Mutual fund overweight in Financials rises to a ten-year high, with both fund types favoring V and MA
AI summary card
Mutual fund overweight in Financials rises to a ten-year high, with both fund types favoring V and MA
In 2Q26, mutual funds were approximately 230 bp overweight the Financials sector, up about 40 bp QoQ, making Financials the most overweight sector in the S&P 500. Hedge funds and mutual funds shared bullish or overweight positions in V and MA, although positioning changes varied significantly across subsectors and individual stocks.
- Mutual funds were approximately 230 bp overweight the Financials sector, up about 40 bp QoQ.
- The current tilt toward Financials is the highest in the past ten years and significantly above the average overweight of approximately 110 bp since 2012.
- Insurance, Banks, Capital Markets, and Consumer Finance remained the most overweight Financials subsectors among mutual funds, although positioning in all four declined in 2Q26.
- MS saw the largest QoQ increase in mutual fund positioning among Financials stocks, while WFC remained the most overweight individual stock but also experienced the sector's largest QoQ position reduction.
- V, MA, and COF were popular hedge fund long positions, while V and MA were also overweight among mutual funds.
- 13-F data are not real-time snapshots of holdings and are suitable only for assessing positioning trends.
Report interpretation
Overview
Using 13-F data compiled by Goldman Sachs' equity strategy team, the report analyzes mutual fund and hedge fund positioning in the U.S. Financials sector in 2Q26. The main conclusion is that mutual funds' overall overweight in Financials rose further to a ten-year high, although subsector- and stock-level positioning diverged, with both reductions and increases; among hedge funds, V, MA, and COF were popular long positions, while V and MA were also overweight among mutual funds.
Core views
Mutual funds further increased their allocation to the Financials sector in 2Q26. The increase in mutual fund allocation to Financials ranked second among S&P 500 sectors, while Financials became the most overweight sector in the entire index. At quarter-end, mutual funds were approximately 230 bp overweight Financials, up about 40 bp QoQ; by comparison, the average overweight since 2012 was approximately 110 bp. The report accordingly notes that the current tilt toward Financials is at its highest level in the past ten years, indicating that the sector as a whole has become a highly concentrated relative allocation among mutual funds. The sector-wide allocation increase does not mean that all Financials subsectors received inflows simultaneously. By GICS classification, Insurance, Banks, Capital Markets, and Consumer Finance remained the most overweight subsectors among mutual funds, with Insurance continuing to rank first, but exposure to all four subsectors declined in 2Q26. Capital Markets and Banks recorded the largest declines, falling 9 bp and 7 bp QoQ, respectively. Meanwhile, mutual funds increased allocations to Financial Services and Mortgage REITs but remained underweight both subsectors even after the increases. This indicates that while total Financials exposure rose, internal positioning was being reallocated: traditionally highly overweight subsectors cooled, while previously underweight areas received marginal increases. Individual stocks likewise showed clear divergence. MS recorded the largest increase in mutual fund allocation among Financials stocks in 2Q26; WFC remained the most overweight Financials stock relative to the benchmark among mutual funds, but it also recorded the largest QoQ position reduction in the entire sector. The report's principal large-cap Financials overweights among mutual funds included WFC, SCHW, and MRSH, while the principal underweights included JPM, AFL, and SPG. Some of the overweight positions disclosed in the GSTHMFOW basket included SCHW at 33 bp, MA at 24 bp, V at 21 bp, BAC at 20 bp, and WFC at 18 bp, further demonstrating that overweights were not concentrated in a single Financials subsector. Popular hedge fund long positions in Financials included V, MA, and COF. Measured by the number of hedge funds holding a stock and ranking it among their top ten positions, V, MA, and COF were popular long positions; measured by hedge fund ownership as a percentage of company market capitalization, CHYM, LPLA, FNF, WBS, and UNM were among the most concentrated Financials long positions. The report also shows that the Financials stocks with the largest increases in the number of funds holding them in 2Q26 included, in descending order, CME, LPLA, IBKR, TCBI, and XYZ: 92 hedge funds held CME, up 26 QoQ; 73 held LPLA, up 22; 89 held IBKR, up 19; 39 held TCBI, up 