“A prime example is the pharmaceutical sector, where several hundred small companies are slowly expiring into bankruptcy,” McCallum said. “The 20 major groups worth more than US$20 billion will be able to cherry pick. Investors should remain focussed on industry leaders with strong franchises, good free cash flow and attractive valuations. Market share will gravitate to those that already dominate their industry.”

McCallum nominated Pfizer as one pharma giant to watch in regards to this theme. Bedlam, whose concentrated
process has one Australian client in Perpetual’s WealthFocus multimanager trust, is also favouring companies with sustainable dividend yields – telcos are seen as the most reliable suppliers of this once-forgotten source of return –
and those exposed to “real assets”.

As central banks fire up their printers and debase the value of paper money, McCallum said that any “real asset” whose supply could not be increased at the same pace as money would benefit. Agriculture, precious metals such as gold and selective Asian property markets such as Japan and Hong Kong all fitted the bill, McCallum said.