Janus Henderson Investors has warned that investors should remain diversified and fully invested amid continued uncertainty around US economic policy and global market conditions.
In its Q3 Multi-Asset Review, the global asset manager highlighted a lack of clarity on whether US economic resilience and potential fiscal stimulus under President Trump’s proposed “Big Beautiful Bill” will offset pressure from renewed tariff threats. The firm advised maintaining exposure across asset classes and regions, particularly given the absence of clear signals of a material economic downturn.
“Valuations are high, and the global trade framework remains fragile,” said Adam Hetts, Global Head of Multi-Asset, and Oliver Blackbourn, portfolio manager. “Investors should prepare for a wider range of outcomes by reinforcing portfolios through diversification.”
Equities
Janus Henderson flagged that global equity valuations remain stretched, though earnings downgrades have been limited and technology earnings continue to outperform. The outlook for US small-cap stocks has improved with pro-growth policy proposals, but high interest rates remain a drag. European stocks are constrained by valuation, while China continues to offer relative value.
Fixed income
In fixed income, the managers noted that tariff-related policy uncertainty has slowed the Federal Reserve’s rate-cutting plans, contrasting with the European Central Bank’s approach. However, a return to rate cuts remains possible. Securitised debt was highlighted as better suited to current conditions due to its short-duration exposure. Corporate bond spreads remain tight but are supported by the underlying economic data.
Alternatives and currencies
With most major economies nearing late-cycle conditions and stagflation a rising risk, the report argues that traditional hedging strategies using sovereign bonds are insufficient. Investors should consider low-correlation alternative assets to manage downside risk. On currencies, Janus Henderson said the US dollar remains attractive as a safe haven due to its current valuation and interest rate backdrop.
The report comes as investors reassess risk exposure amid policy uncertainty in the US, particularly around tariffs and the timing of any fiscal support. As of August 2025, markets remain sensitive to signs of inflation moderation, with the Federal Reserve expected to hold interest rates steady in the near term.
