Polar Capital Global Financials Trust plc (the "Company"): The Company is an investment company with investment trust status and its shares are excluded from the Financial Conduct Authority’s (“FCA”) restrictions on the promotion of non-mainstream investment products. The Company conducts its affairs, and intends to continue to conduct its affairs, so that the exemption will apply.
The Company is an Alternative Investment Fund under the EU's Alternative Investment Fund Managers Directive 2011/61/EU as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018.
The Investment Manager: Polar Capital LLP is the investment manager of the Company (the "Investment Manager"). The Investment Manager is authorised and regulated by the FCA and is a registered investment adviser with the United States' Securities and Exchange Commission.
Key Risks
- Investors' capital is at risk and there is no guarantee the Company will achieve its objective.
- Past performance is not a reliable guide to future performance.
- The value of investments may go down as well as up.
- Investors might get back less than they originally invested.
- The value of an investment’s assets may be affected by a variety of uncertainties such as (but not limited to): (i) international political developments; (ii) market sentiment; and (iii) economic conditions.
- The shares of the Company may trade at a discount or a premium to Net Asset Value.
- The Company may use derivatives which carry the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions.
- The Company invests in assets denominated in currencies other than the Company's base currency and changes in exchange rates may have a negative impact on the value of the Company's investments.
- The Company invests in a concentrated number of companies based in one sector. This focused strategy can lead to significant losses. The Company may be less diversified than other investment companies.
- The Company may invest in emerging markets where there is a greater risk of volatility than developed economies, for example due to political and economic uncertainties and restrictions on foreign investment. Emerging markets are typically less liquid than developed economies which may result in large price movements to the Company.
Important Information
Not an offer to buy or sell: This document is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, and under no circumstances is it to be construed as a prospectus or an advertisement. This document does not constitute, and may not be used for the purposes of, an offer of the securities of, or any interests in, the Company by any person in any jurisdiction in which such offer or invitation is not authorised.
Information subject to change: Any opinions expressed in this document may change.
Not Investment Advice: This document does not contain information material to the investment objectives or financial needs of the recipient. This document is not advice on legal, taxation or investment matters. Prospective investors must rely on their own examination of the consequences of an investment in the Company. Investors are advised to consult their own professional advisors concerning the investment.
No reliance: No reliance should be placed upon the contents of this document by any person for any purposes whatsoever. None of the Company, the Investment Manager or any of their respective affiliates accepts any responsibility for providing any investor with access to additional information, for revising or for correcting any inaccuracy in this document.
Performance and Holdings: All data is as at the document date unless indicated otherwise. Company holdings and performance are likely to have changed since the report date. Company information is provided by the Investment Manager.
Benchmark:The Company is actively managed and uses the MSCI ACWI Financials Net TR Index as a performance target and to calculate the performance fee. The benchmark has been chosen as it is generally considered to be representative of the investment universe in which the Company invests. The performance of the Company is likely to differ from the performance of the benchmark as the holdings, weightings and asset allocation will be different. Investors should carefully consider these differences when making comparisons. Further information about the benchmark can be found www.mscibarra.com.
Third-party Data: Some information contained in this document has been obtained from third party sources and has not been independently verified. Neither the Company nor any other party involved in compiling, computing or creating the data makes any warranties or representations with respect to such data, and all such parties expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained within this document.
Country Specific Disclaimers
United States: The information contained within this document does not constitute or form a part of any offer to sell or issue, or the solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States or in any jurisdiction in which such an offer or solicitation would be unlawful. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”) and, as such, the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Company will be offered and sold only outside the United States to, and for the account or benefit of non-U.S. Persons in “offshore- transactions” within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained in this document, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Further Information about the Company: Investment in the Company is an investment in the shares of the Company and not in the underlying investments of the Company. Further information about the Company and any risks can be found in the Company’s Key Information Document, the Annual Report and Financial Statements and the Investor Disclosure Document which are available on the Company's website, found at: https://www.polarcapitalglobalfinancialstrust.com
Fund Manager Commentary As at 30 May 2025
Market review
Equity markets continued to recover in May from the tariff-induced selloff the prior month, notwithstanding the erratic nature of policy announcements, as trade tensions eased. Led by US technology shares the MSCI All Country World Index rose by 4.8%, with financials – as per the Trust’s benchmark, the MSCI All Country World Financials Index – marginally lagging the wider equity market with a return of 4.5%, albeit with European and Japanese financials leading the sector as interest rate expectations hardened. Unsurprisingly with equity markets risk-on, banks, consumer finance stocks and asset managers saw the strongest gains while insurance stocks lagged the rally. Against this background, the Trust’s net asset value rose 5.2% with holdings in Alpha Bank, Interactive Brokers Group and Plus500 seeing the strongest gains. Conversely Swiss Re, Globe Life and Fidelity National Information Services all fell slightly over the month.
