Four areas that should provide gains despite violent market swings

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A top money manager has four plays to get investors through the volatile market without losing their shirts.

Bryn Mawr Trust chief investment officer Jeffrey Mills is focusing on rate sensitive market groups and one place battered by U.S.-China trade war jitters and global recession fears.

“Rates remain low. I think you get a bid in health care. I think you get a bid in utilities even though they’re expensive, ” he told CNBC’s “Futures Now ” last Thursday. “You still have investors going to tech for growth. And, it’s interesting the momentum there is not in the FANG names. It’s in the semis. It’s in the software. “

Mills’ contrarian call involves the emerging markets, which have been crushed by the slowdown overseas.

“You have to be willing to withstand a little bit of volatility as it relates to EM — obviously, in the crosshairs of the trade war, for sure,” said Mills. “But if you have a long-term time horizon, I do like valuations here. I think it’s a decent entry point.”

Mills, who has $15 billion in assets under management, doesn’t plan to react to Friday’s steep sell-off by meaningfully altering his investment approach. The Dow fell 623 points to 25,628.90 on escalating trade tensions with China.

China announced new tariffs on $75 billion in U.S. goods as a retaliatory move. President Donald Trump tweeted plans to strike back at China Friday by imposing more tariffs. The Dow is now 6% below its all-time high. 

The S&P 500 also struggled. It sank 75 points to close at 2,847, 6% off its record high.

“Incredibly complex”

In a special note to CNBC as the sell-off was gripping the market, Mills suggested President Trump’s tweets sabotaged what was shaping up to be a positive day for stocks.

Mills reiterated that the market backdrop is “incredibly complex.” He added a “wait and see approach” may be the most prudent course for many investors.

But he still believes the U.S. will ultimately avoid a recession and rebound, particularly after Federal Reserve Chairman Jerome Powell indicated at the Jackson Hole Symposium Friday that he’d “act as appropriate to sustain the expansion. ” 

“Powell said exactly what he needed to say. He acknowledged the downside risks to growth,” Mills wrote to CNBC. “He certainly wasn’t going to guarantee additional rate cuts, but he demonstrated flexibility related to the direction of future policy.”

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