A defensive business is one whose profits are not particularly sensitive to economic conditions; the opposite of a cyclical business.

Examples of defensive business include tobacco, pharmaceuticals and food retailers. Defensives tend to be those companies that sell essentials that people (or companies) cannot easily cut back on when money is tight.

Investing in defensives reduces (or even avoids) losses if the economy does worse than the market expects. It misses opportunities if the economy does better than expected.