What Are the Most Undervalued Sector ETFs?

The U.S. equity market is trading at a lofty 21.56x earnings, which is nearly 40% higher than its historical mean of 15.56×. While record-low interest rates may justify a higher valuation, the Federal Reserve has hinted that an interest rate hike could come as early as next month. This has led to concerns that valuations may be due for a correction over the near-term, especially with positive economic data pointing to a near-term rate hike. In this article, we’ll take a look at the key drivers behind some of these sector valuations, and whether or not investors should dive deeper.