Consider the iShares U.S. Real Estate ETF, which holds developers and property managers like Simon Property Group Inc, American Tower Corp and Public Storage. The fund was up only 1 percent last year, but yields nearly 4 percent. It charges 0.46 percent for annual expenses.
Materials Make Sense
The materials sector was the most unloved group among the Standard & Poor's industry sectors last year, gaining less than 3 percent for the year through January 10. A highly-cyclical basket of metals, chemical, mining and paper stocks, this cadre tends to do best during mature economic cycles.
But laggards can become leaders if U.S. economic growth - pegged at more than four percent in the 3rd quarter - continues.
The Materials Select Sector SPDR owns stocks like Monsanto, Dow Chemical Co and Freeport McMoRan Copper and Gold. The SPDR charges 0.18 percent for annual management expenses and outperformed the materials sector as a whole, gaining 26 percent last year.
Energy Surge
Energy was another lackluster sector last year, returning a modest 10 percent for the year ending January 10, compared to the best-performing technology group, which gained 56 percent. Improving demand for energy globally bodes well for companies that produce oil and natural gas, though.
The Vanguard Energy ETF owns leading producers and service companies such as ExxonMobil Corp, Chevron Corp and Schlumberger NV. The fund charges 0.14 percent for annual expenses and returned 26 percent last year.
Utilities Still Defensive
Companies that produce or distribute power, natural gas and water seldom light up any investor's radar screen during bull rallies. These high-dividend companies only become alluring when investors retreat from the most popular sector of the moment or there's widespread uncertainty.