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Best Mutual Funds Awards 2026: Best Sector Stock Funds
If you’re evaluating mutual funds for your investment portfolio or retirement account, this list highlights the best sector funds to consider now, based on each fund outperforming the S&P 500 over the past one-, three-, five- and 10-year periods.
Shaded cells in the table below indicate the five best-of-the-best funds based on 10-year performance. Of 268 sector funds at least 10 years old, just 27 of them, or 10%, won awards.
A sector fund invests in a particular sector of the economy — energy or utilities, for example. There are many different types of sector funds, and they can differ significantly in terms of the market capitalization of the stocks they own and their investment objectives (e.g. growth vs. income). Morningstar says of sector funds, “These picks are good for plugging holes or tilting a portfolio toward a certain part of the market.”
For more details, read about how the best mutual funds deliver benchmark-beating returns, and see the full 2026 list of IBD’s Best Mutual Funds in every category, including bond funds, diversified stock funds, blend and index funds.
All returns are as of Dec. 31, 2025.
Best Sector Funds
Sources: IBD, Morningstar Direct
The 2026 Best Mutual Funds logo and accolades are available for licensing through Investor’s Business Daily’s partner, The YGS Group. For more information and ordering, please visit www.IBDlicensing.com or call 800-290-5460.
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