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 29 May 2026
Market and Trust review
Equity markets continued to make new highs in May, led by the technology sector, although financials, along with many other sectors, have yet to recover their pre-Middle East war highs. Nevertheless, sentiment improved as oil and other commodity prices fell as the drawdown of oil inventories, reduced imports by China and demand destruction pushed back the date that the Strait of Hormuz could stay closed before having a greater impact on prices. Against that background, the Trust’s NAV (net asset value) rose 1.4% in the month, outperforming its benchmark index, the MSCI All Country World Financials Index, by 0.3%.
Europe was the main driver of positive relative performance over the month with the largest contributors being IG Group and Hiscox. IG Group rallied sharply on the back of upgraded earnings guidance. Hiscox benefited from speculation that Intact Financial, a Canadian insurance company which already has a large UK business following its acquisition of RSA Insurance in 2021, was running the slide rule over it. Conversely, not having a holding in Goldman Sachs Group, which performed well, as well as weakness in Hamilton Insurance Group and our broader life assurance holdings detracted from performance.
Investment banks and trading platforms
Investment banks and trading platforms were among the strongest performers in the financial sector during May and similarly over the past year. They have benefited from the volatility in markets and buoyant conditions across equity, fixed income and commodity markets. Elevated trading volumes have continued to drive income at both the major global investment banks and the specialist retail and institutional trading platforms. At a conference at the end of the month, Morgan Stanley, a holding in the portfolio, stated: “We’re on track to be near the record, if not breaching the record, of 2021. Corporate M&A is up like 62% year-over-year”, before going on to highlight that IPO (initial public offering) activity was up even higher.
Our modest underweight position, compared to the benchmark, in investment banks has been more than offset by a significant exposure to a number of the trading platforms, due to their more attractive valuation multiples, as well as an overweight to the larger, more diversified banks that have significant investment banking operations. Volatility remains elevated and this has helped underpin our structural investment case for having a significant exposure to a number of the trading platforms, such as IG Group, as a counterbalance to those companies that prefer calmer waters. The tailwind of increased retail participation in financial markets in Europe also offers a longer-term growth opportunity.
Asset managers
Traditional asset managers continue to outperform their alternative asset manager counterparts by a meaningful margin. The former benefited from the continued strength of equity markets, which automatically lifts the value of their assets under management, in some cases also helped by improving net inflows. We have a holding in Affiliated Managers Group which owns stakes in 40 asset management businesses including, for example, Artemis in the UK, although it also has significant exposure to alternative asset managers, such as AQR and Pantheon, where it has benefited from stronger flows of investor capital.
Notwithstanding continued positive fund flows, alternative asset managers remain under pressure, weighed down by persistent concerns around private credit. There have also been lower profit forecasts on the back of investor caution around the pace of capital deployment in uncertain market conditions – albeit one at odds with a market that is seeing increased M&A (mergers and acquisitions) activity and IPOs. We retain an underweight stance in the alternative management subsector, with a small holding in Blackstone providing selective exposure to the strongest franchise in the subsector.
US trip
A trip to the US in May to see 15 companies – including MasterCard, Marsh McLennan*, Interactive Brokers Group, Robinhood Markets*, KKR*, TradeWeb* and Moody’s – was helpful in reconfirming our conviction in a number of our holdings. It was also a useful opportunity to see management teams push back on the AI disruption narrative that impacted a small number of companies in the sector, which for now we have little or no exposure to. For the past six months, sentiment has been highly reactive to any company seen as vulnerable, but for now there is no hard evidence to back this up and often quite the opposite.
We currently have no insurance brokers in the portfolio, having sold our holding in AJ Gallagher last year on the back of its historically high valuation against the background of slowing organic growth, since when multiples for the sub-sector have fallen from the low 20s P/Es to mid-teens. Consequently, they remain on our watchlist. The share price fall has been exacerbated by concerns that AI will act as a further hit to their profitability. In our meeting, the management of Marsh McLennan countered that they saw limited risk because their proprietary data, the need for specialist advice due to the complex risks that need insuring and regulatory hurdles for AI alternatives provide a strong, competitive moat. Conversely, they saw simple standardised insurance such as home and motor most at risk of AI disruption. We would agree.
Outlook
Commentary from management teams in recent months has consistently been positive, with the caveat that the uncertain backdrop from the conflict in the Middle East could affect economic growth. However, despite positive earnings revisions, the sector has given back a significant amount of its recent outperformance as it is up less than 1.0% since the start of the year. Absolute valuations remain undemanding at 13.0x P/E multiples, while relative valuations remain very low relative to history with the sector trading at a discount of 33% to the wider equity market vs. an average of 21% looking at data back to 2005.
*not held in fund.
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 as a financials fund manager and is the analyst responsible for the global insurance sector.
Historical Fact Sheets