Investors are pouring into this defensive corner of the stock market amid fears of an economic slowdown

Amid fears of a recession and increased market volatility, analysts have been pointing to defensive stocks as a safe bet to hedge macro risk.

Among defensive sectors — which include things like real estate and financials — investors recently have been pouring into consumer staples in particular.

The S&P 500’s consumer staples sector has risen roughly 4.1% in the last month, handily outpacing the S&P 500, which is up just over 1% in that time.

Retailers like Walmart and Target have skyrocketed 9.2% and 5.7% respectively in the last month, while consumer goods producers like Clorox and Coca-Cola are up 11.2% and 4.5%.

“The US consumer is reacting to the softer labor market, exhausted pandemic savings, and high interest rates. Signs of this reaction are visible across many angles, including the degree of outperformance in staples versus discretionary stocks,” Bank of America strategists said in a note earlier this month.

Defensive stocks historically do well in times of economic uncertainty, which has led to a growing chorus of analysts recommending investors take positions in more “boring” companies, and resist the allure of high-flying bets on things like artificial intelligence.

“Lately, the market has skewed much more defensively as it has worried more about growth and less about high inflation or rates,” Morgan Stanley’s chief US equity strategist Mike Wilson said in a Monday note.

“Since the spring, the relative performance of defensives over cyclicals has been the strongest since the last recession ended,” he added.

Last week, Wilson said investors should reallocate AI investments toward quality defensive stocks, including staples.

That redirection could broaden a market rally that’s been largely driven by tech stocks this year.

The S&P Global Semiconductor Index is down 6.26% for the month, with the tech sector seeing outflows of $2.97 billion in the last two weeks, according to LSEG Lipper data cite by The Financial Times. Consumer staples, meanwhile, have seen $1.43 billion of inflows in the same time period.

This week, Bank of America equity strategy chief Savita Subramanian similarly advocated for defensive stocks.

“I know this is the most boring call of all time, but sometimes boring is good,” Subramanian said in a Bloomberg interview on Monday.

With the Federal Reserve likely to finally cut rates at its meeting this week, defensive stocks could be poised for further growth.

“Defensives tend to outperform cyclicals fairly persistently both before and after the cut,” Wilson said.