Essential Consumption: Brands & Retail

The thesis

Own the brands and retailers serving recurring grocery, beverage and household needs rather than businesses dependent on AI capital spending. Strong recent performance across these companies supports a defensive rotation thesis, while PepsiCo's 5.4% free-cash-flow yield provides a valuation anchor. Over the coming three months, the basket could outperform QQQ if technology financing concerns persist; a sharp technology rebound or a reversal in defensive valuations is the principal risk.