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As investors gauge how President-elect Donald Trump's second term in office will impact markets, Janus Henderson Investors Global Alpha Equity Team portfolio manager Julian McManus joins Seana Smith and Josh Lipton on Market Domination to discuss how to build a portfolio that's resilient to market volatility.
"Volatility and resilience are keywords that investors need to have in mind when they construct portfolios," Henderson says, adding, "I think we're just endemically heading into what is going to be a higher volatility regime, I think, for the next year or so, we can expect higher volatility around what policymakers do and the way that currencies and risk assets react to that."
The portfolio manager shares two steps for "very thoughtful portfolio construction." He outlines, "First of all, isolating stock selection as the source of risk. So, we want idiosyncratic risk or stock-specific risk to be driving returns."
"Secondly, I think a thoughtful approach to risk on a go-forward basis. So, thinking through the major risks facing the portfolio and picking stocks that can be resilient in the face of that."
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McManus highlights defense stocks (XAR) in the US and globally, as well as sectors like telecommunications (XLC) and utilities (XLU), as opportunities for investors to find resilience amid volatility.
Watch the video above to learn about the portfolio manager's market expectations for Trump's second term.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
This post was written by Naomi Buchanan.