Top 10 Financial Sector Stock Mutual Funds 2012

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This post is about top 10 financial sector stock mutual funds of 2012. Best funds are Prudential Financial Services, Burnham Financial Industries, FBR Small Cap Financial,  Royce Financial Services, etc.

Best Financial Mutual Funds
Intro

U.S. domestic equity mutual fund may specialize in a specific sector of the stock market. These specialty categories are financials, communications, natural resources, real estate, utilities, technology, health care, and miscellaneous.

These sector equity funds invest in its specific sector according to the fund objective. For instance, the real estate sector stock mutual fund will invest its assets in companies operated in real estate industry, etc.

The financial sector stock fund typically uses its assets to purchase stocks of companies operated in financial or banking services. It may include brokerage, investment, insurance, credit services, and asset management business. More details can be found in its fund prospectus.

Best Financial Mutual Funds

These best financial sector equity funds are selected based on its long term performance. You may find information such as fund review, yield, performance, management, load, rating, top stocks, etc.

Top 10 Financial Sector Stock Mutual Funds of 2012 are:
  1. Prudential Financial Services A (PFSAX)
  2. Burnham Financial Industries A (BURFX)
  3. Kinetics Market Opportunities Advisor A (KMKAX)
  4. FBR Small Cap Financial Investor (FBRSX)
  5. Royce Financial Services Service (RYFSX)
  6. Burnham Financial Services A (BURKX)
  7. Legg Mason Investment Counsel Financial Services A (SBFAX)
  8. Davis Financial A (RPFGX)
  9. FBR Large Cap Financial Investor (FBRFX)
  10. Fidelity Select Brokerage & Investment Management (FSLBX)
1. Prudential Financial Services A (PFSAX)

The investment objective of Prudential Financial Services fund it to provide long-term capital appreciation through investment in equity and equity-related securities of companies within the financial services sector. It may invest in U.S. and foreign companies.

Prudential Financial Services A
This best performer financial fund is currently managed by Mark T. Lynch. It has $201.52 million of total net assets. The annual expense ratio is 1.43%. The minimum initial investment for investing in this fund is $2,500 for brokerage account. It has 12-month dividend yield of 1.36% and is paid annually.

Morningstar has rated this fund with 4-stars rating. The YTD return is 22.89%. The best 1-year total return was achieved in 2009 with 83.61%. The 3-year beta risk is 1.53. This fund is available for purchase through 106 brokerages. The other classes of this fund are Class B (PUFBX), Class C (PUFCX), Class R (PSSRX) and Class Z (PFSZX).

The top holdings as of March 2012 are Citigroup, National Bank of Canada, BB&T, Standard Chartered, Julius Baer Group, Mitsubishi UFJ Financial Group, Banco Santander-Brasil, Toronto-Dominion Bank, Regions Financial and DNB Bank. They represent 39.3% of the total net assets among 44 total holdings. The largest industries are Banks (49.4%), Insurance (20.3%) and Capital Markets (16.7%).

2. Burnham Financial Industries A (BURFX)

The Burnham Financial Industries uses its assets to purchase the common stocks of U.S. companies of the financial services sector. It invests in any market capitalization. This fund has annual expense ratio of 1.99%. This expense fee is higher than the average in the Financial category (1.75%). Anton Schutz is the fund manager since April 2004.

It has a small dividend yield of 0.26%. The benchmarks are Lipper Financial Services Average and Lipper Financial Services Fd IX.  This fund is now open to new investors. It has maximum front-end sales charge of 5.00%. The CUSIP of this fund is 122315872.

Based on load adjusted return, this domestic stock fund has returned 8.71% over the past 3-year and 1.71% over the past 5-year. It has YTD return of 11.29%. This Burnham Financial Industries fund has 4-stars rating from Morningstar. The brokerages that provide the sale of this fund are Vanguard, JP Morgan, E Trade Financial, Schwab Retail, TD Ameritrade Inc, etc.

