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 indicate the five best-of-the-best funds based on 10-year performance. Of 281 sector funds at least 10 years old, just six of them, or 2%, won awards. And five of the six are focused on tech stocks.
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 2024 list of IBD's Best Mutual Funds in every category, including bond funds, diversified stock funds, blend and index funds, and breakouts of large-cap, midcap and small-cap funds.
All returns are as of Dec. 31, 2023.
Best Sector Funds
| Fund | Symbol | 1-year total return | 3-year average annual return | 5-year average annual return | 10-year average annual return | Morningstar category | Annual report net expense ratio |
|---|---|---|---|---|---|---|---|
| Benchmark: S&P 500 | 26.29 | 10 | 15.69 | 12.03 | |||
| Select Semiconductors | FSELX | 78.14 | 22.5 | 34.21 | 25.53 | US Fund Technology | 0.69 |
| Fidelity Advisor Semiconductors I | FELIX | 75.33 | 21.72 | 33.66 | 25.19 | US Fund Technology | 0.74 |
| Rydex Electronics Inv | RYSIX | 55.69 | 13.4 | 29.59 | 20.84 | US Fund Technology | 1.39 |
| Columbia Seligman Global Tech A | SHGTX | 45.15 | 11.25 | 25.49 | 19.8 | US Fund Technology | 1.3 |
| Columbia Seligman Tech & Info A | SLMCX | 44.22 | 11.27 | 25.07 | 19.64 | US Fund Technology | 1.2 |
| Fidelity Select Construction & Hsg Port | FSHOX | 30.84 | 16.78 | 23.05 | 14.59 | US Fund Consumer Cyclical | 0.76 |
Sources: IBD, Morningstar Direct
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