10 Finance Stocks to Buy During Interest Rate Hikes

Published March 28, 2022 at 2:43 pm EDT Updated August 19, 2026 at 7:44 am EDT

In this article, we discuss the 10 finance stocks to buy during interest rate hikes.

Hedge fund billionaires and analysts on Wall Street have over the past few weeks issued multiple warnings about an impending doom for the stock market. On March 23, Carl Icahn, the billionaire chief of Icahn Capital LP, told news platform CNBC that there “very well could be a recession or even worse” as consumers battle inflation and the market deals with the fallout of the Western sanctions on Russia in the wake of the Ukraine war. On March 11, Goldman Sachs had downgraded the growth outlook for the US economy in 2022 by 25 basis points to 1.75%.

In February, the inflation rate in the US had reached close to 8%, a high last seen almost four decades ago. Compared to the economic crisis of 2007 and 2008, where the inflation rate had hovered around 2.8% to 3.8%, there are larger risks that the Federal Reserve will soon have to raise interest rates higher to tame inflation, ultimately weakening the economy. Fed chief Powell has already signaled that the central bank is prepared to do that this year. A massive bubble in tech stocks could complicate matters further.

John Weinberg, a veteran of the Federal Reserve Bank of Richmond, told news publication Fortune in March that the markets have not seen a “monetary policy-induced recession” in decades, making it difficult to predict the trajectory they might take as rates keep on rising. In this context, finance stocks may be the safest bets for investors. Some of the top finance stocks to buy during interest rate hikes include Berkshire Hathaway Inc. (NYSE:BRK-B), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C), among others discussed below.

Photo by Ferran Fusalba Roselló on Unsplash

Our Methodology

The companies that operate in the finance sector and have been on the radar of market experts as interest rates rise were selected for the list. Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.

Finance Stocks to Buy During Interest Rate Hikes

10. The PNC Financial Services Group, Inc. (NYSE:PNC)

Number of Hedge Fund Holders: 40

The PNC Financial Services Group, Inc. (NYSE:PNC) is a diversified financial services firm. Elite hedge funds hold bullish positions in the stock. At the end of the fourth quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $663 million in The PNC Financial Services Group, Inc., compared to 41 in the previous quarter worth $506 million.

On February 3, JPMorgan analyst Vivek Juneja kept an Overweight rating on The PNC Financial Services Group, Inc. stock and raised the price target to $232.50 from $229.50, noting that higher interest rates will be the main driver of the earnings for the bank followed by better loan growth in the near-term.

Just like Berkshire Hathaway Inc., JPMorgan Chase & Co., and Citigroup Inc., The PNC Financial Services Group, Inc. is one of the stocks that investors are buying as inflation rises.

9. BlackRock, Inc. (NYSE:BLK)

Number of Hedge Fund Holders: 49

BlackRock, Inc. (NYSE:BLK) operates as an investment manager. On February 18, Deutsche Bank analyst Brian Bedell maintained a Buy rating on the stock with a price target of $1,024, underlining that the outlook for “rate-sensitive” stocks like BlackRock remained bright based on the Fed’s forecast on rate increases through 2022.

Hedge funds have been loading up on BlackRock, Inc. stock. At the end of the fourth quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in BlackRock, Inc., compared to 44 the preceding quarter worth $1 billion.

In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and BlackRock, Inc. was one of them. Here is what the fund said:

“During the quarter, we initiated a position in BlackRock, Inc., the world’s largest investment manager with $9 trillion in assets under management. BlackRock offers an array of products across equities, fixed income, alternatives, and cash management to institutional and retail investors worldwide. About one-quarter of BlackRock’s assets under management is actively managed, and the rest is in passive index funds and iShares-branded ETFs. The company offers technology services including the investment and risk management platform, Aladdin, as well as other advisory services and solutions. Over the five years ending December 31, 2020, assets under management and earnings per share grew at compound annual growth rates of 13% and 12%, respectively.

We believe BlackRock, Inc. is well positioned for continued growth given its diverse product offering, global distribution, brand recognition, and capable management team. With most of its assets in index funds and ETFs, BlackRock is a prime beneficiary of the ongoing shift to passive investing. The company also benefits from increasing demand for sustainable investment strategies and “barbell” strategies that use a combination of low-cost index funds, active and illiquid alternatives products. BlackRock, Inc. fits squarely within our Tech-Enabled Financials theme given its longstanding commitment to innovation and proprietary technology platform, Aladdin, which serves as the investment and risk management system for both BlackRock and a growing number of institutional investors around the world. We expect BlackRock’s earnings per share will continue to grow at a double digit annual rate over a market cycle through a combination of mid-single-digit growth in assets under management from net inflows, market appreciation, low to mid-teens revenue growth in technology services, modest margin expansion, and share repurchases.”

8. SVB Financial Group (NASDAQ:SIVB)

Number of Hedge Fund Holders: 47

SVB Financial Group (NASDAQ:SIVB) is a diversified financial services firm. Major hedge funds hold large stakes in the company. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in SVB Financial Group with 595,771 shares worth more than $404 million.

On March 21, Wells Fargo analyst Jared Shaw kept an Overweight rating on SVB Financial Group stock with a price target of $810, backing the firm to deliver “industry-leading” growth in the coming months as the market settles down.

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and SVB Financial Group was one of them. Here is what the fund said:

“Among our top contributors was SVB Financial Group. SVB Financial Group is a leading provider of banking services to the innovation economy across the US and in key international markets. Headquartered in Silicon Valley, SVB Financial Group offers financial products to clients in the technology, life science/health care and private equity/venture capital. Total client funds increased 51% to $243 billion in 2020—one of the company’s strongest years—as investors seek differentiated returns in innovative private companies. SVB’s high level of client service and long experience in the industry give it not only a historical data and knowledge advantage, but also a reputational edge. We believe this enables SVB Financial Group to quickly bring products to market and make speedy underwriting decisions. Given SVB’s strong profit growth comes at a time when net interest margins are depressed, we believe shares are priced attractively and added to our position.”

7. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 64

American Express Company (NYSE:AXP) provides payment and travel products. On March 17, Bank of America analyst Mihir Bhatia maintained a Buy rating on the stock and raised the price target to $206 from $204, noting there was upside potential in the stock as earnings visibility and investor sentiment improved.

American Express Company is one of the favorite payment stocks in the finance world. Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in American Express Company with 15.7 million shares worth more than $2.5 billion.

In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company was one of them. Here is what the fund said:

“In financials, American Express Company has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”

6. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 65

Morgan Stanley (NYSE:MS) provides financial products and services. At the end of the fourth quarter of 2021, 65 hedge funds in the database of Insider Monkey held stakes worth $4.5 billion in Morgan Stanley, the same as in the preceding quarter worth $4.9 billion.

On January 3, Barclays analyst Jason Goldberg kept an Overweight rating on Morgan Stanley stock and raised the price target to $123 from $110, underlining that bank stocks were expected to outperform the wider market in 2022 as loan growth accelerated and net interest margins improved.

Alongside Berkshire Hathaway Inc., JPMorgan Chase & Co., and Citigroup Inc., Morgan Stanley is one of the stocks on the radar of hedge funds as interest rates rise.

In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Morgan Stanley was one of them. Here is what the fund said:

“Top three contributor Morgan Stanley, a leading global financial services company, came into the portfolio in Q4 as a result of its purchase of E*TRADE. E*TRADE is a great fit on Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked Morgan Stanley’s business by adding less volatile fee streams and deemphasizing the risk-obtuse culture of prior management. We believe the market will come to appreciate this mix shift over time.”

5. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 84

Bank of America Corporation (NYSE:BAC) provides banking and financial products. Hedge funds have been loading up on the stock as interest rates rise. At the end of the fourth quarter of 2021, 84 hedge funds in the database of Insider Monkey held stakes worth $47 billion in Bank of America Corporation, compared to 72 in the previous quarter worth $46 billion.

On February 3, JPMorgan analyst Vivek Juneja kept an Overweight rating on Bank of America Corporation stock and raised the price target to $53.5 from $52.5, highlighting “higher rates, the recovery in consumer spending and loan growth” as catalysts for the stock.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation was one of them. Here is what the fund said:

“Higher long-term interest rates supported financials such as Bank of America Corporation, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America Corporation announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”

4. The Goldman Sachs Group, Inc. (NYSE:GS)

Number of Hedge Fund Holders: 75

The Goldman Sachs Group, Inc. (NYSE:GS) provides a range of financial services. On February 17, the company boosted targets on return-on-investment, assets, and wealth management, outlining that it expected the wealth management business to grow at a compound annual growth rate of 12% this year.

The Goldman Sachs Group, Inc. remains one of the top finance stocks in the hedge fund universe. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in The Goldman Sachs Group, Inc. with 3.5 million shares worth more than $1.3 billion.

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and The Goldman Sachs Group, Inc. was one of them. Here is what the fund said:

“Financial services firm The Goldman Sachs Group, Inc. is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, The Goldman Sachs Group, Inc. is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”

3. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 97

Citigroup Inc. is a diversified financial services firm. Hedge funds have been piling into the stock as inflation rises. At the end of the fourth quarter of 2021, 97 hedge funds in the database of Insider Monkey held stakes worth $6.6 billion in Citigroup Inc., compared to 79 the preceding quarter worth $5.5 billion.

On March 14, Wells Fargo analyst Mike Mayo kept an Overweight rating on Citigroup Inc. stock with a price target of $70. The company has expanded an exit from Russia in recent weeks as the US places sanctions on Moscow for the Ukraine invasion.

In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. was one of them. Here is what the fund said:

“We fully exited position in Citigroup Inc.. Global financial services company Citigroup Inc. made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”

2. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 107

JPMorgan Chase & Co. is a financial services firm. The bank has an impressive dividend history stretching back more than two decades. It has increased the payout consistently over the past nine years. On March 15, it declared a quarterly dividend of $1 per share, in line with previous. The forward yield was 3.02%.

Elite hedge funds hold large stakes in JPMorgan Chase & Co.. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. with 7.4 million shares worth more than $1.1 billion.

In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. was one of them. Here is what the fund said:

“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan Chase & Co. and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan Chase & Co. and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”

1. Berkshire Hathaway Inc. (NYSE:BRK-B)

Number of Hedge Fund Holders: 108

Berkshire Hathaway Inc. is a conglomerate with interests in the insurance, freight rail transportation, and utility businesses. The hedge fund sentiment around the stock is largely positive. At the end of the fourth quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $19.3 billion in Berkshire Hathaway Inc., compared to 106 in the preceding quarter worth $19.4 billion.

On March 21, Berkshire Hathaway Inc. announced that it had agreed to purchase investment holding firm Alleghany in a deal worth around $11.6 billion. In the past six months, the stock has returned nearly 25% to shareholders in an otherwise volatile marketplace.

In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. was one of them. Here is what the fund said:

“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway Inc.. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway Inc. has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”

You can also take a peek at Why These 10 Stocks Are Trending on Monday and 10 ETFs to Buy and Hold for the Next 10 Years.

We may use your email to send marketing emails about our services. Click here to read our privacy policy.

Follow Insider Monkey on Twitter