Defensive Stock Portfolio

Macquarie Research Equities (MRE) note that ""

With investors increasingly risk averse, share prices are at risk in this reporting season if profit delivery does not match the market’s expectations. This change in investor risk appetite driven by concerns over the outlook for global growth and the continued increase in cash rates around the world (ECB and Bank of England the most recent) is impacting on market valuations.

Tighter monetary policy in both the US and Australia is leading the overall economic slowdown in both countries. In this environment revenue growth will slow, but for consumer spending related sectors in particular, the outlook for operating margins is vulnerable.

They note that the sectos most at risk are:

The sectors most exposed to this margin risk, in MRE’s view, includes discretionary retail, food and beverage, transport, building materials (especially NSW focused), steel, domestic manufacturing and media.

MRE's basket of defensive stocks:

MRE have highlighted however that a number of stocks in the utility and infrastructure area lack real defensive qualities, given operating cashflow have been and are forecast to continue to be insufficient to cover the expected dividend expense. MRE have therefore sought defence in via the banking, LPT sectors, and selected oligopolies.
WPL, WOR, BHP, RIO, WES, TOL, NAB, ANZ, WBC, AMP, QBE, WOW, BIL, ALL, PBL, CSL, WDC, GPT, and SGP