The fund sectors consistently performing and the names leading them higher

Current commentary and analysis will often focus on the very best, and worst, performers in stock markets. Which makes sense as people want to know what they might be missing out on or getting caught out by.

What often gets overlooked as a result, are the pockets of the market that aren’t taking that top returns spot, but they are consistently ranking among the strongest performers.

So not the John Lennons or Paul McCartneys of the fund world, but the still highly respected George Harrisons say.

AJ Bell analysed the average total returns of all 102 of the fund and investment trust sectors collectively, across several time frames both near and long-term, to out find which ones held at least a top 20 spot in each period.

What we were looking to find

We deliberately excluded one month data because while we have some shorter time frames included (three and six months), a month is too narrow a window to be meaningful.

Just 16 sectors managed to achieve this consistent top 20 performance. 15 for funds and just one for trusts, the IT Financials & Financial Innovation sector.

Digging a bit deeper, and the IA Technology & Technology Innovation sector maintained the highest average ranking overall in second place, which makes sense given this portion of the market has dominated equity returns for the better part of 20 years.

Funds in this sector will overwhelmingly invest in the likes of Meta, Nvidia's and Amazon’s of the public markets, which are among some of the biggest wealth generators on record. Indeed, it’s come top in four out of the seven periods assessed in this study.

Taking that data, AJ Bell then analysed the performance of all the funds within these 16 sectors to find which ones had delivered top quartile returns across the same time frames: three and six months, year-to-date, one year, three years, five years and 10 years. Doing this allows us to see which funds have outperformed across a multitude of investment cycles and macroeconomic events.

This left us with the top 25% of the sectors where funds were most consistently delivering high returns.

Overall, just 58 funds, or 3%, from a pool of almost 2,360 overall achieved this performance feat.

Banks cashing in

Picking out some key points and the Amundi Euro Stoxx Banks ETF wasn’t just the highest returning fund over three years (217.4%), but it was also the only fund in the IA Financials and Financial Innovation sector to make the final list.

This passive fund is designed to track the performance of 29 major European banks, such as Banco Santander SA, BNP Paribas and Societe Generale.

European banks had a record breaking 2025 in terms of performance, momentum which continued into 2026 driven by the shift from a decades long low interest rate environment in the wake of the financial crisis, major share buyback programmes and high rates of competitiveness in the space pushing banks to innovate and cut costs have helped fuel this rally.

Where passives outperform actives

Sticking with trackers and one region where it didn’t appear to be worth paying the active management fees was Europe, both including and excluding the UK.

Six ETFs covering Europe made the final list, including the aforementioned Amundi tracker.

This tallies with AJ Bell’s latest ‘Manager versus Machine’ report, which looked at where active funds were, and weren’t, delivering outperformance.

Europe ex UK specifically was found to be be an area where active funds have struggled both near and long-term.

Value investing has enjoyed a resurgence of late, again due to these shifting macroeconomic factors such as rising interest rates, the low levels of which played a role in its growth e.g. tech counterpart leading markets for several years. Discover the green shoots behind Value's current run in our recent article.

Tech’s blockbuster returns are why the IA Technology & Technology Innovation sector has been the most consistently high returning sector for a decade, but another reason more value focused funds and sectors are doing well is that markets have been broadening out their returns beyond just tech, as AI-related fears see investors begin to diversify beyond pure tech.

Indeed, being in some of the most ‘AI-winner’ heavy sectors, such as Emerging Markets, has been the toughest place to be in the past few weeks.

Tech proving why it’s still a favourite market trend

But that doesn’t mean tech-focused funds have not held up well, as the Liontrust Global Technology ranked second over three years with a 130.1% total return.

Run by management duo Storm Uru and Clare Pleydell-Bouverie since 2023, AJ Bell’s head of investment research Paul Angell recently picked them as among the ‘rising star’ managers to keep an eye on.

Angell says that the fund “has clearly benefited from a period in which technology companies, particularly those exposed to AI, semiconductors and digital infrastructure, have dominated global equity markets”, with stakes in Broadcom, SK Hynix and TSMC, for example.

AJ Bell’s Angell notes that the “obvious risk is that technology leadership has been narrow and valuations in parts of the sector are demanding. A strong technology fund can look brilliant when the market backdrop is supportive, but the true test comes when leadership rotates or expensive growth stocks come under pressure”.

A couple of AJ Bell’s Favourite Funds made it onto the list, namely: Artemis US Select and Jupiter Asian Income.

The Artemis fund is run by Cormac Weldon and Chris Kent. The AJ Bell Investments team describe Weldon as “an extremely experienced figurehead, who has been involved in analysing US equities for over three decades”.

The investment approach has been “well honed” over that time, taking top-down macro factors into consideration to help the managers identify themes and the opportunities within that are determined by strong bottom-up fundamental company analysis.

The Jupiter fund equally benefits from a very “experienced manager”, according to the AJ Bell team, with Jason Pidcock a veteran of the Asian equity market.

“He is constantly looking to hone his investment approach, exploring new ideas to ensure that it does not become stale,” the Investments team says.