The top 5 stocks as per the first quarter of 2012 are 1st United Bancorp Inc (11.20%), Investors Bancorp Inc (8.06%), Gleacher & Company Inc (6.90%), Western Liberty Bancorp (6.83%) and Citigroup Inc (6.63%).

3. Kinetics Market Opportunities Advisor A (KMKAX)

The Kinetics Market Opportunities Advisor fund invests majority of net assets in common stocks, convertible securities, warrants and depository receipts such as ADRs, GDRs and IDRs. It invests in U.S. and foreign companies involved in capital markets and the gaming industry companies.

Kinetic Market Opportunities Adv
Since its inception in January 2006, this Kinetics fund has been managed by Murray Stahl. He is the Chairman of the Board of Horizon Kinetics and was a co-founder of the firm. This financial sector fund has dividend yield of 0.63%. The latest was distributed in December 2011 ($0.08). The annual holdings turnover as of April 12, 2012 is 14%. While the average turnover in the category reaches 148.66%.

This best performer financials mutual fund has YTD return of 16.87% and 5-year average return of 0.47%. The best 1-year total return was recorded in year 2009 with 49.66%. The worst was in 2008 with -54.92%. The 3-year beta risk is 1.15. The other classes of this fund are Advisor C Class (KMKCX), Institutional Class (KMKYX) and No Load Class (KMKNX).

The top holdings as per March 2012 are Wisdom Tree Investments Inc (10.4%), CBOE Holdings Inc (7.7%), Intercontinental Exchange Inc (6.6%), Franco-Nevada Corporation (5.9%), Brookfield Asset Management Inc – Class A (4.6%). The top industries are Asset Management (29.3%) and Security, Commodity Contracts and other Financial Investment and Related Act (21.8%).

4. FBR Small Cap Financial Investor (FBRSX)

The investment objective of FBR Small Cap Financial fund is to seek capital appreciation through investment in small companies stocks. These companies involve in financial services to consumers and industry.

The overall Morningstar rating of this FBR fund is 4-stars.  It has total net assets of $193.12 million. This financial sector mutual fund is currently managed by David Ellison since 1996. The annual expense ratio is 1.52%. Investors can open a brokerage account in this fund with minimum initial purchase of $2,000. The management fee is 0.25%.

It has YTD return of 11.76%. The 10-year annualized return of this fund is 6.15%. It is on the 86% rank in the Financial category with 1.17 of 3-year risk beta. JP Morgan, T Rowe Price, Schwab Retail, Fidelity Retail Funds Network are among the 90 brokerages that provide this fund. The risks related to principal investment strategies include market risk, equity investments, temporary defensive positions, small-cap investments, etc.

The top holdings are Washington Federal Inc (3.4%), Brookline Bancorp Inc (3.2%), Susquehanna Bancshares Inc (3.1%), Astoria Financial Corp (2.9%), Sterling Financial Corp (2.9%) and Wintrust Financial Corp (2.8%). The top sectors are Banks (40.6%) and Savings and Loans (37.4%).

5. Royce Financial Services Service (RYFSX)

The Royce Financial Services fund focuses its investment in the equity securities of micro-, small- and/or mid-cap companies with market capitalizations up to $5 billion. These companies primarily engaged in the financial services industry. It may invest in larger-cap companies and foreign securities.

Royce Financial Services Svc
The total net assets of this financial sector equity mutual fund are only $16.99 million. It also has annual expense ratio of 1.49%. There is no maximum sales charge for investing in this fund. The 12b1 fee is 0.25%. It has dividend yield of 0.85%. Charles Royce is the current fund manager.

Based on the load adjusted return, this best mutual fund has returned 20.62% over the past 3-year and -0.27% over the past 5-year. It has YTD return of 15.41%. The average market capitalization is $1,959 million.

The top portfolio industry breakdown as of March 2012 is Capital Markets (57.9%). The top holdings are Ashmore Group, Invesco, Alliance Bernstein Holding L.P. Northern Trust and Regional Management.

