We all want to beat the S&P/ASX 200 (INDEXASX: XJO), right?

Of course! It’s the benchmark against which almost all investment worldly comparisons are made. It also happens to be down 16% in the last 12 months. And it turns out there has been a pretty simple way to beat the S&P/ASX 200 (INDEXASX: XJO) over that time; avoid financial stocks.

Financial stocks make up 46% of the ASX200 and as a sector it (financials) has plummeted 25% in the last 12 months. We can blame this largely on the banks which have been hammered after capital raisings and investor fears of growing bad debts from lending to everything from energy and resource companies, or residential property.

Commonwealth Bank of Australia (ASX: CBA) is down 22% in the last year, while National Australia Bank Ltd.  (ASX: NAB) is down 34%.

Where to invest instead

Taking financials out, there are two market sectors which are, by comparison, alive and kicking; healthcare and Information Technology.

At current prices, my top picks from each sector are:

In particular for blood product company CSL, I like the consistent revenue growth, high margins and regular reinvestment in R&D which keeps the company growing. Between 2010 and 2014 the company’s earnings per share (eps) compounded at an exceptional rate of 11.5% per year.

The Info Tech index has relatively few constituents, but my preferred among them is iSentia Group Ltd (ASX: ISD), which gathers and analyses data from media sources on behalf of companies. I like iSentia’s unique offering in a fast-growing niche. The company is forecasting revenue growth of up to 24% in the 2016 financial year.

Foolish takeaway

Although the financial sector is attractive for its low earnings ratios and high (trailing) dividend yields, investors really wanting to smash the S&P/ASX 200 should consider venturing towards some of the smart, growing tech and healthcare companies.

Start now! Discover the 'new breed' of blue chips that could take your portfolio higher in 2016

Forget BHP and Woolworths. These 3 "new breed" top blue chips for 2016 pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Regan Pearson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.