Top 5 ASX defensive shares to watch in 2025

What are defensive shares?

Defensive shares are the stocks of publicly listed companies involved in sectors that are more resilient to the highs and lows of the broader economy. These industries tend to be in-demand most or all the time, with few downturns affected by macroeconomic factors.

They usually operate in industries that provide essential goods and services, such as utilities, telecommunications, consumer staples, pharmaceuticals and essential transport or logistics.

What makes a stock defensive?

What makes these companies defensive is the stability of their earnings. Instead of relying heavily on consumer confidence or business investment cycles, their revenue tends to come from consistent, everyday demand. Because of this, defensive shares often experience smaller price swings than more cyclical sectors, and they can act as a buffer when financial markets become unpredictable.

Why the ASX is a good place to find defensive shares

The Australian share market is known for having a deep pool of high-quality defensive companies across multiple sectors. This is partly because Australia’s economy relies heavily on essential services – energy networks, major supermarkets, healthcare providers, infrastructure operators and telecommunications giants all play critical roles in everyday life.

The ASX includes a strong representation of mature, stable businesses with steady cash flow and solid dividend track records. Companies like Woolworths, Telstra, APA Group and Brambles are widely recognised as core defensive holdings due to their essential services and consistent demand.

Advantages of defensive shares

• More predictable earnings: Defensive companies usually have steady demand for their products or services, making their earnings less sensitive to economic cycles
• Lower volatility: They tend to move less dramatically than sectors like technology, mining or discretionary retail. This makes them appealing during periods of market turbulence
• Regular dividends: Many defensive businesses are mature and generate strong cash flow, allowing them to pay reliable dividends. This can be especially attractive for income-focused share traders
• Portfolio stabilisation: Adding defensive shares can help balance riskier holdings and smooth out returns in a diversified portfolio

Risks of defensive shares

• Slower growth potential: Because defensive companies often operate in mature industries, their growth may be more modest compared to fast-growing sectors
• Not immune to downturns: Defensive shares can still fall during market-wide sell-offs. They’re resilient, but not risk-free
• Interest rate sensitivity: Sectors like utilities and infrastructure often rely on debt, so rising interest rates can put pressure on their profits and valuations
• Pricing and regulatory risks: Industries such as healthcare, telecoms and energy face regulatory oversight that can affect margins and long-term strategy

Top 5 ASX defensive shares to watch in 2025

We selected these shares based on a number of factors, including:

• Strong share price growth year to date (YTD)
• Consistent performance – a core feature of defensive shares
• APA Group, Telstra and Brambles provide critical infrastructure that keeps the country running, giving them dependable revenue streams and long-term contracts
• Wesfarmers adds diversification through market-leading retail and healthcare operations, while Sigma Healthcare benefits from steady demand for medicines and pharmacy services

Together, these companies offer a balanced mix of resilience, dividend potential and moderate volatility, making them suitable for both long-term share traders and CFD traders looking for opportunities in defensive sectors.

Overview of the shares in this article

All the shares in our article can be share traded and CFD traded with us.

All figures are accurate as 21 November 2025.

1. APA Group (ASX: APA)

Industry: Utilities

Market cap: A$12.30 billion⁶

APA Group is one of Australia’s largest energy infrastructure owners and operators, including gas transmission pipelines, storage facilities and renewable energy assets. Its network spans thousands of kilometres and forms a crucial part of the country’s energy supply. Because energy infrastructure is essential – and often operates under long-term contracts – APA has historically delivered stable, predictable earnings, even when markets get choppy. For share traders, this consistency is a major drawcard, especially during uncertain economic periods.

However, APA is sensitive to interest rate movements since it carries significant debt, common for utility and infrastructure providers. Higher rates can increase refinancing costs and weigh on valuations. Regulatory changes, political pressure around energy prices and delays in major projects can also affect returns.

While earnings are generally stable, the share price can still move meaningfully on macro announcements, offering some potential interest for CFD traders.

Why it’s considered defensive

Utilities are classic defensive investments because energy consumption tends to remain steady regardless of the economic backdrop. APA’s long-term contracts, regulated assets and essential role in the energy network mean its performance doesn’t swing as dramatically as other, more cyclical sectors. This makes APA appealing to conservative share traders while still offering enough movement for active CFD traders.

2. Wesfarmers Limited (ASX: WES)

Industry: Retail trade

Market cap: A$90.72 billion⁷

Wesfarmers is one of our country’s most diversified companies, owning well-known businesses across retail, chemicals, fertilisers, office supplies and pharmaceuticals. Its biggest brands include Bunnings, Kmart, Target and Officeworks – names that Australians rely on day-to-day. This wide portfolio helps Wesfarmers perform relatively steadily through economic cycles because it isn’t reliant on one single segment.

