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 27 February 2026
Market review
Financials lagged wider equity markets in February as there was a rotation out of more cyclical into defensive sectors as a number of stocks were hit by AI concerns. These moves were subsequently overshadowed by events after the end of the month in the Middle East. Against that background, the Trust’s net asset value fell 1.1% while the benchmark, the MSCI ACWI Financials Index, rose 1.1%. Our European bank holdings were the biggest detractors from performance, albeit individual holdings in FlatexDEGIRO and S&P Global were the largest individual drags, the former on profit-taking with the latter on a combination of AI concerns and marginally weaker-than-expected results.
Alternative asset managers
Alternative asset managers have been in the wrong postcode for the past year. While the backlog in private equity deals and more difficult fund-raising environment has been unhelpful, of more concern was the growth in the asset class leading to poor underwriting decisions. JP Morgan’s CEO Jamie Dimon’s comment last year on the bankruptcies of FirstBrands and Tricolor, to expect more “cockroaches” added to the negativity. Increased redemption requests for a Blue Owl non-public BDC (business development company1) following a failed merger with a publicly traded sister fund and subsequently a Blackrock BDC and KKR BDC both seeing write-downs led to further weakness, but the fear that the industry’s large exposure to software is a significant risk from AI disruption led to another sharp selloff in share prices.
Against that background, the industry so far has continued to see strong inflows at odds with the coverage given to a small number of funds, where net inflows have slowed rapidly or reversed, while it continues to sit on a lot of dry powder – funds not yet invested. For now, defaults have been idiosyncratic and it would take an economic downturn to lead to substantially higher losses. Nevertheless, we have been underweight the subsector for some time, having reduced our exposure from around 10% two years ago to just over 1% seeing better risk/reward elsewhere. Having sold our holding in EQT during the month, our only holding currently is in Blackstone, which is the largest and most diversified of the alternative asset managers, with over $1trn in assets under management.
AI dystopia
The publication during the month of a dystopian investment blog on the impact of AI set in 2028 and looking at what had changed also impacted the share prices of other companies across the sector. As well as focusing on the alternative asset managers that have insurance subsidiaries, it raised the fear of much higher unemployment which would impact the banking sector, that Visa and Mastercard would be disintermediated while American Express would also suffer from a shrinking white-collar customer base due to job losses. Not mentioned but also affected in February were businesses such as S&P Global and Moody’s where concern that their data analytics could be impacted overlooked the fact that much of the data is proprietary.
February also saw some sharp rotation with US and European banks selling off sharply intra-month, the former down nearly 10%. European banks were also weaker despite fourth quarter results leading to further positive earnings revisions. We put the price moves down to derisking as opposed to anything fundamental. Nevertheless, there are concerns that AI will lead to job losses and that its disinflationary affect will lead to lower interest rates and competition for deposits which will result in lower profits. On the latter, an analysis by broker Keefe, Bruyette & Woods shows that the incremental benefit in constantly moving savings accounts is de minimis, at no more than €7 per month when optimising 100% of balances over €10k, so we felt that much of the concern has fallen wide of the mark.
AI as an opportunity
Conversely, banking and insurance have been seen as the two sectors that will benefit the most from AI, according to a report by the consultancy firm Accenture, because they are very process driven. More recently, PwC also highlighted the opportunity from “melting of [the] middle office” where they believe banks could cut significant costs. Outside significant savings in automating responses from customers with simple questions, allowing staff to focus on helping those with more complex queries, specific examples have to date been relatively limited. However, JP Morgan has previously highlighted the significant improvement in onboarding new customers, where in one year they were able to process 50% more clients with 20% fewer staff, a significant improvement in efficiency.
Nevertheless, in the past two months, two bank management teams have highlighted the opportunity and raised medium-term earnings guidance significantly. UniCredit, Italy’s second largest bank, is targeting a 25% return on tangible equity in 2030 versus the 19% it achieved in 2025 and 6.7% in 2019. Similarly, Banco Santander, Spain’s largest bank which recently bought TSB in the UK and announced the acquisition of Webster Financial, a US regional bank held in the Trust, is targeting a 20% return on tangible equity versus around 15% today. Both see costs as a significant driver to achieving those targets. For example, UniCredit is aiming to cut costs by 1% per annum each year until 2028 and its CEO, Andrea Orcel, highlighted in an interview how an AI model that took a week to develop reduced the time for a credit officer to collate the data needed for a loan application from six weeks to 14 minutes with 98% accuracy – and they expect that to improve.
Outlook
The war in the Middle East will overshadow any other news in the short term and has led to the US seeing some better relative performance, as the selloff in Europe and Asia has been greater, reflecting the importance of imported oil and LNG from the Middle East for their economies. History shows that with very few exceptions equity markets have always been higher in fairly short order after other geopolitical events. The risk of disrupted oil supplies as during the 1970s still carries significant tail risk even if economies are less reliant on it today than they were 50 years ago. The invasion of Ukraine, which led to a significant spike in energy prices in Europe, also provides evidence that the impact may not be as significant.
1 BDCs or Business Development Companies were created by Congress in 1980 to spur investment to smaller and medium sized businesses in the US which they do by providing primarily debt finance on a senior secured basis.
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