17; and 87 held XYZ, up 16. On the short side, BAC and AXP were listed as popular hedge fund shorts. BAC's short position totaled $6.2 billion, approximately 1% of its market capitalization; AXP's short position totaled $4.1 billion, approximately 2% of its market capitalization. The popular positions table also showed that V, MA, COF, NU, and SPGI had year-to-date performance relative to the S&P 500 of -7%, -11%, -24%, -27%, and -24%, respectively; BAC, AXP, JPM, and BRK.B on the short list had relative performance of 1%, -22%, -3%, and -13%, respectively. These data describe positioning popularity and contemporaneous relative performance rather than ratings issued by the report. The overlap between mutual funds and hedge funds was concentrated in V and MA: both types of institutions held long or overweight positions in these two stocks, and the report found no Financials stocks that both groups jointly shorted or underweighted. This intersection indicates that payment network companies were the most consistent Financials positioning theme across the two institutional groups, although the report did not translate this positioning consensus into a new investment recommendation. The data set included 504 large-cap mutual funds managing a combined $4.6 trillion in equity assets and 991 hedge funds with combined gross equity positions of $5.4 trillion. In one section, the report described the holdings as positions at the beginning of 2Q26 and noted that they were based on 13-F filings through August 14, 2026; the sample description elsewhere characterized them as beginning-of-3Q26 positions based on the latest 13-F filings. The report explicitly cautions that 13-F data are not real-time snapshots of holdings, so these results should be interpreted as directional observations of institutional positioning trends and relative crowdedness.
Analysis framework
The report first aggregates 13-F filings to assess mutual funds' overweight or underweight positioning in the Financials sector relative to the S&P 500 benchmark and compares it with the prior quarter, the average since 2012, and the ten-year range. It then breaks down positioning changes by GICS subsector before examining stock-level overweights, underweights, and quarterly increases or decreases. For hedge funds, it measures popular long positions, popular short positions, and positioning concentration based on the number of funds placing a stock among their top ten holdings, the equity value of short positions, and hedge fund ownership as a percentage of company market capitalization, respectively, before comparing holdings shared by mutual funds and hedge funds.
Methodology notes
13-F institutional positioning analysis
The report aggregates mutual fund and hedge fund 13-F filings to examine relative positioning and quarterly changes across the Financials sector, subsectors, and individual stocks. This method can reveal institutional positioning trends, but the filing lag means that the data are not real-time trading records.
Comparison of benchmark-relative overweights, underweights, and quarterly changes
The report compares fund holding weights with S&P 500 benchmark weights, expresses overweights or underweights in basis points, and combines QoQ changes, historical averages, and the ten-year range to assess current positioning.
GICS Financials subsector breakdown
The report divides the Financials sector by GICS classification into subsectors such as Insurance, Banks, Capital Markets, Consumer Finance, Financial Services, and Mortgage REITs to identify internal fund reallocations underlying changes in total sector positioning.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- U.S. S&P 500 Financials sectorMutual funds were approximately 230 bp overweight overall, up about 40 bp QoQ, making it the most overweight sector in the S&P 500.
- Strengths
- The current relative allocation is at its highest level in the past ten years.
- Weaknesses
- Among highly overweight subsectors, Insurance, Banks, Capital Markets, and Consumer Finance all experienced QoQ position reductions.
- Comparison
- The average overweight since 2012 was approximately 110 bp.
- Risks
- 13-F data are reported with a lag and cannot represent real-time holdings.
- VIt was both overweight among mutual funds and a popular hedge fund long, representing a core overlapping position held by both institutional groups.
- Strengths
- The mutual fund basket was 21 bp overweight, and both institutional groups held the stock consistently.
- Weaknesses
- Year-to-date performance relative to the S&P 500 was -7%.
- Comparison
- Together with MA, it represented the clearest cross-fund-type positioning overlap in the report.
- MAIt was both overweight among mutual funds and a popular hedge fund long.
