Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Technology is no longer the coolest game in town. At least not in Asia, and not for investors.

For the first time in three years, technology has dropped from being the region's most-preferred sector in Credit Suisse's annual investor sentiment survey. That honor now falls to Asia's healthcare stocks. And it's about time.

Asia's Healthy Returns
The region's healthcare stocks have outperformed tech over the past three years
Source: Bloomberg

While technology has outperformed the MSCI Asia Pacific Index over the past three years, healthcare has outshone by far more. MSCI's Asia Pacific Health Care Index has returned almost 30 percent, versus a rise of about 13 percent in the information technology subindex.

Pick a Winner
Tech was the top pick last year in a Credit Suisse survey, and ended up underperforming
Source: Bloomberg

Despite the sector's relegation to third, behind consumer discretionary, in Credit Suisse's survey, investors may still be too bullish.

For one, tech is heavily reliant on new gadgets and new wow factors, and it doesn't look like there's much out there to excite consumers this year. At the same time, emerging markets aren't providing quite the same drive. China is struggling while India's still sorting out radio spectrum needed to help spur growth in smartphones. And while the enterprise side of technology may end up being more robust, driven by a shift to cloud computing, Asia's exposure to that part of the business is relatively low compared with Europe and the U.S.

Tech Too Hot
The MSCI Asia Pacific IT index is the most expensive in three years
Source: Bloomberg

Tech stocks also look expensive. On a price-earnings basis, the region's IT subindex is trading at levels not seen since 2013 -- when it increased 14.7 percent -- while return on equity is low. Neither of those figures seemed severely out of whack in 2015, which is why investors could be forgiven for being overweight 12 months ago, before copping a 4.6 percent decline.

Right now, though, such excuses aren't available. This makes it a good time for investors to understand that their love for tech may be unrequited.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at

To contact the editor responsible for this story:
Katrina Nicholas at