Considering the fates met by one-time banking giants


(WB) - Get Report


Washington Mutual

(WM) - Get Report



and not to mention

Countrywide Financial


Lehman Brothers



(AIG) - Get Report

, it would seem financial services mutual funds were the last places in which an investor should have been in recent months, right?


Excluding leveraged and "inverse" funds, which because of their unique structures virtually always dominate the upper and lower extremes of performance arrays, the six best open-end stock mutual funds in the third quarter were specialists in financial services.

And to add proof that contrary investing was carried to an extreme during the period, a pair of funds focusing on the much maligned real estate sector also made the accompanying table of the 10 best performing stock funds for quarter just ended -- excluding the leveraged and inverse players.

Investors who got into -- or already owned and decided to stick with--the financial services firms on the adjoining list during the summer financial maelstrom were rewarded double-digit percentage gains for their anguish.

Two of the financial services funds,

John Hancock Regional Bank

(FRBAX) - Get Report


Forward Banking & Finance

(HSSAX) - Get Report

, each vaulted more than 20% during the quarter. Both are heavily invested in regional banking firms, as is

FBR Small-Cap Financial Fund


, which also holds small mortgage and investment stocks.


Rydex Series-Banking Fund

(RYKAX) - Get Report

achieved a gain of 12.1% during the quarter with more mainstream holdings such as

Wells Fargo

(WFC) - Get Report


US Bancorp

(USB) - Get Report





Bank of America

(BAC) - Get Report


Slightly more diversified within the financial sector than RYKAX is the

Burnham Financial Industries Fund


, which in addition to banking firms such as


(C) - Get Report


JPMorgan Chase

(JPM) - Get Report

, holds

Met Life Insurance

(MET) - Get Report


Ameriprise Financial

(AMP) - Get Report


The only general investment fund on the list,

Ridgewood Large-Cap Growth Stock

(STCIX) - Get Report

, advanced 11.4% during the quarter with investments in blue-chip stocks such as


(IBM) - Get Report



(GOOG) - Get Report



(MSFT) - Get Report



(AAPL) - Get Report



(INTC) - Get Report


Baxter International

(BAX) - Get Report


Ridgewood Large-Cap Growth is the only fund in the table with gains for the latest quarter, the most recent 12 months and the past three years.

Richard Widows is a senior financial analyst for Ratings. Prior to joining, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.