Custodian banks, sometimes referred to simply as Custodians, offer a unique investment within the financial sector according to Erin Davis from Morningstar Research. Custodian bank returns are expected to increase significantly within the next couple of years. Custodians are not like traditional banks because their main function is to provide safekeeping for financial assets like bonds and stocks. Their typical clients includeinstitutional firms with a considerable amount of investments such as banks, insurance companies, hedge funds and pension funds.

Some of the best performing custodians are: Bank of New York Mellon, State Street and Northern Trust, each are fairly valued according to Morningstar. Erin Davis explains why custodians tend to be stable, well capitalised businesses, above-average dividend payers and therefore a good investment.