History Says This Is Hands-Down the Best ETF to Buy if a Bear Market Is Coming

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When Bear Markets Loom, Look Beyond Pure Tech

South African investors should consider defensive sector exposure as global tech faltered in downturns while dividend-heavy ETFs held up.

The Schwab U.S. Dividend Equity ETF (SCHD) teaches a valuable lesson: bear markets favour companies with steady cash flows over flashy growth. In 2022, tech-heavy indices plunged, but sectors like consumer staples, healthcare, and energy held up better. Naspers and Prosus, South Africa’s tech proxies, remain volatile and tied to global risk appetite. Meanwhile, domestic defensives like Shoprite and Woolworths have reliable cash flows even when spending tightens. SCHD’s strategy of owning dividend payers with minimal tech exposure mirrors a local approach of leaning on steady South African blue chips rather than chasing high-flying growth. If global markets catch another cold, expect USD/ZAR volatility to spike, pressuring shares sensitive to offshore earnings. Still, if the global growth outlook surprises on the upside or stimulus measures kick in, defensive plays could lag. For now, favour quality dividends and local defensives. this is just our opinion and not financial advice