Supermarkets and real estate stocks are the best way to play defense amid uncertainty surrounding the spreading coronavirus, Lachlan Davis, who leads IFM Investors Pty’s large-cap active equities team, says. Davis manages about $600M in Australian stocks.
His firm has added REITs, saying they’re defensive because of the steady income from rent collection. REITs are also less indebted than they were during the global financial crisis.
He also notes that consumers are "stocking up (on groceries) at the moment because they’re a little bit worried."
He's also shorting tourism weighted stocks.
IFM also holds short and underweight positions in regional banks as margins get squeezed amid anemic credit growth and expectations of further rate cuts.