The Big Question: Are global defensive stocks now too expensive?

With investors worried about global growth, and 'safe-haven' government bonds yielding near record-low amounts, investors have piled into 'defensive' stocks, but are they just too pricey now? Below, experts give their views.

Ashok Shah, investment director, London & Capital Progress expected Defensive stocks have performed well over the last few years, benefiting from a flight to safety. On a valuation basis, S&P consumer staples are trading at a premium, with a P/E of 16.85 versus a broad index P/E of 14.46. However, the S&P is cyclically sensitive. Therefore, a slowing global economy will impact cyclical and leveraged stocks, ie negatively impact earnings. As these disappointing earnings are reported, PER will rise, thereby reducing the premium at which defensive stocks trade. OECD countries rema...