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 31 March 2026
Market and Trust review
The conflict in the Middle East following US strikes on Iran led to a selloff in global equities (MSCI ACWI -5.4% in March) and heightened volatility as expectations shifted on the length of the conflict and the level of impact from the associated energy shock. Global financials fell 4.9% with Europe and Asia relatively weak, reflecting their greater economic sensitivity to the conflict compared to the US.
By subsector, the elevated macro uncertainty weighed most on the banking sector, particularly in Europe, Japan, South Korea and India. The Trust’s NAV fell 4.6% with the negative impact from the overweight in European banks offset by support from trading platforms, which are beneficiaries of the pick-up in volatility, and non-life insurance holdings.
Middle East conflict
The US and Israeli attack on Iran on 28 February and subsequent closure and disruption to the Strait of Hormuz led to a spike in energy prices, with Brent crude at one point reaching $119.5 per barrel, its highest level since 2022. The lack of clarity on the US administration’s ultimate objectives and timeline for the conflict added to uncertainty and market volatility.
From a regional perspective, Asia is more reliant on energy supplies through the Strait, receiving 75% of the oil and 59% of the liquefied natural gas (LNG) that passes through it. Asia is also more vulnerable to higher food inflation - over 30% of global urea and 20% of ammonia exports are now blocked or disrupted. However, Europe is now facing its second energy shock in four years with its post-2022 energy strategy of replacing Russian gas with Qatari and US LNG leaving it exposed to higher wholesale prices.
What will hopefully prove a short-term disruption to energy markets is likely, in our view, to have more profound consequences in terms of international relations. The EU is looking to accelerate its strategic autonomy plans with the relaxation in national fiscal deficit rules dependent on moving procurement to within the EU and reducing its reliance on the US. Questions on the reliability of US security and trade policy will continue to play out across regions during this period of reconfiguration.
Portfolio changes
In light of the uncertain outcome to the conflict, we reduced risk in the portfolio by shifting to more defensive areas. During the month, we added to trading platforms (IG Group Holdings; Plus500) that are beneficiaries of a pick-up in volatility and trading activity.
IG Group Holdings’ share price rose 10% in March with sentiment on the stock supported by a positive FY25 update which noted an acceleration in active customer growth and platform engagement during March. The announcement of a strategic review to be released in the autumn points to continued momentum under the new management to position the company for long-term growth.
While feedback from European banks on recent operating trends has been reassuring - see details below - we retained an overweight position but reduced our exposure given the economic risks to the region associated with a prolonged energy shock. These reductions were partially offset by an increase in our non-life insurance holdings in Europe and the US along with additions to our holding in Oversea-Chinese Banking Corporation (OCBC) in Singapore. The perception of Singapore as a relatively safe haven for global wealth - 77% of Singapore’s AuM originates from outside the country - is likely to be enhanced by recent events in the Middle East. Boston Consulting Group estimates that Singapore will see the fastest AuM growth of major global wealth centres, rising from $1.9trn in 2024 to $2.8trn in 2029.
Management feedback
Morgan Stanley held its European Financials conference in March and commentary from managements provided reassurance on current operating trends, with the caveat from banks that guidance was contingent on a relatively swift resolution of the Middle Eastern conflict. Asset quality is expected to become more of a factor if the energy disruption persists into the second half of the year.
The headwinds associated with higher provisioning from a modest slowdown are expected to be offset by the shift in interest rate outlook in Europe and the UK. Comments on AI highlighted a range of views and reinforced our conviction that it will provide a material competitive advantage for those banks that have invested time to clean their data and have the infrastructure in place to capitalise on both the cost and revenue opportunity.
Regarding the risks to deposit pricing and stability from agentic (autonomously acting) AI, managements noted that pricing was only one element for customers, with insufficient gains for average depositors to change trends in behaviour while regulators were unlikely to support the facilitation of bank liquidity risk.
Outlook
The derisking in markets in the past two months has opened up attractive recovery opportunities should there be a swift resolution of the conflict, given the earnings impact to date appears to have been limited. We have looked to take a balanced approach to our positioning given the unpredictable nature of the conflict and range of possible outcomes as we approach a critical period of negotiation. Should geopolitical risks fade, we expect the focus to remain on both AI and private credit exposures and have positioned the portfolio accordingly.
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.
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