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 June 2025
Fund and market review
Market sentiment in June was positively supported by reduced concerns on the potential impact of US tariffs, along with initial signs that the ceasefire between Iran and Israel would hold. Despite the July 9th deadline, subsequently pushed back to August, to secure trade deals, equity markets have been surprisingly sanguine about the associated risks, expecting deals to be struck to avoid punitive tariff rates.
Against that background, the Trust’s net asset value rose 1.4% versus a 2.0% rise in its benchmark, the MSCI All Country World Financials Index. The relative performance was affected by the Trust’s underweight position in China, overweight in the UK and the more defensive positioning in the US particularly in relation to the payments subsector.
Bank regulation
The results of the annual capital stress tests for US banks (DFAST) were a positive indicator and should support a higher level of capital return. The sector’s Common Equity Tier 1 capital in a severely adverse scenario fell to 11.6%, a more modest 180bps decline versus the 280bps decline seen last year, with the improvement in excess capital reflecting both a less severe economic downturn and stronger pre-provision earnings.
The DFAST results follow proposals from the Federal Reserve to ease capital requirements associated win the Supplementary Leverage Ratio (SLR) and highlights the shift towards a more balanced regulatory landscape for the banking sector following 15 years of tightening following the global financial crisis. Along with support to capital return, we expect the shift in tone on regulation, in both US and in Europe, to feed through into higher M&A activity with Michelle Bowman, Vice Chair for Supervision of the Fed, indicating a focus on streamlining the approval process.
Stablecoins
June saw numerous headlines on stablecoins1 highlighting that retailers, including Walmart and Amazon, were exploring the possibility of issuing their own stablecoins to reduce transaction costs. The disruption risks associated with retailers circumventing traditional payment rails led to pressure on the card networks while legislation supportive of digital assets currently making its way through Congress (Genius2 Act; STABLE3 Act; Clarity Act) provided additional support to crypto payment companies – Robinhood and Coinbase have materially outperformed in 2025. We see interesting use cases for stablecoins, particularly cross-border B2B payments which could provide a faster and cheaper alternative to current SWIFT4 payments and with the potential to utilise ‘smart contracts’.
However, we are sceptical as to stablecoins’ ability to replace the networks for consumer payments as there would be limited incremental value to the consumer (would consumers want to hold multiple stablecoins for each retailer?) while the card networks offer consumers a ubiquitous and trusted means to pay (which includes fraud protection and dispute resolution) along with incentives (card rewards as the credit card interchange is shared with consumers). Ultimately, we expect the networks to be a part of increased stablecoin adoption – with stablecoin providers issuing debit cards with Visa/Mastercard to enable stablecoin spending – and have seen innovation and partnerships (Visa with Stripe-owned Bridge; Mastercard with MoonPay) in this area.
Savings & Investment Union
During the month, the European Commission published its proposals for developing the securitisation market which forms a component part of the wider Savings & Investment Union (SIU) strategy. Ultimately, the SIU is planned to facilitate the additional €800bn in annual investment that Mario Draghi estimated will be required for digital, green and defence investments with the intention to deepen capital markets, promote growth and encourage households to invest more into targeted investments, thereby unlocking €10trn in low-yielding deposit accounts.
The SIU is at an early stage, but we see this policy initiative as significant for the region and several of our European investments given the potential long-term consequences for the banking sector, trading platforms and asset managers. While there is understandable scepticism on the reform process in Europe given its track record, there is greater political momentum than in previous periods with renewed urgency for European strategic autonomy, as evident in Germany’s push for more expansionary fiscal policy.
Outlook
In the context of an uncertain environment, the absolute and relative performance of the sector in 1H25 (up 6.9% year to date, in sterling terms, with 6.4% outperformance compared to the MSCI All Country World Index) is an important indicator that reflects both supportive operating trends (FY26 estimates for the financials sector have continued to be upgraded year to date) but also longer-term themes related to regulatory easing and policy reform which could provide material tailwinds over the coming years.
While we expect some near-term volatility as trade negotiations continue, we are constructive on the outlook for the sector as, despite strong performance, relative valuations do not reflect the positive shift in the underlying environment.
1A type of cryptocurrency with a value pegged to another asset (fiat currency; gold; precious metal etc)
2Guiding and Establishing National Innovation for US Stablecoins
3Stablecoin Transparency and Accountability for a Better Ledger Economy
4Society for Worldwide Interbank Financial Telecommunication
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
Historical Fact Sheets