5 Biggest Stocks that Benefit from Rising Interest Rates

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 97

Bank of America Corporation (NYSE:BAC) is a North Carolina-based diversified financial services firm.

Bank of America Corporation (NYSE:BAC) has been shortlisted as one of the favorite stocks by the leading publication Barron’s for 2023. Bank of America Corporation (NYSE:BAC) is seeing its interest income rise from issuing new loans at higher interest rates. This is also countering the decline in revenue from a reduction in investment banking activities. The company holds a significant portion of consumer deposits compared to its industry peers and is more sensitive toward changes in interest rates. Bank of America Corporation (NYSE:BAC) has one of the most extensive consumer banking networks in the US.

Here’s what Ariel Investments said about Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”