GOLDMAN SACHS: Here are the 2 fund giants you should be investing in (AMG, IVZ, XLF)

Financial stocks have rallied since the election of Donald Trump, with the XLFfinancial sector ETF up almost 24%.But now that some of that post-election euphoria is over, Goldman Sachs thinks that the many headwinds facing traditional asset managers will become more consequential.These include:"Active to passive, growth of ETFs (a record start to 2017 with ~+85bn in flows), aging population, fee rate compression and rising costs."In a new report, Goldman identifiedtwo firms that it thinks will overcome these challenges and pull away from the rest of the pack, recommendingAffiliated Managers Group and Invesco. AMG is a diverse collection of boutique investment management groups with proven track records, whileInvesco is an asset manager that has capitalized on the ETF market.Because they are well managed and prepared for the future, Goldman thinks that these two managers are two stocks you want to own, saying they are undervalued and experiencing rapid organic growth compared to their peers.Since the election,Affiliated Managers Group(AMG) is up 14.25% and Invesco (IVZ) is up 26%. Those are very solid gains, but Goldman thinks they have more room to run.Goldman has a "Buy" rating on AMG with a $193.00 price target. That's 16.3% higher than its March 16 closing price of $166.00As for IVZ, Goldman rates it as a "Buy" with a $37.00 price target. That's 13.22% higher than the March 16th closing price of $32.68.AMG was also a recent Top Stock Pick on the Credit Suisse US focus List.Join the conversation about this storyNOW WATCH: 7 mega-billionaires who made a fortune last year
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