As we approach the seventh anniversary of Polar Capital Global Financials Trust (PCFT)’s launch, its directors are proposing that the company continues beyond its planned wind-up date. A decade after the financial crisis, the sector, and banks in particular, remain out of favour. The problem is compounded for UK-based investors by the narrow choice of banks available; it makes sense to look elsewhere for faster-growing, better-managed businesses. However, this is a complex sector. PCFT offers a way of capturing the upside when banks are eventually re-rated. It also offers a lower-risk, more diversified portfolio, managed by an expert team.
From launch to end December 2019, PCFT has matched the returns of its benchmark and paid out an attractive and growing dividend. More importantly, it has delivered strong risk-adjusted returns, well ahead of UK-listed banks, for investors who wanted to diversify away from UK financials. As it moves to extend the life of the trust, the board has thought about how it can improve on the original structure and made a number of changes, including a five-yearly tender offer (an exit opportunity by way of an offer by the company to buy its shares).
Growing income from financials stocks
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