Friendly Fund

This financial services fund might be one to bank on.
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This story appears in the January 2007 issue of Entrepreneur. Subscribe »

Many entrepreneurs enjoy the comfort and convenience of local banks. Community banks have a history of offering personalized service and customer care, a fact not lost on Ken Mertz, portfolio manager of the Forward Emerald Banking and Finance Fund (HSSAX). "You get more than just money from community banks," he says. "You work with people who are concerned about you and loan officers who pay attention to their customers."

So, Mertz keeps community banks at the forefront of the $300 million fund, which garners four stars from Morningstar and has outperformed the Russell 2000, its benchmark, year after year. Mertz keeps about 100 stocks in the portfolio and looks for companies with a market cap of $2 billion or less. In mid-September, community banks such as Texas Capital Bancshares in Dallas and Wilshire Bancorp in Los Angeles made up 69 percent of the fund's holdings. There were also a few small insurance companies, investment managers and REITs.

Going forward, Mertz expects the financial services industry to continue to grow as baby boomers age. "Baby boomers are going to need more financial services," he says. "That doesn't stop when they turn 65."

This fund isn't for investors who want aggressive growth. But check it out if you like a fund manager who has been at the helm since the fund's inception and owns shares in the fund.

Dian Vujovich is an author, syndicated columnist and publisher of fund investing site

Edition: July 2017

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