The financial services sector has entered 2025 on a wave of strong performance and renewed investor interest. This sector consists of banking, payments, insurance, and asset management and is a cornerstone of the global economy.
These stocks didn’t do too well during the 2022 downturn, as there was uncertainty regarding whether or not the Federal Reserve would bail out regional banks. However, after the “mini banking crisis” calmed down, these stocks have performed quite well despite the macro trends being uncertain. And for some stocks, that momentum has been even stronger so far this year. It’s worth looking at why.
Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified 15 Real Estate Stocks that are up the Most in 2025 in another article.
A close up of a person’s hands interacting with a digital financial asset tracker.
Methodology
For this article, I screened the best-performing financial services stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15. Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA)
Number of Hedge Fund Holders In Q4 2024: 12
Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is a Spanish multinational financial services group that provides retail banking, corporate lending, asset management, and investment advisory services across Europe, Latin America, and Turkey.
The stock is up significantly so far in 2025, primarily because of a blowout first quarter, where net attributable profit jumped 23% year-over-year to €2.7 billion, return on equity hit 19.3%, and earnings per share rose 24% to €0.45.
Revenue and earnings both beat analyst expectations, with revenue up 3.9% and profit margin expanding from 29% to 34%. The bank’s tangible book value per share plus dividends increased by 14.1% year-over-year, and loan growth was especially strong, up 15.1% at the group level, with Mexico and Spain leading the way.
Management has emphasized that, while results are strong, they are not upgrading 2025 guidance due to ongoing uncertainty around US tariffs and their impact on Mexico, BBVA’s largest profit center.
BBVA stock is up 46.59% year-to-date.
14. ASA Gold And Precious Metals Ltd (NYSE:ASA)
Number of Hedge Fund Holders In Q4 2024: 7
ASA Gold And Precious Metals Ltd (NYSE:ASA) is a closed-end investment fund that seeks long-term capital appreciation by investing primarily in companies engaged in the exploration, development, or mining of gold, silver, platinum, diamonds, and other precious minerals.
The stock has rallied sharply in 2025. The main driver behind this surge has been the significant rise in gold prices, which has boosted the net asset value of ASA’s portfolio and led to a net increase in unrealized appreciation. Net assets reached $523.7 million, and net asset value per share climbed to $27.69.
Another catalyst was the adoption of a limited-duration shareholder rights plan in March 2025, following a court battle with Saba Capital Management, which was attempting to gain control of the fund. The court ruling and the board’s defensive actions reassured shareholders and contributed to the positive momentum. Additionally, ASA’s portfolio is heavily weighted toward small and mid-cap miners, which have benefited from a surge in merger and acquisition activity in the gold sector, as well as from elevated gold prices.
ASA stock is up 48.27% year-to-date.
13. Itau Unibanco Holding SA (NYSE:ITUB)
Number of Hedge Fund Holders In Q4 2024: 23
Itau Unibanco Holding SA (NYSE:ITUB) is Brazil’s largest private sector bank, offering a wide range of financial services including retail and commercial banking, asset management, and insurance across Latin America and beyond.
The stock is up significantly so far in 2025 due to the announcement of a new stock buyback program and a massive R$15 billion distribution to shareholders, including both dividends and interest on capital, with payments scheduled for March 2025.
The board also approved a substantial R$33.33 billion increase in subscribed and paid-in capital, using revenue reserves, which further strengthened the bank’s capital base and investor confidence.
Itau Unibanco’s 2025 financial guidance projects total credit portfolio growth of 4.5% to 8.5% and a financial margin with clients expected to rise by 7.5% to 11.5%.
The consensus price target of $6.27 implies 0.43% downside.
ITUB stock is up 48.39% year-to-date.
12. Lloyds Banking Group PLC (NYSE:LYG)
Number of Hedge Fund Holders In Q4 2024: 11
Lloyds Banking Group PLC (NYSE:LYG) is the United Kingdom’s largest retail and commercial bank, providing a broad range of financial services including mortgages, loans, insurance, and wealth management under brands like Lloyds Bank, Halifax, and Bank of Scotland.
The stock’s strong performance in 2025 has been driven by resilient financial results and optimism about the UK economy. In its Q1 2025 results, Lloyds reported net income up 4% year-over-year, with statutory profit after tax at £1.1 billion.
A major catalyst for the stock’s rise this year has been the UK’s economic resilience, with moderating inflation and wage growth outpacing price increases, which has supported demand for mortgages and consumer finance. The stabilization of the UK housing market and expectations for potential Bank of England rate cuts later in 2025 have also contributed to positive sentiment.
LYG stock is up 49.54% year-to-date.
11. Old Point Financial Corp (NASDAQ:OPOF)
Number of Hedge Fund Holders In Q4 2024: 2
Old Point Financial Corp (NASDAQ:OPOF) is a community-focused bank holding company headquartered in Hampton, Virginia, offering retail and commercial banking, wealth management, mortgage, and insurance services through its subsidiaries and branches in the Hampton Roads region.
