Market GPS 2019 Logo White | Janus Henderson Investors

With numerous uncertainties present in the global economy, market participants may be looking for meaningful signals about what’s to come in 2019. In our semiannual assessment on the state of the markets, Janus Henderson’s investment teams weigh in on the themes that could dominate in the months ahead and the potential impact for investors.

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At Janus Henderson, we use our detailed fundamental research and deep understanding of companies and sectors to drive investment decisions. Although we avoid far-reaching macroeconomic calls, we think it is important to consider near-term signals. To that end, Market GPS 2019 explores what our investment teams are seeing from the ground up and where we are identifying the most compelling opportunities across asset classes. While many variants are likely to set the direction of markets in the new year, we highlight four key themes to watch:

Disruption Theme Icon | Janus Henderson Investors

Disruptive Forces

The pace of change is greater than ever before. Disruption is being felt across industries and geographies and is proving a differentiator in the long-term performance of investors’ portfolios. There are exciting opportunities, but also significant risks for the “disrupted.” We believe health care and technology are among the key sectors to focus on when considering disruption.

Divergence Theme Icon | Janus Henderson Investors

Market Divergence

We expect returns among asset classes, currencies, countries and sectors to continue to diverge, driven by myriad factors: the fading of central bank synchronization as few regions follow the U.S. pace of tightening; typical late-cycle behavior leading to more volatility and idiosyncratic risk; and fundamentals once again determining asset prices. We believe active management is the best way to confront these challenges.

Geopolitical Theme Icon | Janus Henderson Investors

Geopolitical Tensions

Trade disputes and the subsequent reactions, the outcome of Brexit and developments in Italy all have the capacity to significantly reroute markets. These known unknowns will no doubt be accompanied by challenges not yet on the radar. We believe these conditions require investors to be nimble and flexible as they seek to capitalize on potential opportunities and to navigate the potential fallouts.

Emerging Market Theme Icon | Janus Henderson Investors

Emerging Markets

It will remain important to balance the benefits of the strong underlying investment drivers of emerging market growth with the likely ongoing elevated levels of volatility and dispersions of returns. We believe that this will make it imperative to know what you own, be confident in management and follow bottom-up analysis and compelling themes rather than following the index.

Jonathan Coleman | Market GPS 2019 | Janus Henderson Investors

Sticking with Quality in Small Caps

Portfolio Manager Jonathan Coleman says uncertainties are mounting about the strength of the global economy in 2019, making it all the more important for small-cap investors to look for companies with sound management teams, low debt levels and other high-quality traits.

Brian Demain | Market GPS 2019 | Janus Henderson Investors

Navigating Market Volatility

Rising interest rates and global trade tensions could lead to increased market volatility in 2019, says Portfolio Manager Brian Demain, making a disciplined investment process focused on high-quality growth all the more important.

Doug Rao | Market GPS 2019 | Janus Henderson Investors

Staying Focused on Secular Growth

As interest rates and inflation pressures climb, Portfolio Manager Doug Rao says it is becoming all the more important to focus on companies with secular tailwinds, pricing power and competitive advantages.

Glen Finegan | Market GPS 2019 | Janus Henderson Investors

Selective opportunities in less popular markets

Glen Finegan, Head of the Global Emerging Market Equities team, discusses his team’s focus on long-term demographics, regional valuations and management styles, analyzing their potential impact on emerging markets in the year ahead.

George Maris | Market GPS 2019 | Janus Henderson Investors

Volatility Creates Attractive Entry Points in Advantaged Companies

George Maris, Co-Head of Equities – Americas, discusses how the pace of inflation could shape the economic landscape and markets in 2019 and why investors must exercise prudent security selection as volatility climbs to historical levels.

Ian Warmerdam | Market GPS 2019 | Janus Henderson Investors

Focus on Predictable Long-Term Trends

Ian Warmerdam, Head of the Edinburgh-based Global Equities Team, believes that in 2019 and beyond investors should focus on companies with fundamental resilience and that are operating in end markets with long-term secular growth.

Carmel Wellso | Market GPS 2019 | Janus Henderson Investors

Inflation Pressures on the Rise

Although trade tensions have made headlines, Portfolio Manager Carmel Wellso argues an uptick in inflation and rising interest rates could have the biggest impact on the global economy in 2019, potentially leading to more volatility in equity markets.

Darrell Watters | Market GPS 2019 | Janus Henderson Investors

Mitigating Risk as Cracks in the Credit Cycle Emerge

Head of Fundamental Fixed Income Darrell Watters highlights the importance of mitigating downside risk as the credit cycle continues to progress in 2019.

Ash Alankar | Market GPS 2019 | Janus Henderson Investors

Real Rates Set to Rise, But at What Pace?

Head of Global Asset Allocation Ashwin Alankar considers rising real interest rates to be a key theme for markets and the economy in 2019 as the Fed’s normalization program possibly reaches its final stretch.

John Fujiwara | Market GPS 2019 | Janus Henderson Investors

Low Liquidity Casts Shadow over Volatile Markets

John Fujiwara, Portfolio Manager on the, Diversified Alternatives team, explains why the combination of inflation and illiquidity could upset markets in 2019 and why many high-beta strategies may be at risk in markets where higher volatility and lower correlations are the norm.