Financials make up around 15 per cent of global equities, and despite a recent surge the sector remains at a significant discount to the wider market. In this interview, Nick Brind and George Barrow, co-managers of Polar Capital Global Financials Trust (PCFT), tell Mary McDougall how banks look well placed to benefit from any rise in interest rates.
They discuss what impact a rise in rates might have on bad debts, what pockets of the financials sector look most attractive, why they have avoided owning Chinese banks and what their outlook is for HSBC.
Polar Capital Global Financials Trust, which launched in 2013, aims to deliver income and growth and had a market capitalisation of £458m on 13 October. It has a yield of 2.1 per cent, one-year share price total return of 63 per cent, and 85 per cent over five years. 62 per cent of the portfolio was in banks and 43 per cent in North America at the end of September 2021.