The company has a strong balance sheet, disciplined capital management and a history of making smart long-term acquisitions. Share traders often view Wesfarmers as a reliable dividend payer with solid growth potential.

Although considered defensive, Wesfarmers still has exposure to consumer behaviour. Retail spending can soften during economic slowdowns, affecting some divisions. Rising costs, such as labour and inventory, can also pressure margins. Competition is always a factor in retail, too, both from local rivals and increasing online players.

Why it’s considered defensive

Wesfarmers’ strength lies in its diversification and the essential nature of much of its product range. DIY goods, household supplies, office items and healthcare products remain in demand even when the economy slows. This consistency, combined with strong management and reliable dividend distributions, makes Wesfarmers a stable choice for long-term share traders.

3. Sigma Healthcare Limited (ASX: SIG)

Industry: Health technology

Market cap: A$33.53 billion⁸

Sigma Healthcare is a major pharmaceutical wholesalers and pharmacy network operators. It supplies prescription medications, over-the-counter products and medical goods to thousands of pharmacies nationwide.

Because people continue to require medication regardless of economic conditions, the pharmaceutical distribution sector tends to be more stable than many others. This gives Sigma a defensive tilt compared to companies exposed to discretionary spending.

Sigma benefits from recurring demand for medicines and healthcare products. Its scale, national footprint and logistics capabilities make it difficult for smaller competitors to match.

However, healthcare distributors do face challenges, including regulatory changes, margin pressure and operational risks in logistics. Government pricing reforms or changes to Pharmaceutical Benefits Scheme (PBS) settings can affect revenue. Sigma has historically experienced volatility around its operational restructures, which may create opportunities for short-term traders but risks for conservative share traders.

Why it’s considered defensive

The need for pharmaceutical supply doesn’t fluctuate heavily with economic cycles, and much of Sigma’s revenue is underpinned by essential healthcare demand. This stability gives it defensive characteristics, even though operational updates and regulatory shifts can create price swings that attract CFD traders as well.

4. Brambles Limited (ASX: BXB)

Industry: Transportation

Market cap: A$31.65 billion⁹

Brambles is a global logistics company best known for its CHEP pallet pooling business. Its pallets and containers are used to transport goods for supermarkets, consumer goods manufacturers, healthcare companies and industrial suppliers. Because these industries operate continuously, and often supply essential products, demand for Brambles’ services stays relatively stable.

CHEP’s recurring, rental-based model provides steady revenue, as clients pay to use pallets as part of long-term supply chain agreements. This model helps smooth earnings and reduces the impact of short-term economic shifts.

The company does face expense pressures, especially around lumber prices, transport costs and equipment replacement. Currency movements can affect earnings since Brambles operates globally. Although demand is resilient, disruptions in global supply chains (like during pandemics or trade disputes) can temporarily impact operations. These factors may introduce moderate volatility, making it interesting for both share traders and traders.

Why it’s considered defensive

Because Brambles supports the movement of essential goods – groceries, medical supplies, household items – its services remain in demand through all phases of the economic cycle. Its long-term contracts, recurring revenue and essential role in global supply chains give it strong defensive characteristics.

5. Telstra Group Limited (ASX: TLS)

Industry: Communications

Market cap: A$55.27 billion¹⁰

Telstra is Australia’s largest telecommunications provider, offering mobile, broadband, fixed-line and enterprise network services. Telecom services are essential for both businesses and households, meaning demand remains stable even when consumers cut back in other areas. This reliable demand makes Telstra one of the classic defensive stocks on the ASX.

Telstra has a massive national infrastructure footprint and continues to invest heavily in 5G, Internet of Things (IoT) and network modernisation. Its scale gives it operational advantages and deep market penetration. Telstra’s mobile segment, in particular, provides consistent, subscription-based revenue that smooths earnings across the year.

Having said that, telecommunications pricing and regulation can affect margins. Competitive pressures from rivals like Optus and Vodafone can lead to pricing and churn challenges. While earnings are fairly steady, Telstra’s share price can still move based on regulatory news, network issues or major competitive shifts.

Why it’s considered defensive

Telecommunications is an essential service, and most households prioritise their phone and internet bills over discretionary purchases. Telstra’s huge scale, subscription-driven revenue and stable cash flows mean its performance is far less volatile than companies tied to consumer sentiment.

How to trade ASX defensive shares with IG AU

CFDs

1. Open a CFD trading account with IG AU
2. Search for ASX defensive shares on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Share trading

1. Open a share trading account with IG AU
2. Search for ASX defensive shares
3. Choose the shares you want to buy
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about defensive shares

Footnotes
 

1. TradingView, November 2025
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