- Strengths
- The mutual fund basket was 24 bp overweight, and both institutional groups held the stock consistently.
- Weaknesses
- Year-to-date performance relative to the S&P 500 was -11%.
- Comparison
- Together with V, it represented the clearest cross-fund-type positioning overlap in the report.
- WFCIt remained the most overweight Financials stock among mutual funds relative to the benchmark.
- Strengths
- It continued to rank among the leading mutual fund overweights in Financials.
- Weaknesses
- In 2Q26, it recorded the largest QoQ decline in mutual fund positioning across the entire Financials sector.
- Comparison
- The report also listed its overweight in the mutual fund basket at 18 bp.
- MSIt received the largest QoQ increase in mutual fund allocation among Financials stocks in 2Q26.
- Strengths
- It recorded the most pronounced marginal improvement in mutual fund positioning.
- Comparison
- Its allocation increase exceeded that of the other Financials stocks covered in the report.
- BACIt appeared in the mutual fund overweight basket while also ranking as a popular hedge fund short.
- Strengths
- The mutual fund basket was 20 bp overweight.
- Weaknesses
- The hedge fund short position totaled $6.2 billion, approximately 1% of market capitalization.
- Comparison
- It illustrates positioning divergence between mutual funds and hedge funds.
- AXPIt was listed as a popular hedge fund short in the report.
- Weaknesses
- The short position totaled $4.1 billion, approximately 2% of market capitalization.
- Comparison
- Its short equity value was lower than BAC's, but its short position as a percentage of market capitalization was higher than BAC's.
- CHYM, LPLA, FNF, WBS, UNMMeasured by hedge fund ownership as a percentage of company market capitalization, they were among the most concentrated Financials long positions.
- Strengths
- Hedge fund long-position concentration was relatively high.
- Comparison
- This metric differs from measuring popular long positions by the number of funds placing a stock among their top ten holdings.
Key data
- Mutual fund overweight in FinancialsApproximately 230 bpUp approximately 40 bp QoQ in 2Q26, making it the most overweight sector in the S&P 500
- Average overweight since 2012Approximately 110 bpThe current overweight of approximately 230 bp is at its highest level in the past ten years
- QoQ increase ranking for Financials allocation2ndAmong S&P 500 sectors in 2Q26
- Change in Capital Markets subsector positioning-9 bpQoQ decline among mutual funds in 2Q26
- Change in Banks subsector positioning-7 bpQoQ decline among mutual funds in 2Q26
- Mutual fund sample504 funds, $4.6 trillion in equity assetsLarge-cap mutual fund sample
- Hedge fund sample991 funds, $5.4 trillion in gross equity positionsBased on the latest 13-F filings
- Selected overweights in the mutual fund basketSCHW 33 bp; MA 24 bp; V 21 bp; BAC 20 bp; WFC 18 bpFrom the GSTHMFOW Financials constituents table
- Leaders in increases in the number of hedge fund holdersCME +26; LPLA +22; IBKR +19; TCBI +17; XYZ +16QoQ change in the number of hedge funds holding the relevant stocks in 2Q26
- BAC short position$6.2 billion, 1% of market capitalizationA popular Financials short based on the equity value of short positions
- AXP short position$4.1 billion, 2% of market capitalizationA popular Financials short based on the equity value of short positions
- 13-F filing cutoff dateAugust 14, 2026The report explicitly cautions that the data are not real-time snapshots of holdings
Impact & implications
The report concludes that mutual funds' relative allocation to the U.S. Financials sector has reached a historical high, but capital is being reallocated within the sector: the previously highly overweight Insurance, Banks, Capital Markets, and Consumer Finance subsectors saw position reductions, while Financial Services and Mortgage REITs received increased allocations but remained underweight. At the individual stock level, V and MA exhibit the clearest positioning consensus between mutual funds and hedge funds, while stocks such as WFC, MS, BAC, and AXP show differences across overweight positioning, position increases or reductions, and long or short interest.
Risks
- The report explicitly states that 13-F data are not real-time snapshots of holdings, and the filing lag may result in differences from current actual positions.