The stock is up significantly so far in 2025. It is almost entirely due to the announcement on April 3, 2025, that Old Point will merge with TowneBank. Under the merger agreement, Old Point shareholders can elect to receive either $41.00 in cash or 1.14 shares of TowneBank stock per Old Point share, valuing the transaction at approximately $203 million.
This deal implies a significant premium to Old Point’s pre-announcement share price and immediately drove the stock up by more than 40% in a single session, well above the 5% threshold.
The merger is expected to create a stronger platform for growth and enhanced value for shareholders, customers, and employees. In its Q1 2025 results, Old Point reported net income of $2.2 million, up 26% year-over-year, with modest growth in assets and deposits. However, the financial results were overshadowed by the merger news, which is the clear and overwhelming reason for the stock’s surge in 2025.
OPOF stock is up 49.73% year-to-date.
10. Ohio Valley Banc Corporation (NASDAQ:OVBC)
Number of Hedge Fund Holders In Q4 2024: 3
Ohio Valley Banc Corporation (NASDAQ:OVBC) operates as the bank holding company for The Ohio Valley Bank Company, providing commercial and consumer banking, mortgage, and financial services in southern Ohio and western West Virginia.
The stock has soared in 2025, primarily on the back of its Q1 2025 earnings report released in late April. OVBC reported net income of $4.4 million, a 57.8% increase from the prior year, with earnings per share jumping to $0.94 from $0.58.
The company’s return on average assets rose to 1.20%, and return on average equity reached 11.82%. The surge in profitability was driven by a $1.95 million increase in net interest income, which resulted from growth in average earning assets and improved net interest margin.
A key factor behind the asset and deposit growth was participation in the Ohio Homebuyer Plus program, which brought in $7.7 million in new accounts and $82 million in deposits from the Ohio Treasurer at subsidized rates. OVBC also announced a dividend increase to $0.23 per share.
OVBC stock is up 52.92% year-to-date.
9. Deutsche Bank AG (NYSE:DB)
Number of Hedge Fund Holders In Q4 2024: 15
Deutsche Bank AG (NYSE:DB) is a leading global financial services provider offering corporate banking, investment banking, private banking, and asset management services to clients worldwide.
The primary reason the stock has surged in 2025 is the bank’s exceptional first-quarter results, which showed a 39% year-over-year increase in profit before tax, reaching €2.8 billion. This was driven by 10% growth in net revenues and a 2% decline in noninterest expenses.
The bank’s return on tangible equity rose to 11.9%, and the cost/income ratio improved to 61.2%, both in line with or exceeding 2025 targets. These results, announced on April 29, 2025, led to a sharp rally in the stock as investors responded to the clear demonstration of successful cost discipline and revenue growth across all business segments.
DB stock is up 53.72% year-to-date.
8. Banco Santander SA (NYSE:SAN)
Number of Hedge Fund Holders In Q4 2024: 17
Banco Santander SA (NYSE:SAN) is a global retail and commercial bank headquartered in Spain, serving 175 million customers across Europe and the Americas.
The stock’s strong performance in 2025 is primarily due to record first-quarter results, with attributable profit rising 19% to €3.4 billion and earnings per share up 26%. This surge was driven by record net fee income, lower costs, and continued growth in customer numbers, as well as a favorable comparison to the previous year’s temporary Spanish banking levy, which was much lower in 2025.
The bank reaffirmed its 2025 targets. This included a return on tangible equity above 15.8% and robust shareholder returns, which have included substantial share buybacks and cash dividends.
A major catalyst was the February 2025 announcement of a €10 billion share buyback plan, which, together with record fourth-quarter 2024 profits, caused the stock to jump over 7% in a single session. The bank’s guidance for 2025 targets €62 billion in revenue and mid-to-high single-digit net income growth
SAN stock is up 55.94% year-to-date.
7. Heritage Insurance Holdings Inc (NYSE:HRTG)
Number of Hedge Fund Holders In Q4 2024: 16
Heritage Insurance Holdings Inc (NYSE:HRTG) provides personal and commercial residential insurance products across several US states, focusing on catastrophe-prone regions.
The stock is up significantly so far in 2025 as the company reported a strong fourth quarter in 2024, with net income exceeding $18.9 million despite significant catastrophe losses from Hurricane Milton, and it managed to keep loss ratios in check due to lower-than-expected non-catastrophe claims.
In March 2025, Heritage reported a full-year net income of $61.5 million, up from $45.3 million in 2023, driven by premium growth, improved underwriting, and disciplined expense management.
The consensus price target of $12.5 implies 33.86% downside.
HRTG stock is up 56.20% year-to-date.
6. Inter & Co Inc (NASDAQ:INTR)
Number of Hedge Fund Holders In Q4 2024: 12
Inter & Co Inc (NASDAQ:INTR) is a Brazil-based digital financial super app that provides banking, investment, insurance, and digital commerce services to over 36 million customers across the Americas.
