Go Where The Money Is

Funds that focus on the financial services industry offer outstanding long-term performance

round of rate increases will come to an end in late 2005 or 2006.

Although investors shouldn’t overload on financial services mutual funds, a fund in this category might merit a small place in a well-diversified portfolio. “Investors who have growth-heavy portfolios might use these funds for balance,” says Lutton. That is, a financial services mutual fund that holds value stocks could steady a portfolio tilted too far toward growth stocks.

If you’re interested in financial services mutual funds, a couple of Morningstar analyst picks are the Davis Financial (RPFGX) and T. Rowe Price Financial Services (PRISX) funds, both of which spread their holdings over many different types of companies.

Fund Name Ticker 1-Yr. Total Return* 3-Yr. Annualized Total Return* 5-Yr. Annualized Total Return* Minimum Initial Purchase Phone Number
Merrill Lynch Global Financial Svcs B MBFNX 37.01% 25.60% 14.86% $1,000 800-995-6526
Forward Emerald Banking and Finance A HSSAX 21.39 23.12 22.85 500 800-232-0224
Fidelity Select Brokerage & Investmnt FSLBX 39.19 21.56 6.09 2,500 800-343-3548
FBR Small Cap Financial FBRSX 15.12 19.78 24.90 2,000 888-888-0025
Diamond Hill Bank & Financial A BANCX 12.31 19.46 24.72 10,000 888-226-5595
Burnham Financial Services A BURKX 11.39 18.97 25.56 2,500 800-874-3863
Gartmore Global Financial A GLFAX 16.38 18.78 NA 2,000 800-848-0920
Constellation TIP Financial Services TFFIX 21.36 17.68 7.71 2,500 866-242-5742
AXA Enterprise Global Financial Svc A EGFAX 18.74 16.19 10.51 2,000 800-368-3527
Schwab Financial Services SWFFX 22.22 16.16 8.71 5,000 800-435-4000
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