Economic Slowdown? These Blue Chip ETFs Might Be Your Defensive Play

Inflation cooling down, rate cuts on the horizon—sounds bullish, right? Not necessarily for your portfolio. Here’s the catch: when inflation drops, economic growth usually follows. Case in point—US real GDP just decelerated to 1.6% in Q1 (down from 3.4% in Q4 2023). Manufacturing output fell 0.3%, housing starts dropped 0.4%. Classic slowdown signals.

The Dow briefly broke through 40K in mid-May on the CPI data, but don’t get too excited. When growth stalls, that’s exactly when blue chips shine. These established heavy-hitters are built to weather the storm.

Two Fidelity ETFs worth looking at:

FBCG (Blue Chip Growth)

• Hunts for large-cap winners with pricing power and competitive moats
• Targets companies where growth has been underpriced by the market
• Expense ratio: 0.59%

FBCV (Blue Chip Value)

• Digs for undervalued large-caps trading below intrinsic value
• Emphasizes margin of safety + lower volatility
• Expense ratio: 0.59%

Both actively managed, both solid for defensive tilts. FBCG if you still want upside, FBCV if you want to sleep at night. Pick your poison based on whether you’re betting on growth or protection in a slowdown scenario.