The stock has surged in 2025 primarily because the company reported its highest-ever net income of R$973 million for 2024, which was three times greater than the prior year. This record performance was driven by a 35% year-over-year increase in total net revenue to R$6.4 billion and robust growth in active clients and engagement across its platform.
Q4 2024 results showed a net interest margin of 9.7% and a return on equity of 11.7%, with asset quality metrics improving despite a challenging macro environment.
. Another material event was the announcement on April 30, 2025, of a R$500 million subordinated debt issue to strengthen capital adequacy. This is expected to boost the Basel Ratio by about one percentage point and further solidify the company’s financial standing.
The consensus price target of $6.78 implies 2.42% upside.
INTR stock is up 59.24% year-to-date.
5. Better Home & Finance Holding Co (NASDAQ:BETR)
Number of Hedge Fund Holders In Q4 2024: 9
Better Home & Finance Holding Co (NASDAQ:BETR) is a digitally native homeownership company in the United States that offers mortgages, home equity products, and related real estate services, leveraging technology and AI to streamline the process.
The stock’s strong performance in 2025 is mainly due to the company’s significant operational turnaround and aggressive cost management. In March 2025, Better reported full-year 2024 revenue of $108 million, up 50% year-over-year, and a net loss of $206 million, which was a dramatic improvement from a $536 million loss in 2023. Funded loan volume grew 19% to $3.6 billion, with especially strong growth in purchase, refinance, and home equity products.
In April 2025, Better announced a $25 million share repurchase program, signaling management’s confidence in the company’s valuation and future prospects.
BETR stock is up 60.99% year-to-date.
4. X Financial (NYSE:XYF)
Number of Hedge Fund Holders In Q4 2024: 3
X Financial (NYSE:XYF) is a leading Chinese online personal finance company that provides unsecured credit, home equity loans, and wealth management services through its Xiaoying platform.
The stock is up significantly so far in 2025 because of outstanding earnings growth and a low valuation relative to peers.
In March 2025, X Financial reported that full-year 2024 revenue hit a record 5.9 billion RMB, up 22% year-over-year, and Q4 net income surged 104% to 386 million RMB.
Over the last three years, earnings per share grew an astonishing 6,235%, and the company’s price-to-earnings ratio remains far below the sector average.
XYF stock is up 67.83% year-to-date.
3. Root Inc (NASDAQ:ROOT)
Number of Hedge Fund Holders In Q4 2024: 16
Root Inc (NASDAQ:ROOT) is a technology-driven insurance company that offers automobile and renters insurance products in the United States, leveraging data science and mobile telematics to personalize pricing and risk assessment.
The main catalyst behind ROOT’s sharp rise in 2025 has been its exceptional revenue growth and a series of earnings surprises. In its most recent quarter, Root reported revenue of $326.7 million, which beat estimates, and posted net income of $22.1 million, far surpassing analyst expectations and continuing a trend of strong performance.
This solid financial performance has led to a 28% jump in the stock price in March alone, and a 187% increase over the past year, as investors have grown increasingly confident in the company’s ability to outpace industry growth.
The consensus price target of $112.67 implies 19.33% downside.
ROOT stock is up 92.41% year-to-date.
2. Patriot National Bancorp Inc (NASDAQ:PNBK)
Number of Hedge Fund Holders In Q4 2024: N/A
Patriot National Bancorp Inc (NASDAQ:PNBK) is the holding company for Patriot Bank, N.A., providing community banking services, including consumer and commercial loans, deposit accounts, and digital banking to individuals and businesses in Connecticut and New York.
The most significant event behind PNBK’s stock surge in 2025 was the completion of a $57.75 million private placement on March 20, 2025, where the company issued over 60 million shares of common stock at $0.75 per share and introduced a new Series A Non-Cumulative Perpetual Convertible Preferred Stock.
This recapitalization, which also included the conversion of $7 million in notes to equity, was executed under Nasdaq’s “financial viability exception” to shore up the bank’s capital base after a period of losses and to maintain its listing.
PNBK stock is up 112.11% year-to-date.
1. Cantor Equity Partners Inc (NASDAQ:CEP)
Number of Hedge Fund Holders In Q4 2024: 10
Cantor Equity Partners Inc (NASDAQ:CEP) is a special purpose acquisition company (SPAC) that seeks to merge with or acquire businesses in sectors like financial services, technology, and healthcare, but currently has no significant operations.
The overwhelming reason for CEP’s meteoric rise in 2025 is its announced merger with Twenty One Capital, a bitcoin-focused company, in a deal valued at $3.6 billion.
News of the merger sent CEP shares soaring by 58% on the day of the announcement, with subsequent gains of 41% and additional surges of 16% and 19% in the following days as investor excitement around the company’s pivot into blockchain and cryptocurrency intensified.
CEP stock is up 302.12% year-to-date.
While we acknowledge the potential of CEP, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CEP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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