6. Burnham Financial Services A (BURKX)

The Burnham Financial Services fund invests in stocks of U.S. companies in the financial services sector. It was first introduced to public in June 1999. Anton Schutz has been the manager since its inception. It also has 4-stars rating from Morningstar. The annual expense ratio is 1.89%. The maximum sales charge is 5.00%. It also has dividend yield of 0.06%.

The minimum initial investment of this fund is $2,500 for brokerage account. Smaller amount required for retirement account ($100). The best 1-year total return was in year 2000 with 52.78%. Lipper Financial Services Average and Lipper Financial Services Fund IX are the benchmarks of this fund. It has 3-year beta of 0.90.

previous: Top Real Estate Mutual Funds of 2012

The top holdings as per February 2012 are 1st United Bancorp Inc, Solar Senior Capital Ltd, Cowen Group Inc, Citizens South Banking Corp and Investors Bancorp Inc.

7. Legg Mason Investment Counsel Financial Services A (SBFAX)

This Legg Mason Investment Counsel Financial Services fund is ranked with 4 stars rating by Morningstar. Its portfolio turnover rate is 15%. The minimum initial investment requirement is $1,000. Its expense ratio is 1.50%. The sales load of this best financial fund is 5.75%.

This Legg Mason fund has $56.4 million of total net assets. As of April 2012, the top 3 stocks in its portfolio are Fiserv Inc, Territorial Bancorp In, and Alterra Capital Holdings Ltd. The fund has returned 15.83% over the past 3 year, and 4.73% over the past decade.

8. Davis Financial A (RPFGX)

As part of Gold rated fund, this Davis Financial fund utilizes its assets to purchase stocks of financial services sector companies. This financial sector equity fund is open to new investors. The expense ratio fee is 0.91%. It also has a dividend yield of 1.48%. The fund investment style is large blend.
Morningstar has ranked this top mutual fund with 3 stars rating. The top 2 holdings are Transatlantic Holdings Inc, and American Express Co.

9. FBR Large Cap Financial Investor (FBRFX)

The FBR Large Cap Financial fund has $66 million of total net assets. This no load fund has a portfolio turnover rate of 97%. The minimum initial investment requirement is $2,000. Its expense ratio is 1.61% per year.

10. Fidelity Select Brokerage & Investment Management (FSLBX)

Rated with 3 stars, this Fidelity Select Brokerage & Investment Management fund has an expense ratio of 0.85%. This no load fund has $381 million of total net assets. The dividend yield is 1.15%. The top 5 stocks in its assets are Franklin Resources Inc, Citigroup Inc, Morgan Stanley, Ares Capital Corporation, and Blackstone Group LP.

Disclosure: No Position

Fund Performance Information
NoNameTicker1 Year Return %3 Year Return %5 Year Return %10 Year Return %Expense Ratio
1Prudential Financial Svcs APFSAX-8.62%32.36%4.72%7.58%1.43%
2Burnham Financial Industries ABURFX-7.44%14.29%2.24%-1.91%
3Kinetics Market Opportunities Adv AKMKAX0.23%26.61%0.33%-1.89%
4FBR Small Cap Financial InvestorFBRSX-11.59%14.36%-0.63%6.29%1.68%
5Royce Financial Services SvcRYFSX-4.81%25.14%-0.71%-1.67%
6Burnham Financial Services ABURKX-5.46%13.21%-2.77%6.01%1.80%
7Legg Mason Inv Counsel Fincl Svcs ASBFAX -1.62%15.83%-2.81%4.73%1.50%
8Davis Financial ARPFGX-2.18%27.80%-2.94%3.51%0.95%
9FBR Large Cap Financial InvestorFBRFX-8.77%18.30%-3.25%3.02%1.62%
10Fidelity Select Brokerage & Invmt MgmtFSLBX-11.51%22.01%-4.92%5.00%0.88%
11Fidelity Select InsuranceFSPCX -4.13%26.72%-5.05%2.24%0.93%
12T. Rowe Price Financial ServicesPRISX-9.54%22.79%-5.62%2.45%0.96%

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