Here’s how investors can make money in 2022, according to one asset manager

Published Tue, Apr 19 202211:03 PM EDTUpdated Mon, Apr 25 202211:22 AM EDT

Investing in the current environment may be daunting, but asset manager Richard-Mark Dodds believes people can still make money — and reveals the stocks he thinks they should own. The global economy has been slammed by a string of troubling macro factors this year. The Federal Reserve lifted its benchmark interest rate for the first time since 2018 and indicated that more rate hikes are on the way as it seeks to temper runaway inflation. Meanwhile, surging energy prices and geopolitical tensions have compounded market volatility, while recent movements in U.S. Treasury yields suggests a recession could be on the way. These "significant headwinds" could create "room for disappointment" as the first quarter reporting season kicks off in earnest, Dodds, chief investment officer at Swiss-based asset management firm Pure Value Metrics, told CNBC on Tuesday. Dodds said that although he is optimistic that equity investor could continue to achieve returns in 2022, these opportunities will not come from the same sectors as in the past two or three years. Instead, Dodds suggested defensive sectors such as commodities, insurance, and health care. In particular, he believes commodities producers are "most robust" in terms of strong cash flows, "raising and rising" dividends and very low debt levels. Top stocks Dodds said commodity stocks currently make up 20% of his portfolio — the most allowed for any one sector. But he added: "To be honest, if we didn't have that cap, I would like to have more." Read more Goldman Sachs names its top global chip stocks — including one it says has an upside over 60% Within this space, Dodds likes Rio Tinto , the world's second-largest iron ore producer. In the asset manager's first-quarter investment report, he highlighted that Rio Tinto's dividend yield of 7% looks "secure," given the company's low cost of production and strong balance sheet. The asset manager also likes global mining company BHP . The company pays a "remarkably high" annual dividend yield of 7 % , according to Dodds, and mines two key ingredients — copper and nickel — that are used in the production of electric vehicles.

Commodity stocks have benefited against the backdrop of rising prices. The sector has been one of the best performing sectors in a volatile market.

Jung Getty | Moment | Getty Images

Investing in the current environment may be daunting, but asset manager Richard-Mark Dodds believes people can still make money — and reveals the stocks he thinks they should own.

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