On 9 March, Nick Brind, Co-Manager of the Polar Capital Global Financials Trust, gave a presentation and Q&A webinar on Hardman Talks. He highlighted the reasons to invest in financials including i) Attractive valuations in absolute and relative terms, ii) Beneficiaries of the reopening trade/rotation into value, iii) Sector benefitting from cyclical recovery in its earnings, iv) Capital return to accelerate as restrictions lifted, v) Sector benefits from higher interest rates/bond yields, and vi) Structural growth in EM, SMID Cap banks and FinTech.
As would be expected, the presentation paid a lot of attention to the outlook in a higher inflationary and interest rate world as well as the impact on recent events in Ukraine and bank balance sheet strength. The Q&A session covered a wide range of topics including how the manager assessed the impact of Russia on global banks and trading, potential share price recoveries, the impact of rising interest rates on earnings, ratings and credit risk, stock selection from the wide range of cheap financials, the impact of technology, especially on larger players, and Bitcoin.
You can download the slides used here.
Polar Capital Global Financials Trust aims to select the best investment opportunities from the world of financials. The investment team scours the globe and actively invests in developed regions such as the US as well as emerging economies and Asia. With a relatively low exposure to UK companies, the Trust could be a complementary holding to existing UK financial stocks.
Investing in a specialist sector such as financials requires an expert eye. The five-strong team at Polar Capital invests solely in financials and has done for many years. The culture at the firm is collegiate and, as such, the managers are able to draw on the expertise of the wider investment teams at Polar Capital, which includes a dedicated Global Insurance team.
The Trust aims to deliver capital growth and income through dividends. A feature of an investment trust is the ability to store income to facilitate dividend payments during times when its underlying companies are unable to do so. One example of this is during the COVID-19 pandemic when many financial companies did not pay a dividend but Polar Capital Global Financials Trust maintained its own income payment.