Financials Get Boost from Hedge Funds and Mutual Funds Amid Diverging AI Trade Views
Investors are showing historic bullishness for financial stocks, particularly after companies in this sector reported strong earnings in Q2. According to Goldman Sachs' data, hedge funds and mutual funds have both increased their buying of financial stocks, with hedge funds tilting towards Financials by over 300 basis points since Q1. Mutual funds also increased their tilt to Financials last quarter and now carry their largest overweight since at least 2012.
The strong bullishness for financials comes as institutional investors' views on the AI trade are diverging, with one group staying heavily invested while another has pulled away. Goldman's data shows that hedge funds and mutual funds have different investing strategies when it comes to high-flying areas like AI. While some big name hedge funds are also bullish on financials, such as Bill Ackman's Pershing Square increasing positions in Mastercard and Visa.
Goldman's chief strategist Ben Snider notes that the stocks that both hedge funds and mutual funds have been buying have mixed performances in 2026. However, four names stand out: Capital One Financial Group, Corpay, Fiserv, and Interactive Brokers Group. These companies have seen significant buying from both investor groups.