Ackman and Trump Team Up on Favored Stocks Visa and Mastercard
Investment managers have shown a preference for financial stocks in recent quarters. According to Goldman Sachs analyst Ben Snider, hedge funds increased their allocation to financials by 300 basis points last quarter.
Within the fintech space, Visa (V) and Mastercard (MA) emerged as two stocks favored by both hedge funds and mutual funds, landing on Snider’s “shared favorites” list. This list has been maintained since 2013, with the stocks delivering an annual return of 17%, roughly two percentage points above the S&P 500 average over the same period.
Billionaire Bill Ackman's Pershing Square fund opened new positions in Visa and Mastercard, each worth about $1.1 billion, representing 5.8% and 5.6% of the portfolio respectively. President Trump’s independent third-party money managers also made purchases of Visa and Mastercard.
The two companies possess significant competitive advantages and the ability to sustain high earnings growth over the long run. Ackman described them as “capital-light toll-takers” that collect a nominal fee on every transaction without taking material risk, making them natural beneficiaries of higher inflation.