5 ASX shares to ride out the 2022 volatility: expert

What are the ‘reliables’ that one can lean on right now?

| More on:
Target circle going down on a rollercoaster, symbolising volatility.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors have experienced much volatility already in 2022, and many experts predict the rest of the year won’t be much smoother.

WAM Leaders Ltd (ASX: WLE) portfolio manager John Ayoub reckons portfolios are currently in “a game of 3D chess” at the moment.

“I say that because we are juggling rate movements, we are juggling coronavirus and now we are juggling more on Ukraine and Russia,” he told a conference call to clients this month.

“From that perspective, it makes it awfully difficult to get a clear and confident path as to the shape of the portfolio for the next month, let alone for the next 6 to 12 months.”

To combat the uncertainty, Ayoub is currently looking for very specific attributes in ASX shares he’ll purchase.

“Two clear characteristics that the portfolio is now demonstrating a lot more than previously [are] quality and defensive earnings attributes,” he said.

“That’s really where we see our safe haven within the portfolio to ride out this volatility over the next little while.”

The fab 5 to hold onto this year

Ayoub named 5 specific ASX shares that his fund has added recently that meet this “safe haven” definition:

The fund manager said his team has been taking advantage of a “dislocation in the market”.

“We see their earnings, their ability to withstand the volatility of global events, particularly in the short-to-medium-term, as key drivers within the portfolio.”

The 5 companies include merchants that provide staple products and those that will see a growth in activity and earnings regardless of interest rate rises.

“Staples [and] inflation beneficiaries are the areas of the portfolio which have become more present and more prominent,” he said.

“We are at the coalface daily and managing risk and adapting as we get new information. That is what we are really focused on right now.”

WAM Leaders itself has gained 2% this year so far to trade at $1.52 on Thursday afternoon. As of the end of February, the listed investment company was trading at a 3.4% premium to net tangible assets.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

two children squat down in the dirt with gardening tools and a watering can wearing denim overalls and smiling very sweetly.
Consumer Staples & Discretionary Shares

‘Back to a growth mindset’: Expert names ASX share ready to take off

In just two years this business overcame devastation and is now ready to grow again, reckons this fund manager.

Read more »

A doctor appears shocked as he looks through binoculars on a blue background.
Broker Notes

Goldman Sachs gives its verdict on the CSL share price

Where next for CSL's shares?

Read more »

A man in a business suit scratches his head looking at a graph that started high then dips, then starts to go up again like a rollercoaster.
Dividend Investing

‘Misunderstood’: Expert names dividend ASX share to buy now at price dip

Reliable income producers aren't easy to find. Here's a stock that is cheap enough to pick up at the moment…

Read more »

A business woman looks unhappy while she flies a red flag at her laptop.
BNPL shares

Top broker warns that the Zip share price could sink 43%

Are Zip's shares heading lower from here?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank representing bank dividends and in particular the CBA dividend
Bank Shares

Is the CBA share price a buy after the bank’s FY22 results?

Is now a good time to buy CBA's shares?

Read more »

Three people run in a race through deep mud and puddles of water.
Investing Strategies

3 rising ASX shares to buy that have passed the bottom: expert

Grab these recovering stocks before they become even more expensive, says Michael Gable.

Read more »

Happy couple at Bank ATM machine.
Bank Shares

Is the Bank of Queensland share price a smart ASX 200 bank buy?

Is this regional bank an underrated pick in the sector?

Read more »

A man looks sadly away from his computer screen as he holds a slice of pizza in his hand with an open pizza box in front of him on his desk.
Consumer Staples & Discretionary Shares

Is it a problem for shareholders that Italians don’t like Domino’s Pizza?

The pizza chain appears to have fizzled out in Italy.

Read more »