Financial Funds Slide 25% This Week

The asset value of the ProShares Ultra Financials (UYG Quote) was likewise cleaved in two with a 51.3% decline for the period. On top of XL Capital, Lincoln National, Keycorp and Merrill Lynch, the fund also suffered wounds of -64.5% from Protective Life (PL Quote), -53.1% from Conseco (CNO Quote), and 49.9% from Principal Financial Group (PFG Quote).

The fund losses were not restricted to ETFs. An open-end fund, Banks UltraSector ProFund (BKPIX Quote), leveraged 150% to the Dow Jones U.S. Banks Index, severed 44.1% from fund-holder value on declines of 46% in Bank of America (BAC Quote) and 42.5% in Citigroup (C Quote), among others. Bank of America is having to buy back $4.5 billion in auction-rate securities and Citigroup lost out on the Wachovia (WB Quote) battle with Wells Fargo(WFC Quote).

Worst Performing Financial Funds for the Week Ending Thursday Oct. 9
Fund	Ticker	Rating	Fund Type	1 Week Total Return
Rydex 2X S&P Select Sector Financial ETF	RFL	U	ETF	-54.39%
ProShares Ultra Financials	UYG	E+	ETF	-51.25%
ProFunds Banks UltraSector ProFund	BKPIX	E-	Open-End	-44.07%
First Financial Fund Inc	FF	E+	Closed-End	-43.01%
First Trust Specialty Finance and Financial Opportunities	FGB	E	Closed-End	-40.92%
ProFunds Financials UltraSector ProFund	FNPIX	E-	Open-End	-40.53%
Diamond Hill Financial Trends Fund Inc	DHFT	C-	Closed-End	-32.51%
AIM Financial Services Fund	FSFSX	E-	Open-End Pension	-31.70%
PowerShares FTSE RAFI Financials Sector Portfolio	PRFF	D	ETF	-30.35%
Financial Select Sector SPDR Fund	XLF	C-	ETF	-30.30%
Source: Bloomberg & TheStreet.com Ratings

With only two financial funds, both inverse funds tracking the opposite of the Dow Jones U.S. Financials Index, gaining this week, the ten best performing fund list has been intentionally omitted. For the five trading days under review, the unleveraged Short Financials ProShares (SEF Quote) jumped 35.50% and the 200% leveraged UltraShort Financials ProShares (SKF Quote) spiked 77.93%!

For more information, check out an explanation of our ratings.