Interest rates are likely to remain at rock-bottom levels for the next couple years. No doubt, this is good news for financial institutions. In fact, as the economy starts to rebound, these firms should see strong profits as loan volume increases for things like real estate and businesses.
A mutual fund to consider for tackling this angle is Davis Financial (MUTF:RPFGX). RPFGX is managed by Kenneth Feinberg, one of the industry’s top money managers in the financial sector. While Davis Financial has averaged just 6% in the past 10 years — unsurprisingly, the RPFGX was crushed by the financial crisis — the fund is up a market-beating 17% year-to-date.
Feinberg looks for value opportunities and is willing to hold onto stocks for the long haul, translating into a sparse 12% turnover ratio, which helps bolster returns. Its 0.91% expense ratio also is reasonable, and the fund has earned a four-star rating from Morningstar.