“But they have a bit of growth behind them and they’ve got high cash flow. For us, they are an ideal sector to have in a portfolio.”
Holt said he likes telcos in the U.S. as well as those in Asia, including China. He also believes telecom companies pay big dividends and the sector is one of the best ways to play emerging market growth.
The healthcare sector also appeals to him. “They’ve become very cheap in last decade and they sell for P/E ratios in the high single-digit or early double -digits. (They) still pay big dividend and have big cash flow from large range of drugs.”
Holt said that giant health care firms were very expensive five to 10 years ago, but not anymore. That was partly due to the perception that they lacked growth potential, he explained.
“They have growth strategies in place, they are partnering with nimble emerging market pharmaceuticals to put new drugs out there. They also have a lot of cash, which is very valuable in this environment,” he said.
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