Berkshire Hathaway
Berkshire Hathaway held its AGM in May, as usual, with thousands of attendees flocking to Omaha to hear Warren Buffett’s latest thoughts. The shares fell following the surprise announcement that he would be stepping down as CEO to be replaced by Greg Abel, although results were also weaker than expected due to the cost of the Californian wildfires on its reinsurance business. Not surprisingly, this garnered significant coverage even though Buffett had admitted last year that he had already stepped away from the day-to-day management of the business. With cash and T-bills rising to a record US$350bn, Berkshire Hathaway remains incredibly well positioned should the tide flow out, but we see little change to the business with Buffett remaining as Chairman and likely to advise on any large investment decisions. In fact, the huge size of Berkshire Hathaway’s balance sheet at over $1trn of assets makes the company a supertanker and it is very hard to put that amount of money to work, as Buffett has repeated on several occasions.
Trading platforms
Trading platforms have been very strong in 2025 benefiting from the continued growth in retail trading and a pick-up in volatility. The listing of eToro*, a European retail platform, in the US, at a significant premium to its European listed peers, highlighted the value and the opportunity set across the subsector. Oliver Wyman estimates that Europe will add 22 million new brokerage accounts by 2028, with penetration of the adult population increasing from 6.8% to 11.7% over the same timeframe, although still less than one third of that in the US. Younger generations are also starting to invest at an earlier age, with generation Z starting on average at age 19 versus 26 for millennials and 32 for generation X, reflecting the ease and great user experience due to technology available on mobile apps and ability to learn about trading and investing. The business models and fragmentation of European markets have led us to hold a diverse range of companies including FinecoBank, FlatexDEGIRO, IG Group Holdings and Plus500, and this group remains one of the largest positions in the portfolio.
Alternative asset managers
With the continued slow background for M&A activity, alternative asset managers have seen pressure on earnings due to the backlog of companies they need to sell to return capital to their investors. Nevertheless, while 2024 has seen a further fall in fundraising it is still positive, in contrast to their traditional asset management peers who lack exposure to ETFs. Ares Management and Intermediate Capital Group (ICG) announced results and both saw assets under management grow by mid-teens percentage points. Notwithstanding negative press, management teams remain very positive on the long-term opportunity, with Michael Arougheti, CEO of Ares Management, on the company’s earnings call, stating that “we are still in the very early innings” when looking at the demand for private credit. Also, in a meeting we had with the CFO of Carlyle Group, he argued that the opportunity in wealth management is “such an enormous opportunity for the industry” which will take more than 10 years to play out.
European financials
In contrast, the European banking sector has stood out for the pick-up in M&A activity which has benefited performance along with further positive earnings revisions. Erste Group Bank, an Austrian bank with operations in central and eastern Europe, announced it was buying a 49% stake in Santander Polska* for €6.9bn and while there was speculation about the ability of UniCredit to execute on its acquisition of Banco BPM*, even though it has appealed the restrictions put in place by the Italian government for its approval, it lifted its stake in Alpha Bank, a Greek bank, to just under 20% and requested permission to take it to 29.9%. The response from Greek regulators and politicians has been uniformly positive to the increase in its stake, in contrast to the reaction of politicians in Germany in relation to its stake building in Commerzbank*. This is in spite of a large part of that stake being bought off the German government which it had notified in advance of its interest.
Section 899
“The One Big Beautiful Bill Act”, the misnamed tax bill, passed through the House of Representatives during the month. As well as increasing spending in areas such as defence and extending tax cuts, it entails legislation, under section 899 of the bill, to allow the US to increase taxes on the subsidiaries of non-US companies that look to repatriate profits based in countries that impose unfair foreign taxes, such as the digital services tax that the UK and EU levy on US technology companies. If enacted as written, it could have a material impact on some companies within the sector that have sizeable US businesses, such as Barclays. However, we would expect companies impacted to be able to offset a large part of the hit to earnings if that were to happen. Nevertheless, we see it more as another trade negotiation tool. Consequently, we expect very limited, if any, impact on the sector outside the continued uncertainty that the overall economic policies of the US government have so far had on the global economy and financial markets.
Outlook
As highlighted in our recent commentary, the portfolio has been tilted towards some of the more defensive parts of the sector and those likely to be beneficiaries of any continued volatility in financial markets. European banks and latterly also Indian banks are benefiting from an easing liquidity environment, where we have a more constructive view. It is worth highlighting that the sector has also been a beneficiary of its lower weighting to the US against the background of US exceptionalism being questioned and weakness in the US dollar. This is due to the sector being a significantly larger percentage of non-US equity markets, reflecting their higher domestic focus. At the end of the month, the Trust had 47.4% in US financials, around 2% lower than the benchmark and 10.6% lower than our positioning in December.
* not held
Nick Brind
Nick’s experience comes from running specialist and generalist funds with UK and global mandates for the past 25+ years
George Barrow
George is a specialist financials fund manager as well as an analyst across Europe, Asia and emerging markets
Tom Dorner
Tom joined Polar Capital in 2023 and is the analyst responsible for the global insurance sector
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