The defensive stock outperformed during a hard time but they are not probably the best stock to choice during the upswings in the business cycle.
In low-interest rate environments defensive stocks tend to offer a higher dividend yield. The reason is they are not usually as risky as regular stocks and it usually takes a major struggle to split their business model.
It should also be known that most investment managers have no choice but to own stocks, and if they think times are going to be harder than normal, they will migrate toward defensive stocks.
In the current scenario when the global market is on uncertainty due to the trade war, political issues and several other issues, the consumer staples sector is starting to rebound, meaning investors may be “rotating toward more defensive areas of the market. Healthcare and utility sector also starting rebounded.
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