NEW YORK (Reuters) -Janus Henderson, which manages $379 billion in assets, is advising investors to cut stock holdings and buy more investment-grade sovereign bonds as tariffs threaten to slow global growth, a fund manager said.

Janus Henderson now recommends a portfolio of 55% equities and 45% bonds, compared with its call at the start of the year for 62% equities and 38% bonds, Adam Hetts, global head of multi-asset at Janus, told Reuters.

"We don't think this is the environment that clients want to buy the dip quite yet, because there could still be more downside," Hetts said. He cited a negative scenario of "the 10% baseline, the tariffs on autos, aggressive counter tariffs and trade war-style escalation with China and Europe." 

His base case is for a market selloff and the potential for bearish and recessionary cases to take hold.

The stock market could go from a disorderly selloff to a more orderly selloff because the recession risk "is much, much higher" than it was a couple of weeks ago, Hetts added.

Wall Street's main indexes extended declines in afternoon trading on Thursday, with the benchmark S&P 500 down more than 5%, as investors worried about the economic damage from U.S. tariff policies.

The slump reversed a Wednesday rally after President Donald Trump declared a 90-day tariff pause for many countries but raised the levy on imports from China to 125%.

"We've gone to an equity underweight in the portfolios," Hetts said, more neutral on U.S. assets and slightly underweight on international investments.

"We're headed towards a tariff-induced global slowdown right now in the very short term. Europe and China could have potentially more downside than the U.S., but coming out of that, that might be the place to go," he said.

He cited fiscal stimulus in the wake of Germany's elections, potential resolution of the Ukraine-Russia conflict and fiscal stimulus in China as factors that may be catalysts for recoveries in Europe and China.

"There are these potential upside catalysts in Europe which was much cheaper as a starting point than the U.S. and then China's been committed to fiscal stimulus and we think that's a story that will play out for quarters to come," he said.

For now, investors should allocate more funds to high-grade sovereign bonds to preserve capital, Hetts said.

"When we're looking to de-risk... we're looking at investment grade sovereigns, and less so credit because we're also seeing volatility in credit," he said.