High chances of the Fed increasing interest rates this month are having a positive impact on the broader financial sector. An increase in interest rates would boost the overall profitability of financial companies including brokerage firms, insurance companies and banks. So, investors looking to gain from a rising rate scenario may consider financial mutual funds for profits. Additionally, the increased interest rates would enable banks to earn more on the spread between interest rates for savings accounts and certificates of deposit.
Below we share with you three top-rated financial mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.
Fidelity® Select Financial Services Portfolio (MUTF:FIDSX) invests the majority of its assets in common stocks of companies involved in offering financial services to industry and consumers. FIDSX seeks capital growth and primarily invests in equity securities of both U.S. and non-U.S. companies. The fund analyses the industry position and financial condition of companies before investing. Fidelity Select Financial Services Portfolio returned 10.8% over the last three-month period.
Fidelity® Select Consumer Finance Portfolio (MUTF:FSVLX) seeks growth of capital. FSVLX invests a large chunk of its assets in securities of companies that provide products and services related to consumer finance. The fund primarily focuses on acquiring common stocks of companies across the globe. FSVLX considers factors including financial strength and economic condition to invest in a company. Fidelity Select Consumer Finance Portfolio fund returned 5.4% over the last three-month period.
Shilpa Mehra is the fund manager of FSVLX since 2012.
Fidelity® Select Insurance Portfolio (MUTF:FSPCX) invests a large portion of its assets, and in no event less than 25%, in securities of companies principally engaged in underwriting, reinsuring, selling, distributing and placing insurance. This non-diversified fund seeks appreciation of capital. FSPCX uses fundamental analysis to evaluate the financial condition of companies. Fidelity Select Insurance Portfolio fund returned 6.6% over the last three-month period.
FSPCX has an expense ratio of 0.80% as compared to category average of 1.59%.