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 December 2025
Market review
December was a good month for financials as although the cut in US interest rates by the Federal Reserve had been expected, the announcement of $40bn per month purchase of Treasury bills, to ease strains in short-term funding markets, was taken positively. Nevertheless, the release of Federal Open Market Committee (FOMC) minutes later in the month showed that despite a significant majority of voting members supporting the cut, the decision was more finely balanced, with several participants questioning whether inflation progress was sufficiently durable to justify further rate cuts. Against that background the Trust’s net asset value rose 3.2% compared with the benchmark, the MSCI All Country World Financials Index, which rose 2.7%
In 2025 global financials rose 19.7% outperforming the technology sector and wider equity markets. Consequently, the sector has now outperformed wider equity markets in four of the past five calendar years. Its outperformance last year we believe reflected a combination of attractive fundamentals and positive earnings revisions. Furthermore, with less than 50% of the sector comprising US-listed companies, versus 65% for global equities, it benefited relatively from the underperformance of the US against non-US equity markets with the standout performance of UK and European financials being a key driver of that outperformance.
The background has improved markedly for the sector but, as importantly, so has the perception that it is an attractive area of the market to allocate capital, where it offers greater diversification in equity markets that are highly concentrated around US equity markets, in particular the technology sector. Also, not only does the fundamental outlook remain constructive for the sector, offering exposure to a number of exciting themes, but it continues to benefit from its attractive valuations relative to wider equity markets with it trading on the lowest price-to-earnings ratios, or similar metrics versus other sectors.
Regulation
Regulation has been a headwind for almost all of the past 15 years, with the exception of the US during the first Trump administration. The US president has deployed the same playbook this time, appointing new heads to a number of regulatory agencies with the aim of making more significant changes. As Michelle Bowman, the newly appointed Vice Chair for Supervision at the Federal Reserve, noted in April 2025 at the Senate Committee on Banking to review her nomination that: “The US regulatory framework has grown expansively to become overly complicated and redundant, with conflicting and overlapping requirements. The growth has imposed unnecessary and significant costs on banks and their customers.”
US Treasury Secretary Scott Bessent also took to X, in December, to lambast Democrat Senator Elizabeth Warren, who is the ranking Democrat member on the Senate Banking Committee in relation to the impact of “the Senator’s beloved and ill-conceived regulatory straitjacket as enforced by the Biden Administration” on the banking sector. While in the US proposals to reduce capital requirements for banks are expected to come into effect in 2026, in the UK and Europe, policymakers are belatedly waking up to the realisation that the answer to growth cannot be more regulation, more capital and yet more acronyms.
Last year, the House of Lords produced a report stating that the UK’s two main regulators, the Prudential Regulatory Authority and the Financial Conduct Authority’s “international competitiveness and growth objective is being held back by pervasive risk aversion, regulatory uncertainty and inefficiency in the regulatory system.” The UK Chancellor stated in her Mansion House speech, that she will be “rolling back regulation that had gone too far in seeking to eliminate risk". These belated efforts include making the UK equity market more attractive for new issues and making changes to capital requirements. In the UK, claims management companies are now having to pay towards the cost of frivolous claims. It is a start. In Europe, regulatory change will move even more slowly but either way we see the steps being taken as positive for the sector.
Europe overweight and US underweight
Against this background, the portfolio positioning has not dramatically changed in recent months with an overweight position in Europe set against a small underweight to the US and underweight positioning to Australia and China while continuing to be selective on what we hold in emerging markets. The underweight position in the US reflected in part increasing concerns that erratic US policy and fiscal largesse will act as an overhang on sentiment and anecdotal stories of investors looking to reallocate away from the US. Nevertheless, the US continues to be home to great companies, many of which are benefiting from strong tailwinds, and has huge advantages over the rest of the world, all of which tempers the underweight position. We are overweight US banks but underweight US insurance and diversified financials.
Europe remains the largest overweight in the portfolio as we believe the risk/reward continues to look more favourable reflecting sentiment having recovered from a very low base with valuations still attractive relative to history. We continue to like the outlook for the banking sector, which has outperformed the Magnificent Seven over the past five years with a combination of high levels of capital return and supported by a favourable environment for M&A. Furthermore, the potential for the EU Savings and Investments Union initiative to unlock the huge amount of deposits currently sat in low yield deposit accounts for investment would be hugely beneficial to a number of our holdings including FlatexDEGIRO and DWS Group.
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