Portfolio safety can are available many varieties, from particular person inventory picks with defensive traits to investing in particular index funds with chubby publicity to sure key defensive tendencies within the coming 12 months.
I feel some passive investing by way of ETFs is at all times an excellent technique, and that’s core to my private investing mantra. Nevertheless, for inventory pickers on the market (and who doesn’t like to select winners), I’ve additionally received just a few potential winners within the New Yr I feel buyers would do properly to think about right here.
With that stated, let’s dive into two prime Canadian shares I feel can present ample draw back safety for these pondering long run.
Boyd Group
With the common age of vehicles on North American roads persevering with to extend (and there are expectations this development will proceed for a while), former development inventory champion Boyd Group (TSX:BYD) is one among my prime concepts for 2026.
The thesis round this firm is comparatively easy. If automobile house owners preserve their vehicles in use for longer, there’s going to be a better impetus to repair up their autos and preserve them operating than tackle a brand new auto mortgage with a sky-high fee. And since new and used autos at the moment are amongst their most costly ever (with the common new automobile costing a bit greater than US$50,000 a pop), this can be a development I feel might be in place till costs or rates of interest come down meaningfully.
I don’t anticipate both to be the case in 2026, so Boyd Group (one of many largest auto physique operators in North America) stays a strong wager. As the corporate continues to consolidate this fragmented trade and enhance its pricing energy (and margins), I feel the inventory’s muted year-to-date achieve of three% might be the shopping for alternative long-term buyers are on the lookout for.
RBC 1–5 Yr Laddered Canadian Bond ETF
One other key choice I feel Canadian buyers can take into account for significant upside if rates of interest come down (but additionally portfolio safety within the occasion equities slide general) is the RBC 1–5 Yr Laddered Canadian Bond ETF (TSX:RLB).
This ETF offers buyers with publicity to short-duration Canadian bonds. Thus, for individuals who assume the brief finish of the yield curve is prone to proceed to return down as Tiff Macklem and the Financial institution of Canada proceed to drop charges, that is the way in which I’d go to play this development.
With a present dividend yield of three.2% and a short-duration bond portfolio, buyers received’t see significant swings from long-term rates of interest. Lengthy-term charges can nonetheless fluctuate because of tariff, commerce, or macroeconomic issues, which have impacted this sector up to now. In different phrases, I consider this ETF as one of many safer methods to play declining yields over the course of the approaching years.
Importantly, this ETF offers this yield in laddered kind, offering extra constant revenue for these seeking to generate such yield, which might be reinvested in different property over time. As a substitute of parking one’s money as money throughout the portfolio, that is the way in which to remain invested and earn yield whereas ready for higher alternatives to come up.
