Soaring bank stocks and a strong track record by mutual funds specializing in banks and financial services companies could generate a wave of similar funds this year.

Compared to other funds that specialize in such sectors as utilities and real estate, financial services-oriented mutual funds are few in number. But their ranks have increased significantly in recent years.

Lipper Analytical Services Inc. lists 15 open-ended mutual funds that specialize in bank and financial stocks, four of them created since 1991.

"Financial mutual funds are the next-to-smallest sector, so an increase of four or five in five years is sizable," said A. Michael Lipper, president of the research firm.

"Investing in financial services companies has been profitable," added Mr. Lipper. "It only makes sense that more will come."

Fidelity Investments and T. Rowe Price launched new financial funds In September and October, respectively. Other funds created in the last five years include the GT Global Financial Services Fund, the Davis Financial Fund, and the closed-end John Hancock Bank and Thrift Opportunity Fund.

Market sources expect both Dean Witter Inc. and John Hancock to introduce two new funds this year, although the companies declined to comment.

John Hancock is expected to open its unregistered Financial Industry Fund to the public. Created in March, the open-end fund, with slightly under $1 million in assets, is available only to John Hancock employees living in Massachusetts and New Hampshire.

"They tend to incubate their funds by opening them to employees before they introduce them to the public," a source said of John Hancock, adding that the company utilized the same strategy with its Global Marketplace Fund, which went public in February 1996.

Market sources noted that Dean Witter has been aggressively recruiting portfolio managers.

Analysts and portfolio managers point out that strong financial performance by banks and favorable economic winds argue for a proliferation of these mutual funds.

"I wouldn't be surprised to see a few more mutual funds focusing on financial services by significant and small players in the next two years," said James Ellman, portfolio manager for GT Global Financial Services Fund.

The performance of bank and financial company stocks has been significant, and trends - such as share repurchase programs, technology, and consolidation - indicate that profitability will continue, he explained.

James Schmidt, head of the financial institutions division at John Hancock Funds, added that repeal of the Glass-Steagall Act and the relaxation of regulations on bank securities units would also help the financial services industry by generating consolidation between banks and brokerage firms.

"These days a fund pops up every day ... almost anyone can do it," said Scott Edgar, director of research at Sife Trust Fund, one of the biggest financial services funds. "An existing mutual fund or a company with a family of funds in place could start (that kind of) a sector fund. A stand-alone fund would be difficult because it is so competitive."

So far that has been true. But some argue that even the larger players need to beware.

Mr. Lipper noted that the low interest rate environment that has benefited the stocks of banks and other financial services companies could prove temporary.

"Banks have prospered under Federal Reserve Chairman Alan Greenspan, but looking forward in the intermediate future, you have to wonder how long this will continue. Eventually Greenspan is going to be replaced," Mr. Lipper said.

Veteran portfolio manager Daniel Leonard, who runs the $606 million Invesco Financial Fund, also voiced some reservations about new players in field.

"I think the (new funds) would be coming to the game a little too late," said Mr. Leonard. "We believe banks will be fine in 1997 with consolidation, but the group tends to move as one. If one goes up, they all go up, but if one goes down, they all go down."

Christopher Davis, who heads the Davis Financial Fund, said opportunity still exists in the financial sector, but he does not expect the next five years to match the last five.

"We think the '90s will be a decade of financial stock," he said. "The first half was recovery, the other half is growth. But do I think that they will have the same kind of return that we had in last five years? Definitely not, because the hugest gains were made during the recovery."

Mutual fund analyst Michael Mullvihill of Morningstar Inc. said that he is not convinced the investment demand for financial services funds is comparable to the demand for technology mutual funds.

"The difference is that technology is popular and it is easy to believe that it is a wave of the future," he said. "Technology is much sexier."

Mr. Ellman of GT Global Financial expects profitability of financial mutual funds to continue steadily for five to 10 years. "Just because there are more mutual funds does not mean that we are at the top of the market." he said.

But Richard Freeman, who runs the Century Share Trust fund, is not so sure.

Sector funds have a slight disadvantage because they have a smaller market, he explained. "But then, he added, "this is an industry filled with lemmings. (A wave of new funds) may make sense . . . this is an industry where people follow the leader."

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