At the beginning of each quarter, we rank each of the eleven sectors from best to worst with our Sector Ratings Report. These rankings are forward-looking and indicate how each sector should perform going forward.
This analysis is available to Professional and Institutional members and enables investors to better allocate capital by identifying which funds to buy and which funds to avoid. More reliable & proprietary fundamental data, as shown in The Journal of Financial Economics, provides a new source of alpha and drives our research. Our Robo-Analyst AI[1] empowers our unique ETF and mutual fund rating methodology, which leverages our rigorous analysis of each fund’s holdings.[2]
Some of the best funds include iShares U.S. Home Construction ETF (ITB), Vanguard Consumer Staples Fund (VCSAX), Invesco KBW Property & Casualty Insurance ETF (KBWP), and Schwab Health Care Fund (SWHFX).
Some of the worst funds include Lord Abbett Healthcare Fund (LHCAX), ProShares S&P Kensho Cleantech (CTEX), Saratoga Advantage Financial Services (SFPAX), and AdvisorShares Restaurant ETF (EATZ).
Last quarter’s Sector Ratings can be found here. Last quarter’s Sector Recap is available here.
The following are our sector analyses for the first quarter of 2026.
- Basic Materials
- Consumer Cyclicals
- Consumer Non-cyclicals
- Energy
- Financials
- Healthcare
- Industrials
- Real Estate
- Technology
- Telecom Services
- Utilities
This article was originally published on January 22, 2026.
Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector, style, or theme.
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[1] Harvard Business School features the powerful impact of our research automation technology in the case New Constructs: Disrupting Fundamental Analysis with Robo-Analysts.
[2] See how our models and financial ratios are superior to Bloomberg and Capital IQ’s (SPGI) analytics in the detailed appendix of this paper.