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Defensive ETF (DEF) Hits New 52-Week High

Sweta Killa
Equifax Inc. (EFX) could be a stock to avoid from a technical perspective, as the firm is seeing unfavorable trends on the moving average crossover front

For investors seeking momentum, Invesco Defensive Equity ETF DEF is probably on radar now. The fund just hit a 52-week high, and is up 15% from its 52-week low price of $43.68/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

DEF in Focus   

DEF provides exposure to companies that potentially have superior risk-return profiles during periods of stock market weakness while still offering the potential for gains during periods of market strength. It is tilted toward large-cap stocks with key holdings in healthcare, industrials, information technology and consumer discretionary. The fund charges investors 60 basis point a year in fees (see: all the Large Cap ETFs here).

Why the Move?

The defensive corner of the stock market has been an area to watch lately given the escalating tit-for-tat tariff threats. President Trump has imposed a new tariff of 10% on $200 billion worth of Chinese goods starting next week. The tariff will be increased to 25% effective Jan 1. China has hit back with tariffs of 10% on $60 billion American goods. Though the tariffs were lower-than-expected and resulted in a market rally, some sectors will likely be hit hard.

More Gains Ahead?

Currently, DEF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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GUGG-DEF EQUITY (DEF): ETF Research Reports
 
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