(Alliance News) - Polar Capital Global Financials Trust PLC on Tuesday said its net asset value per share fell, but it marginally outperformed the total return of its benchmark index across the half-year period.
The London-based asset manager also opted to increase its interim dividend payment to shareholders, despite its declining financials.
Polar Capital Global Financials' NAV per share on May 31 was 151.2 pence, down 6.6% from 161.8p a year earlier. Shares in the company were flat at 136.40 pence each in London early Tuesday.
In the six months that ended May 31, it recorded a NAV total return of negative 8.1%, while losses on investments held at fair value widened to GBP50.9 million from GBP25.5 million a year earlier.
However, though firmly in the red, Polar Capital Global Financials' NAV total return marginally outperformed its benchmark, the MSCI ACWI Financials index, which posted a negative 8.4% total return across the half-year period.
"The past six months have been a most challenging period for investors in many asset classes as major economies and central banks adjust to a higher inflationary environment and the highest interest rates for a decade. Global equity markets have struggled for direction and sectors, such as those your company invests in, have had a particularly difficult time," said Chair Simon Cordery.
"We have also witnessed a number of individual bank failures, notably Silicon Valley Bank in the US and Credit Suisse in Europe, which had a knock-on effect on bank share prices worldwide. These failures brought back painful memories of the Global Financial Crisis and understandably, investors became cautious."
The asset manager remained bullish in outlook, trusting its outlook with a bump in its interim dividend to shareholders. It declared a payment of 2.45p per share for the half-year period, up 2.1% from 2.40p a year earlier.
Polar Capital Global Financials also noted until Friday last week since the end of the half-year period, it bought back 2.4 million shares at an average discount to the live NAV at the time of transaction of 11%.
These shares have been placed into the treasury, Polar Capital Global Financials said, and follow a buyback of 5.3 million shares during the half-year period, all of which were also placed into the treasury.
"We remain cautious given the market uncertainty and investors unwillingness to take risk. However, we believe the underlying fundamentals and valuations of the sector are favourable and we remain positive on the sector," said Chair Cordery, claiming Polar Capital Global Financials' investment managers are "primed to take advantage of opportunities as and when they arise".
Cordery added: "The sector looks cheap relative to history and little, if any, good news is being priced in. As and when sentiment improves, we feel confident that our portfolio will be a beneficiary.
"As the dust settles and valuations are reappraised against the very positive fundamentals we expect opportunities will present themselves and investors will become interested in the sector once again."
By Greg Rosenvinge, Alliance News reporter
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