Goldman Sachs just combed through $10 trillion in equity positions and found a surprising overlap between hedge fund and mutual fund portfolios, and the shared favorites reveal a clear conviction about where institutional money expects the biggest returns.
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Whether your investments are in the hedge fund or mutual fund arena, one thing is for sure: it’s a good bet that the portfolio managers are fond of many of the same stocks. Goldman Sachs just published its Hedge Fund Trend Monitor and Mutual Fund Fundamentals reports, which analyzed $10 trillion in equity positions at the start of the third quarter of 2026. The report had this to say about the overall performance of the two:
Hedge fund portfolios remain closely tied to the AI trade while mutual funds are underweight the complex. The returns of hedge funds and their most popular holdings have been closely correlated with swings in the AI trade during the last few months. The weight of AI infrastructure stocks in mutual fund portfolios has risen sharply this year. Still, it has failed to keep pace with benchmark weights, leaving mutual funds significantly underweight the complex. Outside of AI, hedge funds and mutual funds generally agree on sector tilts. While hedge funds are not benchmarked, comparing their net sector positions to the Russell 3000 reveals tilts similar to mutual fund portfolios. Both groups carry large overweights in Health Care and large underweights in TMT. The most notable area of disagreement is in the consumer sectors, where hedge funds are overweight in Consumer Discretionary and underweight in Consumer Staples. In contrast, mutual funds hold the opposite tilts.
What we found interesting was the list of stocks Goldman Sachs held that were “shared favorites” of the two investment vehicles. Interestingly, four of the six were large-cap financial stocks that pay dividends. Two were popular money-center banks, and two were among the world’s largest credit card companies.
Here are the four financials that hedge fund and mutual fund portfolio managers share as favorites. Notably, Goldman Sachs rates all four companies a Buy.
Bank of America
While Warren Buffett has trimmed his position significantly over the past two years, this quality financial giant remains an exceptional long-term holding with a solid 1.74% dividend yield. The dividend was raised from $0.26 to $0.28, then to $0.32 per quarter, with two increases over the past 12 months. Bank of America (NYSE:BAC | BAC Price Prediction) is a bank holding company and financial holding company that reported impressive Q2 results.
Its segments include:
- Consumer Banking
- Global Wealth & Investment Management (GWIM)
- Global Banking
- Global Markets
Consumer Banking segment offers a range of credit, banking, and investment products and services to consumers and small businesses.
Two businesses comprise GWIM:
- Merrill Wealth Management offers tailored solutions to meet clients’ needs through a comprehensive suite of investment management, brokerage, banking, and retirement products.
- Bank of America Private Bank provides comprehensive wealth management solutions.
The Global Banking segment offers a range of lending-related products and services, including integrated working capital management and treasury solutions, as well as underwriting and advisory services. The Global Markets segment offers sales and trading services, as well as research services, to institutional clients across fixed income, credit, currency, commodity, and equity markets.
Goldman Sachs has a $74 target price.
Capital One Financial
The well-known banking giant has significant upside potential to the Goldman Sachs target. Capital One Financial (NYSE:COF) is a diversified financial services holding company with banking and non-banking subsidiaries. It offers a wide range of financial products and services to consumers, small businesses, and commercial clients through multiple channels.
It operates through three segments:
- The Credit Card segment comprises domestic consumer and small business card lending, as well as international card businesses in the United Kingdom and Canada.
- The Consumer Banking segment includes deposit gathering and lending activities for consumers and small businesses, as well as national auto lending.
- The Commercial Banking segment provides treasury management services to commercial real estate and commercial and industrial customers.
Its principal operating subsidiary is Capital One, National Association, which offers banking products and financial services.
Goldman Sachs has a target price of $247.
Mastercard
The credit card giant remains a top holding for both hedge funds and mutual funds and pays a 0.59% dividend. Mastercard (NYSE:MA) is a technology company in the global payments industry. It connects consumers, financial institutions, merchants, governments, digital partners, businesses, and other organizations worldwide by enabling electronic payments and making those transactions secure and accessible.
Mastercard provides a range of payment solutions and services using its brands, including Mastercard, Maestro, and Cirrus.
The company operates a payments network that provides choice and flexibility for consumers, merchants, and their customers. Through its proprietary global payments network, it authorizes, clears, and settles payment transactions. Its additional payments capabilities include automated clearing house (ACH) transactions (both batch and real-time account-based payments). It offers security solutions, consumer acquisition and engagement, business and market insights, gateway, processing, and open banking, among other services.
The Goldman Sachs price target for the stock is $701.
Visa
Coincidentally, Berkshire Hathaway CEO Greg Abel closed the entire holdings of Visa and Mastercard in the first quarter of 2026. Visa (NYSE:V) is a global payments technology company that pays a small 0.74% dividend. It facilitates global commerce and money movement across more than 200 countries and territories for consumers, merchants, financial institutions, and government entities through its technologies.
It operates through the Payment Services segment and provides transaction processing services (primarily authorization, clearing, and settlement) to its financial institution and merchant clients through VisaNet, its proprietary advanced transaction processing network.
The company offers a range of Visa-branded payment products that its clients, including nearly 14,500 financial institutions, use to develop and offer payment solutions or services, including credit, debit, prepaid and cash access programs for individual, business and government account holders.
Visa also provides value-added services to its clients, including issuing solutions, acceptance solutions, risk and identity solutions, open banking solutions and advisory services.
Goldman Sachs has set its target price at $438.
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