Stock Picks Amid Market Volatility: 7 Resilient Choices from Julian McManus

As the financial landscape continues to be shaped by the actions of the Trump administration, market volatility has considerably increased this year. In a recent discussion, Julian McManus, a co-manager at Janus Henderson Investors, outlined seven stock picks that offer resilience during these unpredictable times. As Republican investors, we must keep our eyes firm on the fundamentals and the long-term trajectory of our portfolios, even as we navigate through the short-term inflationary pressures.

The Trump Administration’s Tariff Drama

Last week, we saw President Trump delay tariffs on numerous imports—a strategic pivot that has both investors and analysts buzzing. McManus noted that this development underscores a critical lesson: “markets will enforce discipline.” The immediate reaction of the S&P 500, witnessing a drop of 12.1% after Trump’s initial “liberation day” tariffs announcement, vividly illustrated just how sensitive markets are to government actions. However, following the tariff delay announcement, it rebounded by 9.5%, demonstrating the market’s volatility and the complex relationship between economic policies and stock performance.

The drama doesn’t stop there; rising U.S. Treasury yields climbed to a notable 4.49%, highlighting significant market anxiety. McManus pointed out that when tariffs became excessively burdensome, the market “rejected that view of the future.” It’s evident that while Trump has focused on China as a primary adversary, trying to tackle trade battles on multiple fronts proves to be a mistake—one that calls for a more disciplined approach to handling international economic relationships.

Strategic Stock Selections

Through these turbulent times, McManus champions a diversified and resilient portfolio strategy that can weather economic storms. His two funds—the $3.3 billion Janus Henderson Overseas Fund (JIGFX) and the $2.7 billion Janus Henderson Global Select Fund (JORFX)—offer distinct but complementary approaches. Here are the seven stocks he recommends:

Resilient Holdings

• Spotify Technology SA (SPOT) – As a subscription-driven service, Spotify’s user base tends to show resilience even in downturns.
• Deutsche Telekom AG (XE:DTE) – The company benefits from its ownership of T-Mobile US Inc. (TMUS) and a robust telecom market.
• T-Mobile US Inc. (TMUS) – Another example of a strong subscription model that is likely to perform well during economic slowdowns.
• Liberty Media Corp. Series C Liberty Formula One (FWONK) – With a passionate fan base, Formula One stands as a unique asset likely to attract acquisition interest from larger media entities.
• BAE Systems PLC (UK:BA) – A key player in the defense sector, poised to benefit from geopolitical unrest and increasing military spending, particularly in Europe.
• Rheinmetall AG (XE:RHM) – Another defense contractor capitalizing on the rearmament across Europe, making it a prudent addition to any portfolio.
• BYD Co. Ltd (HK:1211) – A frontrunner in the electric vehicle market, particularly in China, with ambitious expansion plans into Europe.

Defensive and Offensive Strategies

McManus emphasizes that a balance of defensive stocks, those that can endure economic hardship, paired with more aggressive investments can yield the best outcomes. While companies like BAE Systems and BYD offer a solid defensive stance, McManus also sees value in investing in well-managed European and Japanese banks, which are currently undervalued compared to their potential. These institutions are not only well-capitalized but also showcase prudent management amidst rising economic uncertainty.

Conclusion

The stock market is undeniably in a state of flux due to ongoing geopolitical tensions and economic volatility affected by Trump’s tariffs. As conservative investors, we must remain vigilant and focused on businesses showing both resilience and growth potential. By following McManus’ stock recommendations and maintaining diversified portfolios, we anchor ourselves in traditional financial wisdom that prioritizes long-term stability over short-term gains.

In turbulent times, a commitment to strategic selection is key to navigating the unpredictable waters of market volatility. Let’s keep our focus and invest wisely for a prosperous future.