Constructing a Defensive Portfolio with T-bills and These 15 Stocks for April 2026
Rationale for a bundle of: ADYEN, XYZ, ETR:ZAL, BVMF:CEAB3, DTRUY, VLVLY, CRM, SAP, HUBS, AMZN, META, ORCL, BKNG, ABNB, LOGI
Originally published on ThinkValue.co
Structure:
50% 1-year US Treasury Bills around a gross 3.5% yield.
10% S&P 500 low-cost ETF of choice
15 stocks (2.7% equal weight): ADYEN, XYZ, ETR:ZAL, BVMF:CEAB3, DTRUY, VLVLY, CRM, SAP, HUBS, AMZN, META, ORCL, BKNG, ABNB, LOGI.
Big Picture Overview
Despite the valuation attractiveness on the market, many investors are still in “watch and see” mode, scanning for signals of future predictability before they can deploy more capital. Risk is high and the general trajectory of the macro environment has been one of escalation since 2022.
There are a few major risk factors that are keeping a lid on investing at the moment:
Energy supply (not just price) shocks due to the war with Iran
The ongoing war in Ukraine, blocking energy flows in Europe
The U.S. deficit spiral
The potential Asian Theater
AI-driven reorganizations
The uncertainty around these questions is what is holding back capital, and any move on the issues is going to directly affect markets.
Most of the issues are obvious but I will try to bring some nuance to the AI reorganizations: my assumption is that companies went into reorganization under the pretext of AI disruption for two reasons:
Cost cutting justification became much easier, and it was generally necessary in the economic environment.
Many companies already had the need to unbundle procurement from software vendors, and in-house solutions got re-framed from high-risk pitches to FOMO drivers for management. That is, pitching an in-house implementation would open you up to taking blame for any project going wrong and an implication of failure at opportunity cost planning in an org., but now, we are off to the races and the same ideas are encouraged while managers retain the plausible deniability of everyone “else is doing it”.
Because of this, organizations will shrink (some will rehire), and it gives procurement the leverage to negotiate software vendor pricing.
Now, because World Governments (starting with the U.S.) are at the limit of their debt capacity, any escalation in the other mentioned risk factors will lead to more inflation. If you can’t borrow more, one of the ways out is printing. This leaves people with depressed purchasing power but since the debt is denominated in absolute terms (USD, not a % of something), it is one way to settle accounts. The other way is (partly) defaulting. The better version of this is refinancing at lower rates, which is what the current U.S. administration is hoping for, hence why Trump is maximizing the bully pulpit to force the FED to lower rates -- This isn’t completely up to the FED, but they can serve as a trigger.
The choice between inflation and default is the choice to punish working people (Main St) vs asset holders (Wall St). Historically, the government has punished the people for its failings, but there is a non-zero chance that the burden is shared differently this time. This is also one risk-factor to my proposed portfolio construction. The yield we see on a coupon is not only an indication of gain but also an indication of risk based on the assumption that U.S. Treasuries are fairly valued with an Aa1 (AA+) rating.
Portfolio Rationale
Now that the stage is set, let’s construct a portfolio with a specific goals: geo-diversified, incumbent-disruptor groups, with a defensive emphasis.
Bonds are a key factor in this portfolio, and serve as a short-term cash repository for investors that are leaning on the side of capital loss avoidance with the option to redeploy on a 1-year basis. Any macro shocks will cause inflationary disruptions, but holding T-bills will allow investors to lose less money than holding cash alone. This is not an investment gain approach, it is a protective one. Bonds will likely keep underperforming, but stocks and cash may underperform more in the next 12 months - Keep in mind that this has not been the case even in the last two downcycles (2020, 2022). Note, if you are an aggressive PM in this situation, you may want to swap the bills allocation with precious metals/commodities, but this implies a deterioration of the situation, not just elevated risk levels.
Bonds to Equity = 40% to 60%, I am proposing a 50% allocation of 1-year US treasury hold-to-maturity bills yielding between 3.5% to 4% depending on available bids. Index = 10% any low cost S&P 500 ETF. Individual companies = 15 (40%), diversified, but allows for alpha.
Stock Pitches
Adyen (ADYEN), Block (XYZ): US-EU payment terminal processor pair. Intended to complement each other across markets and reduce the risk of a single company taking the lead. Banking-like optionality in Block’s Cash App that provides an easy way for retail customers to transfer money.
Daimler Truck Holding AG (DTRUY), AB Volvo (VLVLY): Truck/bus, commercial freight vehicle producers. Less disruption risk from cheap vehicles, heavier capital intensity business. Tesla’s Semi news has toned down, indicating difficulties with this vehicle category, ceding resilience for traditional freight vehicles.
Zalando (ETR:ZAL), C&A Modas S.A. (BVMF:CEAB3): Fast-fashion stock pair, LATAM and EU exposure. C&A is semi-vertically integrated, while Zalando is the e-comm disruptor. Shopping as a psychological release valve and decent social status signal - as opposed to alternative eco signals. C&A is my personal bias as I like the price to quality mix of the clothes, 70% of their manufacturing comes from Bangladesh, China and Turkey.
Salesforce (CRM), SAP (SAP), Hubspot (HUBS): ERP and sales software providers. SAP and CRM hold the majority of enterprise-level customers, while HUBS is targeting SMBs but moving up in the ladder of business customers. All 3 companies have seen an erasure of forward premiums; However, their complex software makes them resilient to AI disruption.
Amazon (AMZN), Meta (META), Oracle (ORCL): Mass market B2B and B2C hyperscalers oversold on AI fears. META and ORCL are a social media pair capturing most of the world audience with Facebook, Instagram, WhatsApp, and TikTok infrastructure. ORCL and AMZN some of the largest datacenter providers, currently trading at attractive valuations, and away from Microsoft’s ChatGPT risks e.g. capturing casual use with the extrapolation that it will translate to seat-based pricing.
Booking (BKNG), AirBnB (ABNB): Travel discovery and booking pair. Attempts to disrupt their business such as Google Travel have largely failed (no, we are not vibing a competitor here) and the companies remain the go-to destination for retail and business travelers. The industry itself is cyclical and people that skip travelling for one year tend to compensate later.
Logitech (LOGI): PC hardware peripherals for commercial and retail customers. Low risk, fair value, EU exposure.
The companies and rationale I am pitching are meant to offer a combination that minimizes exposure to hot sectors, divide the investment risk between regions, as well as try to capture businesses with staying power and their disruptor counter-parts. You can add or change to this portfolio any way you see fit, but I expressly stayed away from sectors like semiconductors, energy, and popular stocks.
The portfolio’s gross target is 11%, that is the goal and depending on your tax jurisdiction and a 27.5% capital gain should net 8% excluding transaction costs. This means that should the portfolio attain its goal by the end of the year, investors may want to consider treating it as a single asset and evaluate its risk structure as such, not tweak individual positions.
Past names coverage references:
Finally, I want to end with this: there are probabalistic factors and causal factors. When using probablistic factors, decisions aren’t evaluated by their results alone - chance still plays a role. When you have a causal factor, decisions are only evaluated by their result. Don’t mix the two. You can’t invest defensively and secretly expect to outperform the S&P 500.
Any corrections or insightful comments will be published as an edit on the original post. Reach me at support@thinkvalue.co