With FTSE shares and US stocks reaching record highs in 2025, there are growing concerns that today’s valuations may be getting unsustainable. As such, some investors have begun warning of a potential crash or correction later this year.
Timing a market downturn’s a tricky endeavour. And it’s something that even professionals get regularly wrong. However, not all of the brewing economic concerns are without justification. As such, investors concerned about volatility may want to take steps to prepare… just in case.
Of course, nothing’s ‘crash-proof’. But luckily, the London Stock Exchange is filled with defensive businesses that could fare better than others, should the worst-case scenario occur. And three of the most popular are Unilever (LSE:ULVR), Tesco (LSE:TSCO), and National Grid (LSE:NG.).
Defensive consumer staples
Regardless of economic wobbles, people still need to eat. And this reality’s how both Tesco and Unilever have historically chugged along nicely, rewarding shareholders with a steady stream of dividends. Looking back at the height of the British cost-of-living crisis throughout 2022 and 2023, Unilever’s sales and earnings proved resilient, allowing the stock to climb higher.
While product volumes were impacted, strong brand loyalty allowed the company to offset the impact through price hikes. Tesco also delivered a robust performance, with new premium and price-matching offerings to attract shoppers from the likes of Waitrose and Aldi alike.
With both businesses selling everyday brands and products that enjoy stable demand, earnings are expected to remain resilient even if the wider economy decides to throw a tantrum. Of course, performance is never guaranteed.
Cost inflation combined with intense competition is a threat that both enterprises have to navigate. And that could translate into pressure on margins, especially if consumers decide to move towards private label brands or back towards heavy discounters.
Persistent energy demand
Similar to food, electricity’s another necessity for both households and businesses alike. And it’s why National Grid shares have been similarly resilient in the face of volatility throughout most of their existence on the London Stock Exchange.
To top things off, the group’s aggressive £60bn infrastructure investment scheme also seeks to boost operating efficiency over the long run. As such, apart from benefiting from continuous and growing electricity demand, margins may be set to rise as well.
Obviously, higher and predictable earnings make for a good defensive stock. And it also paves the way to management restarting its dividend growth engine. But just like with Unilever and Tesco, there are still risks to consider.
Executing such a vast infrastructure upgrade comes with a lot of headaches, potential project delays and cost overruns. Given the group’s substantial leverage, lower-than-expected returns could still drive the share price down if investor sentiment surrounding this utility business starts to sour.
The bottom line
These FTSE shares have a lot of desirable traits that make them compelling cases for conservative investors. But no investment’s ever 100% crash resistant, with internal and external threats lurking in the background.
For investors worried about incoming volatility, these three enterprises may be worth a closer look. But it’s still essential to dig deeper and understand both the risks as well as potential safe-haven rewards.
