Fundsters undecided on the U.S. financial sector take note: Bruce Berkowitz is still bullish on the sector. In today's Wall Street Journal Fund Track, Berkowitz said he started buying shares of Morgan Stanley in the second quarter and now holds a stake just under two percent, making his Fairholme Fund a top 10 holder in the company, with some 25 million shares.

Berkowitz reportedly said the bank is a "powerful franchise ... that has been under the weather with most other financials in the United States." Morgan Stanley shares have dropped 11 percent over the past three months and are down some 1.5 percent over the past 12 months.

Berkowitz's $14.7 billion Fairholme Fund also holds shares in Citigroup Inc. and Bank of America Corp. His bullish bets on Morgan Stanley, valued at about $700 million, makes up some five percent of the fund. Earlier this month, Berkowitz also disclosed a stake in American International Group Inc., and MBIA Inc., resulting in a spike in both companies' "under the weather" shares.  

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE