When it comes to investing in ASX shares, I try to be as optimistic as possible. That’s not just blind optimism. Statistically, it makes sense to be optimistic when investing in stocks or ASX exchange-traded funds (ETFs). The markets have historically gone up far more often than they go down. Plus, the S&P/ASX 200 Index (ASX: XJO) has never failed to exceed its previous all-time high, as we’ve seen many times in 2026.

Saying that, there are more than a few reasons to feel less-than-optimistic about the current state of the global economy. Inflation remains uncomfortably high across the world’s advanced economies. Interest rates have been ticking up and look likely to continue to do so. And adding literal fuel to the fire, oil prices have been surging higher over the past week, crossing US$100 a barrel. They could well hit US$110 a barrel if the current trajectory continues.

Now, if these factors result in a recession or stock market crash, my investing strategy won’t be changing. I’ll continue to buy high-quality companies at prices that make sense, and hold for the long term. But many investors don’t have that luxury. Many, particularly retirees and income investors, rely on their ASX shares and ETFs for their retirement income. These investors may struggle to cope, either psychologically or financially, if the markets take a tumble tomorrow.

If that’s you, you may wish to consider investing in what I think is one of the most defensive ETFs on the ASX. This ETF is none other than the iShares Global Consumer Staples ETF (ASX: IXI).

A defensive ASX ETF

This fund does pretty much what it says on the tin. It invests in an underlying portfolio of shares that are all leaders in the global consumer staples sector. Consumer staples are goods we tend to need to buy, rather than ones we purchase when we’re flush with cash or in the mood to splash out. They include food, drinks, and household essentials, as well as tobacco and alcohol products.

The beauty of these products as an investment comes from their very nature as staples. Even if times get tough and we have to collectively tighten our belts, we still need to eat, drink, and stock our households with life’s essentials. That makes the companies that manufacture and sell these goods very stable, predictable investments. Just consider some of the iShares Global Consumer Staples ETF’s holdings. They include Coca-Cola, Walmart, PepsiCo, Unilever, Costco Wholesale, Philip Morris International, Nestle, Monster Beverage, Colgate-Palmolive, and Procter & Gamble. Even our own Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) are included.

These companies are some of the world’s most resilient, defensive businesses. They either manufacture goods that people will buy, rain, hail, or shine, or else provide an easy place to buy those goods. That makes them incredibly resistant to both economic slowdowns and inflation.

So if you’re an investor who is looking at the state of the global economy with concern, this might be an appropriate ASX ETF to consider for your portfolio.

The post This ASX ETF could help protect your portfolio appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Coca-Cola, Costco Wholesale, PepsiCo, Philip Morris International, Procter & Gamble, and Unilever. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Colgate-Palmolive, Costco Wholesale, Monster Beverage, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nestlé, Philip Morris International, and Unilever. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been a brutal 12 months for DroneShield Ltd (ASX: DRO) shares.

The DroneShield share price is down another 1.09% to $1.59 today and is now sitting around its 52-week low.

The stock has fallen more than 50% over the past year and almost 49% in 2026.

But at this price, I think the risk-reward is becoming much more interesting.

I certainly wouldn’t make DroneShield one of my biggest holdings. But as part of a diversified portfolio, I’d be happy to buy some shares around these levels.

Here’s why.

The demand is there

The biggest reason I remain bullish is simple. Drones aren’t going away.

They are playing a bigger role in modern warfare, border security and the protection of critical infrastructure.

That means governments and defence customers need systems that can detect, track and stop them.

DroneShield is already turning that demand into revenue.

Its latest update showed FY26 committed revenue had reached $251 million, while another $46 million was committed for FY27 and beyond.

First-half revenue jumped 74% to $125.8 million, and recurring revenue climbed 229% to $11.5 million.

The company has also received its first order for the new RfRecon product from an existing Western European military customer.

To me, that is exactly what I want to see. If those orders keep building, I think the current share price could end up looking pretty cheap.

