Financial stocks to watch in 2022

The four key divisions of Goldman Sachs are investment banking, global markets, asset management, and consumer and wealth management. Its investment banking division includes financial advisory and underwriting services. It also has a high-net-worth retail banking arm offering deposit-taking and loan services through Goldman Sachs’ private bank.

BlackRock is an investment management corporation that is known for being the world’s biggest asset management firm. Its iShares business is also one of the largest ETF issuers globally. BlackRock Solutions, the risk-management division of the firm, includes the Aladdin platform, an end-to-end investment management and operations system.

Founded by Henry Sturgis Morgan (grandson of J.P. Morgan) and Harold Stanley in 1935, Morgan Stanley is a multinational investment bank and financial services firm. It specialises in wealth and investment management, investment banking and capital markets.

These are the four biggest banks in the US by total asset value, and while each might lean more towards retail or investment banking, all have significant operations in both areas.

Citigroup, also known as Citi, is primarily an investment bank, but also has a sizeable consumer business arm, which is one of the world’s largest credit card issuers. Citi’s institutional business includes financial services such as banking, capital markets and advisory, commercial banking, markets and securities services, private banking, and treasury and trade solutions.

While Wells Fargo has a commercial arm, which includes various financial services such as institutional investing and investment banking, its core business lies in its retail banking operations. This includes services such as loans and credit, merchant services, payroll, investing, retirement services, and wealth management for individuals.

Like the rest of the ‘Big Four’, Bank of America is both an investment bank and financial services firm. Bank of America’s subsidiaries include BofA Securities, which is its banking division, and Merrill, which is its wealth management and investment banking division.

JPMorgan Chase is also a multinational investment bank and financial services firm. Its subsidiary, Chase Bank, is the consumer and commercial banking division of the firm, while JP Morgan Securities is its investment management division, which offers services such as wealth planning, brokerage solutions and portfolio management services.

The Hong Kong Shanghai Banking Corporation, also known as HSBC, was founded by Thomas Sutherland in Hong Kong back in 1865. It’s one of the largest banks and financial services organisations in the UK. HSBC Bank substantial retail operations in addition to private banking, consumer finance and investment banking.

Barclays, which offers investment banking and financial services, consists of two divisions: Barclays UK and Barclays International. Barclays UK mainly consists of traditional retail services such as personal banking and its credit card arm, Barclaycard. Barclays International operates investment banking services as well as services aimed at non-UK nationals. The two divisions are supported by Barclays Execution Services.

Based in Germany, Deutsche Bank has operations in more than 70 countries around the globe across Europe, the Americas and Asia. It is primarily an investment bank but also operates in financial services. The firm, founded in 1870, has four main divisions, including an Investment Bank, Corporate Bank, Private Bank and DWS Group, an asset management company.

Credit Suisse is a global investment bank and financial services provider based in Switzerland that was founded in 1865. It has three regionally focused divisions including Swiss Universal Bank, International Wealth Management and Asia Pacific. Credit Suisse also has a separate Asset Management business.

Japanese banking giant Nomura Group is a financial services and global investment bank. It acquired most of the Lehman Brothers’ Asian operations in 2009, becoming one of the world’s largest independent investment banks in the process. It also has subsidiaries such as Nomura Asset Management and Nomura Securities, which is its investment bank business.

Co-founded by Jack Dorsey, co-founder and CEO of Twitter, and Jim McKelvey, an independent director of the Federal Reserve Bank of St Louis, in 2009, Square is an innovative digital payments platform. It offers point-of-sale products such as the Square Reader, which plugs into mobile phones and allows them to read cards, as well as online and over-the-phone payment services. It also allows its Cash App users to buy cryptocurrency.

PayPal facilitates online payments, often by charging online vendors a fee. PayPal was acquired by eBay in 2002, the same year as its IPO, but thirteen years later. eBay spun PayPal out to its shareholders and PayPal became an independent company again. PayPal also allows users in the US to gain cryptocurrency exposure by purchasing coins in their app.

Mastercard’s principal business operation is to process payments from banks and credit unions issuing Mastercard-banded debit, credit, and prepaid cards. Mastercard’s headquarters are appropriately located in Purchase, Harrison in the state of New York.

Like Mastercard, Visa facilitates the electronic transfers of funds for purchases made using its branded debit, credit and prepaid cards. It is considered to be one of the most prestigious stocks of this list, belonging to many blue-chip indices for its services.

American Express is also another major credit card issuer. It is one of the 30 companies listed in the Dow Jones Industrial Average Index. By the end of 2019, the company had issued 54.7m cards in the US and 114.4m globally.

While primarily known as a hardware and technology company, Apple has launched various forays into the financial sector. It launched Apple Pay in 2014, designed to replace what CEO Tim Cook called “outdated” elements of the existing credit card ecosystem. Apple later launched a credit card designed for use on its hardware, Apple Card, in August 2019, with Goldman Sachs acting as the card issuer.

Canadian ecommerce platform Shopify offers a range of services to prospective online vendors and small businesses with online operations. Its services include an online store setup, point-of-sale systems, and email marketing services, among others.

Originally called TransferWise, Wise was founded in London by two Estonian businessmen, Kristo Käärmann and Taavet Hinrikus. Wise is an international money transfer and currency account services business that boasts to be cheaper than “old school banks”. It offers its services to both individual customers and businesses.

Sea is a Singaporean conglomerate that offers ecommerce and digital financial services alongside digital entertainment offerings. Its SeaMoney offerings include payment processing, credit, mobile wallet services and other digital financial services.

The Chinese company’s financial services affiliate, Ant Financial, runs the Alipay payment system that is ubiquitous across China and is the world’s largest mobile payment platform.

The London Stock Exchange’s predecessor, the Royal Exchange, was opened by Queen Elizabeth I of England in 1571. The LSE was founded in 1801 and is based near St Paul’s Cathedral in the City of London. Its Main Market has more than 1,300 large companies from around the world, the largest 100 of which constitute the FTSE 100 stock index. The exchange also operates the Alternative Investment Market (AIM), an international exchange for investment in smaller companies, and secondary markets for securities such as bonds, derivatives, and commodities.

Nasdaq Inc is the parent financial services company that owns the world’s second largest stock exchange. An acronym for ‘National Association of Securities Dealers Automated Quotations’, it was founded in 1971 as the world’s first electronic stock market. In 1998, it became the first US stock market to trade online, and as such attracted a lot of interest during the dot-com bubble. The Nasdaq 100 index is made up of top technology companies in the US.

The New York Stock Exchange (NYSE) is owned by US holding company Intercontinental Exchange, where it is listed. It is the largest stock exchange in the world by far and also one of the oldest in the US, with its origins stretching back as far as the Buttonwood agreement signed in the late 18th century.

CME Group, which is composed of the Chicago Mercantile Exchange, the Chicago Board of Trade, the New York Mercantile Exchange and the Commodity Exchange, is the world’s largest derivatives market. It facilitates trading in currencies, agricultural products, interest rates, energy, metals, stock indices and cryptocurrency futures.

Virtu Financial is one of the world’s largest providers of trading products and market-making services, offering execution, liquidity sourcing, and analytical products. It listed on the Nasdaq in April 2015.

The rise of cryptocurrencies’ popularity led, in 2012, to the founding of what is now the world’s largest cryptocurrency exchange by volume traded: Coinbase. The company used a direct listing to debut on the Nasdaq in April 2021.

The Stock Exchange of Hong Kong, also known as the HKEX, was founded in 1891 and is owned by the Hong Kong Exchanges and Clearing holding company. The stock exchange is one of Asia’s biggest, alongside the Shanghai Stock Exchange.

Multinational Dutch insurance company Aegon focuses predominantly on long-term savings, investments, pension solutions and protection products.

Axa is a French multinational insurance company that has origins dating back to the early 19th century Normandy. It offers personal property and liability insurance, life insurance, and asset management services, among others.

Founded in Munich in 1890, Allianz now serves 100m private and corporate customers across 70 countries. Its key business lines are property and casualty insurance, health and life insurance, asset management and business insurance.

Established in 1848, Prudential is a British multinational insurance company. It provides life and health insurance, as well as retirement, annuities and investment services to individuals, and a variety of other services especially related to employee benefits to advisors, employers, and institutions.

Aviva is a UK-based company specialising in savings, retirement, and insurance services. Its insurance offerings include car, home, life, and health insurance.

Legal & General is one of the UK’s largest life insurance providers with £1.3tn assets under management. It provides retirement solutions to 5.5m businesses and individuals, as well as 5.5m UK customers for life insurance.

Warren Buffett’s famed investment house Berkshire Hathaway launched the Berkshire Hathaway Speciality Insurance company in 2013. Its insurance product lines include commercial property, healthcare professional liability, marine insurance, travel insurance, and accident and health, among many others.

St James’s Place is a wealth management company that offers financial planning services to corporate and individual customers. This covers advice on retirement and pensions, insurance, banking and mortgages, as well as offering a broad range of funds to help diversify a customer’s investment portfolio.

Provident is a sub-prime or ‘doorstep’ lender that specialises in online loans, credit cards and vehicle financing. It carries out its operations through a number of subsidiaries that include Satsuma Loans, Vanquis Bank and Moneybarn.

Monks is a Scottish investment management company that invests primarily in global equities with steady capital growth. Its portfolio of shares includes blue-chip and large-cap stocks and is highly diversified.

KKR is a US global investment company that manages asset classes such as private equity, real estate, infrastructure and credit, while also indirectly managing hedge funds.

ECN is a Canadian financing company that originates, manages and advises on prime credit portfolios. It focuses on three business verticals: home improvement, manufactured housing and credit card and consumer payment.

The Invesco S&P 500 Equal Weight Financial ETF tracks the S&P 500 Equal Weight Financials Index and, therefore, gives investors exposure to the most financially focused major US stocks​. Its holdings include major financial institutions, such as MSCI, Moody’s, S&P Global and Nasdaq Inc.

The Fidelity MSCI Financials ETF also tracks the US financial market but focuses on its active players in terms of revenue, such as JPMorgan Chase, Berkshire Hathaway and Bank of America, more than the institutions that provide the market’s infrastructure.

While US dominance in financials means many major ETFs have a strong US focus, the iShares Global Financials ETF offers investors exposure to the global financial sector, with holdings including Royal Bank of Canada and Commonwealth Bank of Australia.

The SPDR S&P Bank ETF tracks an index that zeroes in on the banking sector of the S&P 500, offering investors targeted exposure to the performance of US banks. While its holdings include giants like Wells Fargo, it also holds smaller, often regionally focused banks, such as Western Alliance Bancorp and First Republic Bank.

Ark Invest gained a reputation for big wins off the back of booming tech stocks in 2020, so Ark funds may be a popular choice for investors that are seeking disruptive, high-growth potential stocks. The ARK Fintech Innovation ETF has holdings such as Square, Shopify and PayPal.