2019 was a great year for stock investors. The S&P 500 gained almost 32% including dividends, making it both a strong bounce-back from 2018 and one of the best years in what has been a great decade. A big reason the market had a solid year was the performance of many financial stocks; the Financial Select Sector SPDR ETF, which tracks the financials in the S&P 500, paced the market's 32% in total returns last year.

A select group of financial stocks did even better, with the top 10 companies that specialize in lending, banking, insurance, capital management, or several other financial services generating between 84% and 194% in total returns in 2019. Let's take a closer look at 2019's best financial stocks with a market capitalization of at least $1 billion.

The best financial stocks of 2019

Stock Primary Business 2019 Total Returns*
Fannie Mae (OTC:FNMA) Mortgage lender 194.3%
Freddie Mac (OTC:FMCC) Mortgage lender 183.4%
eHealth (NASDAQ:EHTH) Insurance broker 150.1%
Carlyle Group (NASDAQ:CG) Asset management 116.8%
Ares Management (NYSE:ARES) Asset management 110.1%
Apollo Global Management (NYSE:APO) Asset management 106.5%
Victory Capital Holdings (NASDAQ:VCTR) Asset management 106.3%
The Blackstone Group (NYSE:BX) Asset management 96.3%
Cohen & Steers (NYSE:CNS) Asset management 93.97%
Meta Financial Group (NASDAQ:CASH) Lending, ATMs, and prepaid cards 89.7%

Data source: Yahoo! Finance. *Dividends plus stock price appreciation.

As you can see, 2019 was a great year for companies in the asset management business, which took six of the top 10 spots. Moreover, none of the top 10 were commercial retail banks (Meta Financial sold its community banking business last year) and only one was an insurance company.

A bounce-back year for Fannie and Freddie?

Mortgage giants Fannie Mae and Freddie Mac delivered huge gains in 2019, as investors became increasingly optimistic the two would finally be freed from the U.S. government. During the worst of the financial crisis, the two, which underwrite a massive portion of U.S. residential mortgages, were placed into conservatorship by the federal government and provided with billions of dollars in taxpayer aid to keep them afloat.

A tree at the top of the hill with leaves made of cash.

Image source: Getty Images.

When they returned to profitability, they were required to begin paying the U.S. Treasury a dividend to "repay" the money that kept them afloat. That's been the case since 2013. However, at this point, the two have paid the Treasury some $115 billion more than they received in bailout funds, and many people have argued that it's past time this practice was ended, along with the decade-long conservatorship.

And while there have been plenty of rumors that the Trump administration would finally cut them free, it's yet to happen, and several lawsuits, arguing that the government's "sweep" of their profits is illegal, are moving through the courts. If the courts rule in their favor -- or if the Trump administration just sets them free -- investors could see their shares surge even higher, and then profit from the likely implementation of a juicy dividend.

E-commerce and health insurance = big gains

eHealth has spent the past few years leveraging the power of e-commerce to sell health insurance. And it's paying off: Since 2018, revenue is up 78%, and through the first three quarters of 2019, sales increased 35% alone. Business is picking up, and that led to 150% in gains last year.

And the trend seems likely to continue as more and more people shop for insurance online. Moreover, an aging U.S. population -- baby boomers will increase the 65-plus population from 40 million in 2010 to 80 million in 2030 -- will mean more people buying private health insurance to augment Medicare in the decades to come. Chances are, most of them will do their shopping online, where eHealth has established itself as a real leader in a very fragmented market filled with small independent brokers with minimal online presences.

Will eHealth's market-crushing returns continue? Competition will undoubtedly increase and investors shouldn't count on 150% annual gains, but there's a lot in eHealth's favor to keep making investors money.

A big year for asset management

The asset management stocks on this list generated between 94% and 117% in total returns, as a combination of factors worked in their favor. To start, 2019 wasn't just a great year for stocks -- many other asset classes, including real estate, bonds, and others, performed quite well. This led to gains in many of the assets owned by the six asset management companies featured above.

Moreover, general sentiment played a role here, too. The economy continued to plug along in 2019 with solid consumer spending, consumer confidence, and a strong jobs market with very low unemployment. These positives have proved strong enough to allay fears over the ongoing U.S.-China trade fight, potential consequences from Brexit, and some financial indicators such as the so-called inverted yield curve that have predicted recession in the past.

Will the good times continue in 2019? It depends on a number of factors, including whether the economy can continue growing, and also how other, non-stock asset classes these companies manage perform in 2020 and beyond.

Branches? We don't need no stinkin' branches

Of the names on this list, Meta Financial started 2019 as the closest to being a traditional bank. However, the financial holding company, which makes money through commercial and consumer lending, reached an agreement to sell off its community retail bank branches late in the year. It's yet another reminder that lending -- and how lenders source capital -- is changing.

Prior to the close of the sale of Meta Financial's community bank business, only 7% of its deposits were traditional bank deposit products: 57% were from low-cost prepaid cards and demand deposit accounts and 36% were corporate wholesale deposits -- the world's shift to a cashless economy at work.

What will 2020 bring for financials?

While it's risky to predict in a short period of time, there are plenty of positives, including the aforementioned healthy economy and low unemployment, along with low interest rates. If those things continue to be true, it's likely to be another great year. However, things can change unexpectedly and quickly.

With that in mind, my suggestion is don't invest in any stock based on a single year or two. Think about the bigger picture, and invest for the long term if you really want to maximize your returns and minimize your chances of losing money.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.