Sector Rotation: Top 3 Financial Sector Mutual Funds

Companies in the financial services industry, such as brokers and banks, have rallied impressively in the last few weeks. In our view, increased dividends and buy backs, and the prospect of deregulation can support a long-term bull market in the financials sector.

To find the best financial sector mutual funds for the current market environment, we utilized the fund ratings provided by our sister site, Fidelity Sector Report.

The top-rated fund is the Fidelity Select Brokerage Fund (FSLBX):

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Another strong performer is the Fidelity Select Consumer Finance Fund (FSVLX). FSVLX primarily invests in credit card companies and mortgage REITs:

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Our third favorite is the Fidelity Financial Services Fund (FIDSX):

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Sector momentum: financials are going strong

FSRBX chart

The Dow Jones Industrial Average briefly flirted today with the 13,000 level, but was unable to close above it. We have also observed an increased pace in sector rotation recently, as previous market leaders became overbought and have corrected. Currently, it seems that financial services stocks, including brokers and banks, are holding well and can become one of the leading sectors should the bull market continue.

 

Technical analysis screens are provided by FidelitySignal.com  

Monster rally results in an amazing single day gain of 7.80% for the Fidelity Select Brokerage & Investment fund

FSLBX is up 7.80% following the news that six central banks coming to the rescue for European banks by providing cheaper dollar

FSLBX is up 7.80% following the news that central banks around the world are coming to the rescue of European banks by providing cheaper dollar.

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com 

Bear corner: the financial services sector has resumed its downward spiral, as worries about the Spanish economy increase

The Fidelity Select Financial Services fund (FIDSX, change: -2.58%) is one of the weakest performers today reflecting the selling pressure on the sector, which started more than eight months ago.

The Fidelity Select Financial Services fund (FIDSX, change: -2.58%) is one of the weakest performers today reflecting the selling pressure on the sector, which started more than eight months ago.

 

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com  

The stock market rally got stalled today, the financial sector was hit the hardest

The Fidelity Select Brokerage & Investment fund (FSLBX, change: -3.78%) lost the most in today's session.

The Fidelity Select Brokerage & Investment fund (FSLBX, change: -3.78%) was the weakest Fidelity fund in today's session.

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com