Could short sellers send the shares higher?

This is another part of the setup I find very interesting.

The latest short-selling data shows 15.46% of DroneShield shares are currently sold short, making it the second-most shorted stock on the ASX.

That’s a huge number of investors betting against the company.

Of course, short interest is there for a reason. DroneShield is still loss-making, with first-half underlying EBITDA of $12.4 million in the red and a statutory loss of $32.2 million.

But keep in mind, heavy short interest can work both ways.

If DroneShield announces a large new contract, some short sellers may decide they no longer want to stay in the trade.

Buying shares back to close those positions could add extra demand at the same time other investors are buying the news.

And with short interest this high, I think a genuinely good announcement could send the share price higher very quickly.

Would I buy today?

At $1.59, I would.

TipRanks shows 4 ranked analysts covering the stock, with 2 buys and 2 sells. The average 12-month price target is $1.98, about 25% above the current price.

Bell Potter sits at $2.40 and Canaccord Genuity at $2.60.

Yes, there are still plenty of risks, particularly around profitability, margins and execution.

That is why I’d keep the position relatively small.

But I think the potential upside makes the risk worthwhile.

The post DroneShield shares have crashed 51% in a year. Here’s why I’d buy them today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Santos Ltd (ASX: STO) shares closed at a fresh multi-year high of $8.70 on Monday afternoon.

The shares have slid around 1.5% in lunchtime trade today, to $8.60 a piece. But even after today’s decline, they’re still up 40% for the year-to-date and are 12% higher than a year ago.

Why are Santos shares flying higher in 2026?

The ASX energy shares have jumped higher in 2026 off the back of ongoing conflict between the US and Iran. Volatility in the region has fuelled significant concerns about tighter global oil supply and rising prices.

Santos shares spiked in February and March, around the time news first broke that conflict had escalated between the two nations. The shares continued climbing in value as the war heated up.

They cooled again in June off the back of news that the two nations could soon reach a peace agreement, but strikes recently resumed, throwing the market back into chaos and creating a strong tailwind for Santos.

According to the latest update and data from Trading Economics, Saudi Arabia’s East-West pipeline, which provides an alternative oil shipping route to the Strait of Hormuz, continues to remain shut following recent drone attacks. 

Meanwhile, a meeting between Iran and the Gulf Arab states to discuss Hormuz has also been postponed.

The price of crude oil has now jumped to around US$103 per barrel at the time of writing, a 22% increase over the past months alone. 

And it looks like prices could keep climbing higher still. 

Investment bank Goldman Sachs said they think crude oil could rise above US$120 if production stays well below pre-conflict levels. The bank estimates average output next year could still be around 4 million barrels per day below pre-war levels.

If oil stays above US$100 a barrel, oil and gas giants like Santos could benefit from higher realised prices.

Santos’ share price rally has also been supported by its strong half-year FY26 results announcement, which it posted last month.

The company reported a 2% year-on-year increase in sales revenue and a 1.7% increase in production volumes. The company also generated free cash flow from operations, driven by strong base business performance.

Can Santos shares keep climbing higher?

The oil and gas business is well placed to keep increasing its production in the coming reporting periods, which could help boost its earnings for FY27.

The experts are bullish about the outlook for Santos shares over the next 12 months, too.

Market Index data shows that all brokers have a strong buy rating on the stock. But after the latest rally, the $8.57 average target price is practically flat against the $8.60 target price at the time of writing.

Sentiment is also very positive on TradingView. Out of 15 analysts, 13 have a buy/strong buy rating on Santos shares. Meanwhile, one analyst rates it a hold, and one rates the energy share a sell. 

The average $8.95 target price implies a potential 4% upside ahead, at the time of writing. But some expect the shares to jump around 25% to $10.68 within the next 12 months.

The post Santos shares slide from fresh multi-year high: What’s next for the ASX energy stock? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.