16 Best Sector Funds to Invest in Now

Jump on a trend or fine-tune your portfolio strategy with these targeted industry plays.

(Image credit: iStock)

Look at the stock fund performance rankings for almost any time frame—one year, 10 years or any calendar year—and a handful of sector funds, which concentrate on a single industry or slice of the economy, will pepper the top of the list. In 2019, for instance, seven sector funds—including Fidelity Select Semiconductors, with a 64.5% return—ranked among the 10 best-performing stock mutual funds. Over the 12 months ending in mid September, sector-focused exchange-traded funds did even better, taking all top 10 spots.

These targeted bets can be good additions to your portfolio. Sector funds allow you to invest in a long-term growth trend—renewable energy, say, or genome-related health therapies—without having to shoulder as much stock-specific risk as you would by buying shares in individual companies.

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Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.