors with market-beating returns in any economic environment. The fund concentrates on stocks with market caps over $1 billion that are growth leaders in their businesses and focused on products and services that people need regardless of the economy.
My Recession Proof ETF is based on the premise that people will continue to eat, drink, smoke, take medications, pay their utility bills, and maintain health/life insurance no matter how bad things get. My Recession Proof ETF contains a range of stocks from small-cap to mega-cap, with an average of just under $40 billion for the 22 active stocks chosen from among 30 eligible companies. The dividend yield of 1.8% for my fund mirrors that of the S&P 500 (SPY) ETF, but my fund has produced a gain of 11% over the last 52 weeks versus a loss of about 6% for the S&P 500 ETF.
Many of the stocks in this fund are household names such as Heinz (HNZ), Colgate Palmolive (CL), and AT&T (T), but it also contains lesser known, fast-growing and recession-proof companies such as China Life (LFC) and Universal American (UAM).