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 |