8th Jul 2019 17:28
(Alliance News) - Polar Capital Global Financials Trust PLC on Monday said it outperformed its benchmark in the first half of its financial year due to a strong performance from Mastercard Inc and AJ Bell PLC.
In the six months to May-end, the financials investor said its net asset value total return was 2.0%, beating the 1.4% return of the MSCI World Financials plus Real Estate Index.
As at May 31, the trust's NAV per share stood at 139.38 pence, down 2.3% from 142.61p the year before, but up 0.6% from 138.57p at the end of its 2018 financial year on November 30.
Investment managers Nick Brind and John Yakas said: "Positive stock selection was partially offset by an overweight position in banks and an underweight position in real estate investment trusts, the latter which performed very well over the period. Our holdings in emerging market banks were a positive contributor as were our fixed-income holdings.
"Mastercard was the biggest contributor to performance, followed by holdings in AJ Bell, the UK investment platform, which was purchased on initial public offering, and Arch Capital, the US speciality insurer."
The weakest performance came from Swedbank and US regional banks like SVB Financial Group and East West Bancorp.
Polar Capital Global Financials has declared a first interim dividend of 2.40p per share, up 6.7% year-on-year from 2.25p per share.
Chair Robert Kyprianou said: "I have commented in my past statements on the lag between the clear and broad improvement in the underlying position of financials, especially banks, and its recognition in stronger sentiment towards the sector and better valuations. The first half of the financial year has continued this theme, with expectations of a reversal of the trend in US official rates growing, Brexit and populist uncertainties rising in Europe, and the hardening of global trade tensions all undermining a sentiment recovery in the sector. However, the board continues to believe that the great strides forward taken by the banking sector in particular to strengthen balance sheets, reduce risk, and improve capital adequacy and operational leverage will allow the sector to be more resilient in any downturn and better positioned to benefit from the next upturn in economic activity. Valuations have significant scope to improve from their current levels as confidence builds."
Kyprianou added that: "The board continues to consider options in relation to the fixed life end date in May 2020. We anticipate being able to make proposals to shareholders before such date which we believe will be in the best interests of shareholders."
Shares in Polar Capital Global Financials closed flat at 142.00 pence on Monday in London.
Related Shares:
Polar Cap Gbl