I have data from Indian Mutual funds from 2006-2016 that indicates that one would be significantly better off investing in a bunch of sector funds over index funds/a bunch of index funds. Is there any prior research/theory about it?
A sector fund is just that, a fund that doesn't own the broad market, but a slice of one sector, say utilities, semiconductors, or consumer staples, etc.
If the index you follow is available as 10 sectors that would comprise the whole index, buying all 10 sector funds would be silly, they literally add up to that larger index.
If you are convinced that some funds will outperform or some will underperform (same thing when you think about it) you can buy the better ones. With no other data, I'd say that the claim that one can be significantly better off long term is a bit exaggerated. Sectors appear to rotate depending on the part of the economic cycle you're in.