Because the financial services sector is typically one of the first to improve following an economic downturn, we decided to ask the portfolio manager of a leading financial services mutual fund for his opinion on the economy and how it will affect the companies he covers.
|Anton Schutz |
Burnham Financial Services
|Recent Daily Interviews|
Tracy Pride Stoneman
Anton Schutz oversees (BURKX) Burnham Financial Services, the best-performing financial services mutual fund so far this year and over the trailing 12 months. His fund has returned 26.8% this year and 52.4% in all of 2000.
Schutz believes the economy will improve by the first or second quarter and that the markets should begin improving six months ahead of that, which would mean stocks could begin to rebound by the end of the year. In anticipation of this, Schutz has begun moving some of his holdings away from regional banks and thrifts, and into leading money center and brokerage stocks.
TSC: Financial companies are said to be one of the sectors that lead the economy out of a downturn. Given that this is your specialty, do you have any sense of when things might improve?Schutz: It's very difficult to see earnings visibility. I think earnings are going to be awful for the broker dealers this quarter. The underwriting business couldn't be any worse. But I think we are getting closer to the bottom. As far as the timing of the recovery, I'm looking towards the first quarter, maybe second quarter