Why defensives are back in fashion

Defensive companies have been out of favour for a long time but now a series of factors could push them back into the spotlight, writes Richard Jeffrey, chief investment officer, Cazenove Capital.

Defensive companies have been out of favour for so long, any attempt to suggest they may resurge is rightly met with some scepticism. The staid mega-caps in pharmaceuticals, tobacco and telecoms may have been cheap, but there were few catalysts for a change in market sentiment. However, there is a confluence of factors that should create momentum for a number of these unloved giants. Perhaps the first and most important point supporting a more defensive orientation to markets is that some of the notable success stories of the past few years are running out of steam. This is particularly ...