Three out-of-favour defensive stocks

Professional investor Philip Matthews favours shares that missed out in the past year's rally, despite posting positive earnings and offering high dividend yields. So he has repositioned his portfolio to include unfashionable but solid defensive companies. Here, he picks three to buy now.

Each week, a professional investor tells MoneyWeek where he'd put his money now. This week: Philip Matthews, manager of the Jupiter Income and Growth Fund.

After a period in which the market has been favouring cyclical firms, I've repositioned my portfolio. Some of the more cyclical holdings, such as IMI and Invensys, have been removed and I've reinvested the proceeds in firms with defensive earnings in sectors that have been out of favour. I like shares that have lagged the past year's rally, despite seeing positive earnings flows and offering high dividend yields.

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