Should investors back financials in 2026?

By Joss Murphy on 22 January 2026 in Specialist investing

The financials sector may be crucial to the global economy – but does it make sense for investors to have exposure in 2026? Banks, insurance companies, fund managers, credit card providers and stock exchanges all play vital roles in keeping money moving. But what key themes will drive the sector this year?

Trends shaping financial stocks in 2026

Banks are likely to enter 2026 on a relatively strong footing after resilient earnings during most of last year, according to Deloitte’s 2026 banking and capital markets outlook*. Banks are increasingly forming strategic partnerships with fintech companies in Brazil, Hungary, India, Kenya and other areas. This means they’re more likely to enhance operational efficiency, improve customer experience and foster innovation.

Banking customers place a high value on diversification, including alternative investments such as digital assets, according to Cap Gemini**. “That’s why banks are now expanding their advisory services and digital platforms to offer access to new investment opportunities,” it stated.

Five funds for financials exposure

Janus Henderson Global Financials

This fund scours the globe for attractively-valued companies with a competitive advantage. The result is a concentrated portfolio of 40-60 holdings. We believe it provides a compelling opportunity for investors to access this dynamic sector thanks to its disciplined, research-driven approach.

Banks account for almost 43% of the fund’s assets, followed by 23.69% in investment banks & brokers and 15.70% in non-life insurance firms***. John Jordon, the experienced manager, believes there are “significant opportunities” in European banks and expects secular growth themes to continue delivering.

“This includes areas such as electronic payments and banks and insurers in countries where financial products are less penetrated, and thus there is a longer potential runway for growth,” he said. John also believes firms with proprietary data and strong technology capabilities can leverage AI to better serve their existing customers and attract new customers.

Polar Capital Global Insurance

When you consider that virtually everything in our world is insured in some way, investing in a fund like this makes a lot of sense. Global insurance premiums are predicted to grow by 2.3% annually in real terms, with life insurance premiums to be on track to reach $4.1 trillion by 2027^.

Lead manager Nick Martin has years of industry experience, and we believe this is one of the reasons for the fund’s strong return profile. Commercial, retail, reinsurance, and insurance brokers are the fund’s main sub-sectors, while it’s heavily exposed to the US geographically. The largest individual holding is the 9.7% in RenaissanceRe^, a global property and casualty reinsurer based in Bermuda but with offices around the world.

In an interview, Nick suggested that insurance demand would rise due to increased risks associated with climate change and geographic uncertainty. “It is pretty disconnected to what’s going on in the broader macro,” he said. “You don’t need healthy economic growth to drive insurance revenues higher, so it marches to a bit of a different beat.”

Morgan Stanley Global Brands

Financials is currently the most prominent sector in this fund, accounting for 22.86% of assets under management^.  This includes prominent names such as Visa, the payment provider; insurance broker Arthur J. Gallagher; and Intercontinental Exchange, which operates financial markets and clearinghouses.

The aim of this fund, which focuses on long-term capital preservation, is to find high-quality companies with defensible and visible future earnings. We like its high concentration of 25 to 30 holdings, as well as the fact that more than half of its assets are in the top 10 names. This shows real conviction.

In the fund’s latest commentary, the managers argued that many of the companies they owned were being punished because markets viewed them as at risk from advanced AI disruption. “We believe companies such as MSCI, S&P Global, RELX and Experian are not only likely to be robust against the advanced AI threat but should actually be long-term beneficiaries,” it stated.

IFSL Evenlode Global Equity

This is another global equity fund that has substantial exposure to financial services companies. In fact, a quarter of its assets are invested in this sector. Payment providers MasterCard and Visa, data firm Experian and the London Stock Exchange Group are among its most prominent individual holdings^.

The management team’s success is down to its clear, proven investment process and in-house software system, ‘Eddie’, which helps it find high-quality, cash-generative companies. The fund, which aims to provide capital growth over periods of at least five years, is concentrated with 30-50 names and boasts a low portfolio turnover.

Recently, the managers gave an upbeat assessment of the fund’s prospects over the coming year:

Lazard Global Equity Franchise fund

Our final broader international equity fund’s aim is to provide long-term, defensive returns by investing globally in a range of companies with predictable earnings and competitive advantages. As the fund is differentiated by the managers’ systematic approach to portfolio construction, behavioural biases should be removed.

Currently, financials is the most prominent sector in the fund with a 22.9% share of assets under management, ahead of consumer discretionary and health care. Its 10 largest holdings, meanwhile, include Nexi, an Italian provider of digital payment solutions, and Fiserv, a US financial technology firm^^.

According to the managers’ latest review, market volatility is likely to persist, underscoring the importance of “cautious, value-oriented” stock selection. They wrote: “The Global Equity Franchise portfolio holds market leaders and monopolies with more predictable long -term earnings than the broader market, along with reasonable valuations.”

*Source: Deloitte Center for Financial Services, 20 October 2025

**Source: CapGemini Research Institute, Banking top trends 2026

***Source: fund factsheet, 31 December 2025

^Source: Swiss Re Group, 19 November 2025

^^Source: Q4 2025 Strategy Review