The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( ETF Expert) -- Although I can’t prove it, 90% of mutual fund managers interviewed on CNBC love energy and technology. They loved the same sectors last year.
And who could blame them? Both sectors are tied to a global economic cycle that has been expanding. What’s more, mutual fund managers are paid to be bullish on stocks.
Worse yet, I can’t say that I haven’t agreed. Some of my largest holdings have been tied to energy and/or emerging market economic expansion. Review my beginning-of-2011 column, “The Economics of Oil Favor Canadian ETFs and Oil Services ETFs.”With that said, there’s one sector that rarely gets talked about on CNBC these days. The sector? Health care. Granted, I’m still not a buyer of the segment. There’s still too much uncertainty with the new legislation as well as the Republican opposition. Moreover, earnings guidance appears less sector-driven and more company driven, making it more difficult to use diversified health care ETFs. Yet I cannot deny that momentum is starting to build for the safer haven, lower profit margin, later-in-the-cycle segment. Nor can I deny that it is one of the very few areas that Morningstar regards as “undervalued.” (Note: I’m not a big fan of undervalued/overvalued nor underbought/overbought.) Nevertheless, take a look at a ”possible” changing of the guard: