Portfolio Manager Insights

Targeting strong banks built to weather financial storms

Macroeconomic uncertainty may persist for the foreseeable future, but Fidelity’s Gerry Benson believes certain banks may be well-positioned to navigate a range of market and economic environments through the cycle.

By: Gerry Benson
Updated: 9/28/2026
  • By focusing on strong deposit franchises, healthy balance sheets and capital generation, disciplined lending practices, and diversified fee-based income streams, Fidelity Portfolio Manager Gerry Benson is favoring banks designed to perform through full economic cycles, not just favorable periods.
  • “Banks tend to rise and fall with the broader economy, making them especially sensitive in uncertain times,” explains Benson, who manages Fidelity Advisor® Financials Fund. “While this sensitivity is unavoidable, we believe an emphasis on resilience can help support long-term outcomes.”
  • In leading the equity sector strategy, Benson seeks high-quality financial companies that he believes have the potential to deliver attractive growth and risk-adjusted return opportunities, as well as improving businesses that may be underappreciated by the market.
  • Of course, he also stays closely attuned to the broader investment landscape, which, at the start of 2026, appeared relatively calm. By the end of March, however, Benson notes that market conditions had become more volatile. Stocks reflected rising uncertainty, and investors began repositioning for a potentially more challenging environment.
  • “While geopolitical developments, including the U.S.-Israel conflict with Iran, may have accelerated this shift,” Benson says, “it’s important to understand that concerns had been building earlier amid rising global tensions and mixed economic signals.”
  • With banks exposed to these crosscurrents, Benson has sought to position the fund for a potentially less hospitable environment, while remaining consistent with a longstanding approach to evaluating and investing in lenders.
  • Fund holdings as of July 31 that fit this mold well include Wells Fargo, according to Benson, who notes that the firm has returned to growth mode following the lifting of a seven-year asset cap in June 2025. As a result, he believes the company is better positioned to pursue lending opportunities while leveraging its existing franchise strengths.
  • Elsewhere, he points to Cleveland-based KeyCorp, a regional player that stands out for its strong capital levels and diversified fee income streams. In addition, he says that the repricing of low-yielding securities and swaps could support profitability over time.
  • Further bolstering Benson’s view is Bank of Nova Scotia’s 15% minority investment stake, which he sees as a strategic endorsement of KeyCorp’s long-term prospects.
  • “When capital markets become volatile, it’s often the strongest banks that are best positioned to navigate tougher environments,” Benson concludes. “By remaining focused on resilience and quality, these lenders may be better equipped to manage uncertainty and pursue opportunities as they arise.”
Explore more on:
Active management Cyclical Equity Financials Industry Market volatility Sectors
FEATURED FUND

Fidelity Advisor Financials Fund (FIVKX)

Seeks capital appreciation.

View fund

Related insights

View all
Portfolio Manager Insights
Focusing on Japanese firms at the center of AI’s global expansion
Fidelity’s Masaki Nakamura believes Japan is facilitating the growth of artificial intelligence around the world.
Portfolio Manager Insights
A new dawn for regional banks
U.S. regional banks, overshadowed since the 2023 collapse of several midsize lenders, have re-emerged amid a favorable financial landscape, says Fidelity’s Tom Allen.
Portfolio Manager Insights
My quest for 'AI-proof' real estate
The real estate sector is not immune from the fast-moving disruptive effect of artificial intelligence, says Fidelity’s Steve Buller.

For specific fund information such as standard performance and holdings, please go to the "Funds Managed" link on this page.

Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice, and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision. These materials are provided for informational purposes only and should not be used or construed as a recommendation of any security, sector, or investment strategy.

Fidelity does not provide legal or tax advice and the information provided herein is general in nature and should not be considered legal or tax advice. Consult with an attorney or a tax professional regarding your specific legal or tax situation.

Past performance and dividend rates are historical and do not guarantee future results.

Investing involves risk, including risk of loss.

Diversification does not ensure a profit or guarantee against loss.

Sector funds can be more volatile because of their narrow concentration in a specific industry. Growth stocks can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. • Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. • Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. • In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit, and default risks for both issuers and counterparties. • Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. • Floating-rate loans may not be fully collateralized and therefore may decline significantly in value. • The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes, and the financial condition of the issuers of municipal securities. • The securities of smaller, less well-known companies can be more volatile than those of larger companies. • The funds can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. • Leverage can magnify the impact of adverse issuer, political, regulatory, market, or economic developments on a company. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Although the companies that the fund invests in may be highly leveraged, the fund itself does not use leverage as an investment strategy. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Third-party marks are the property of their respective owners; all other marks are the property of FMR LLC.

935036.138
80DFC771DFFF47389AE8C8BF317B61DA