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Consumer Staples

Consumer staples are essential products such as food and drinks, household goods, and hygiene products.

We need these things regardless of how the economy is doing.

If a recession hits the U.S. economy, many companies will likely see their business deteriorate. However, we’ll probably still see Quaker Oats and Tropicana orange juice — made by PepsiCo (PEP) — on families’ breakfast tables. Meanwhile, Tide and Bounty — well-known brands from Procter & Gamble (PG) — will likely remain on lists coast to coast.

You can gain access to the group through ETFs like the Consumer Staples Select Sector SPDR Fund (XLP) and the Vanguard Consumer Staples ETF (VDC).

More: Simple investment strategy

Utilities

The utilities sector consists of companies that provide electricity, water, natural gas and other essential services to homes and businesses.

The sector isn’t a fascinating one, but it is recession-resistant: No matter what happens to the economy, people will still need to heat their homes in the winter and turn the lights on at night.

Meanwhile, high barriers to entry protect the profits of existing utility companies. Building the infrastructure needed to deliver gas, water, or electricity is quite expensive, and the industry is highly regulated by the government.

Thanks to the recurring nature of business, the sector is also known for paying reliable dividends.

If you are looking for the best utilities stocks, names in the Utilities Select Sector SPDR Fund (XLU) provide a good starting point for further research.

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Healthcare

Healthcare serves as a classic example of a defensive sector thanks to its lack of correlation with the ups and downs of the economy.

At the same time, the sector offers plenty of long-term growth potential due to favorable demographic tailwinds — particularly an aging population — and plenty of innovation.

Average investors might find it difficult to pick out specific healthcare stocks. But healthcare ETFs can provide both a diversified and profitable way to gain exposure to the space.

Vanguard Health Care ETF (VHT) gives investors broad exposure to the healthcare sector.

To tap into specific segments within healthcare, investors can look into names like iShares Biotechnology ETF (IBB) and iShares U.S. Medical Devices ETF (IHI).