NEWLY ENHANCED TO COMBAT DOWN MARKETS
DEFENSIVE GROWTH FUND
The Defensive Growth Fund combines defensive, non-cyclical stocks with a portfolio of short positions designed to provide positive returns when equities are down.
Broad Diversification. Our fund has a diversified portfolio across numerous “defensive” sectors. Defensive sectors can generate stable profits throughout all phases of the economic cycle
Potential Gains in Down Markets. Short positions allow investors to benefit from the anticipated under-performance of securities
Tax Losses In Up Markets. The presence of short exposure provides opportunities for realizing capital losses in up markets, when capital losses from long positions are scarce.
WHY INVEST IN "DEFENSIVE" SECTORS?
Defensive stocks are characteristic of companies that produce goods and services people tend to buy out of necessity regardless of economic conditions. AmericaFirst classifies the following sectors and industries as "defensive":
Rapid innovation, major advances and an ageing population have managed to sustain the popularity of healthcare stocks. Even during economic downturns, people will still require hospitals, medical aid and medicine to overcome illness and survive.
Companies engaged in the manufacturing of food, beverages, household and personal products, packaging, or tobacco. Also includes companies that provide services such as education & training services - goods and services that people are unable cut out of their budgets regardless of their financial situation.
Utilities & Telecommunications
Telephone, water, gas and electric utilities are an example of defensive stocks because people need them during all phases of the business cycle. Utility companies also are thought of as benefiting from slower economic environments because interest rates tend to be lower and their competition to borrow funds is much less.
Defensive & Aerospace
With a steady flow of government money, defense stocks have long been considered a safe haven when the economy slows down and the market begins to sputter. The Aerospace sector, one of the largest and most powerful industries in the United States, supplies five markets: military aircraft, missiles, space, commercial airliners and general aviation.
Real Estate Investment Trusts
Residential Real Estate Investment Trusts (REITs) are defensive, as people always need shelter. Plus, REITs are required to pay a minimum of 90% of their taxable income in the form of shareholder dividends each year. Real Estate Investment Trusts (REITs) are typically seen as a defensive investment bet as their large dividend payouts often offset slow but predictable growth
Railroads are a significant part of the North American economic infrastructure. No widget, computer, grain for food or automobile is worth a thing if it cannot move from the factory floor to the customer. As the top provider of freight transport in North America, railroads are an essential part of the economic infrastructure regardless of Market trends.