3 of the Best ETFs to Buy and Hold if a Recession Is Coming
2026-10-02 17:05
•Leo Sun •The Motley Fool
•••••• •••••••• Axe Cap view
Three ETFs Worth Watching if a Recession Hits
Defensive ETFs focused on healthcare, bonds, and broad U.S. stocks can help South African investors protect capital and find growth.
With recession fears growing globally, it's smart to look beyond just the JSE. Healthcare remains one of the rare defensive sectors, so an ETF like Vanguard Healthcare (VHT) offers a diversified way into resilient names like Lilly and Johnson & Johnson, which tend to maintain steady demand during tough times. Bonds usually rally when interest rates fall; Vanguard's Total Bond Market ETF (BND) can provide stable income if the Fed cuts rates. Lastly, don’t dismiss broad U.S. equity exposure through Vanguard’s S&P 500 ETF (VOO). Despite volatility, the long-term returns have been strong—good to hold patiently rather than panic sell. For South African investors, the rand (USD/ZAR) will still influence returns from these dollar assets, so keep an eye on currency movements. This thesis could falter if a global recovery surprises on the upside or if emerging market-specific risks derail the rand further. this is just our opinion and not financial advice
Buy the Vanguard Healthcare ETF (VHT) as a defensive anchor, add BND for bond exposure to cushion volatility, and hold VOO for long-term U.S. growth. Keep an eye on USD/ZAR, as rand weakness can both help and hurt returns.
- VHT
- BND
- VOO
- USD/ZAR
- Sharper-than-expected U.S. economic recovery
- Rand volatility affecting dollar-based ETF returns
6/10
The article recommends three ETFs as defensive investments during an anticipated recession: Vanguard Healthcare ETF (VHT) for exposure to non-cyclical healthcare stocks, Vanguard Total Bond Market ETF (BND) to benefit from expected interest rate cuts, and Vanguard S&P 500 ETF (VOO) for long-term growth despite near-term volatility. Historical data shows the S&P 500 has delivered 10% annual returns despite recessions, suggesting buy-and-hold strategies outperform panic selling.
Our take is based on reporting first published by The Motley Fool.