Final Results

Polar Capital Global Financials Trust

Feb 16 2024 07:00 GMTSource: RNS

RNS Number : 3529D

Polar Capital Global Financials Tst

16 February 2024

POLAR CAPITAL GLOBAL FINANCIALS TRUST PLC

Legal Entity Identifier: 549300G5SWN8EP2P4U41

AUDITED ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED

30 NOVEMBER 2023

PERFORMANCE HIGHLIGHTS FOR THE YEAR ENDED 30 NOVEMBER 2023

Performance (Sterling total return)		For the year ended 30 November 2023 %	Since Inception %
Net asset value (NAV) per ordinary share* (1)		-2.8	119.7
Ordinary share price* (2)		-7.5	87.9
Ordinary share price including subscription share value* (3)		-	91.8
Benchmark (Sterling total return) (4) MSCI ACWI Financials Chain-linked benchmark		0.3 0.3	124.0 135.6
Other Indices and peer group (Sterling total return)
MSCI World Index		6.9	204.2
FTSE All Share Index		1.8	76.5
Lipper Financial Sector (5)		-2.2	103.5

Performance since Reconstruction on 22 April 2020 (Sterling total return)		Since Reconstruction %
NAV per ordinary share* (6)			68.8
Benchmark (4)			67.7

Financials	As at 30 November 2023	As at 30 November 2022	% Change
Total net assets	£488,198,000	£541,272,000	-9.8
NAV per ordinary share	158.1p	166.3p	-4.9
Ordinary share price	138.8p	154.6p	-10.2
Discount per ordinary share*	(12.2%)	(7.0%)
Net gearing*	6.5%	6.0%


Earnings per Ordinary share (7)	For the year ended 30 November 2023	For the year ended 30 November 2022
Revenue Return	4.97p	4.45p
Capital Return	(9.84p)	(2.75p)
Total	(4.87p)	1.70p
Expenses*
Ongoing Charges	0.86%	0.87%
Ongoing charges including performance fee (8)	0.86%	0.65%

Dividends (9)

The Company has paid or declared the following dividends relating to the financial year ended 30 November 2023:

Pay date	Amount per ordinary share	Ordinary Shares In issue	Record date	Ex-date	Declared Date
First interim: 31 August 2023	2.45p	315,955,329	4 August 2023	3 August 2023	11 July 2023
Second interim: 29 February 2024	2.10p	307,160,405	2 February 2024	1 February 2024	18 January 2024
Total (2022: 4.45p)	4.55p

Note 1

The total return NAV performance for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date. Performance since inception has been calculated using the initial NAV of 98p and the NAV on 30 November 2023. Dividends are deemed to be reinvested on the ex‑dividend date as this is the protocol used by the Company's benchmark and other indices.

Note 2

The total return share price performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date. Performance since inception has been calculated using the launch price of 100p to the closing price on 30 November 2023.

Note 3

The total return share price performance since inception includes the value of the subscription shares issued free of payment at launch based on one for every five Ordinary shares and assumes such were held throughout the period from launch to the final conversion date of 31 July 2017. Performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date and uses the launch price of 100p per Ordinary share and the closing price per Ordinary share on 30 November 2023.

Note 4

Chain linked benchmark is a combination of 3 benchmarks which have been in operation over the period. From inception until 31 August 2016 the Company's benchmark was the MSCI World Financials Index, which included Real Estate as a constituent until its removal that year. From 1 September 2016 to 23 April 2020 the benchmark was the MSCI World Financials + Real Estate Net Total Return Index. From 23 April 2020, the benchmark changed to MSCI ACWI Financials Net Total Return Index (in Sterling) due to the Company's exposure to emerging market equities and its limited exposure to real estate equities.

Note 5

Dynamic average of open-ended funds in the Lipper Financial Sector Universe which comprised 55 open ended funds in the year under review.

Note 6

The total return NAV performance since the Reconstruction is calculated by reinvesting the dividends in the assets of the Company from the relevant ex‑dividend date. The new performance fee period runs from the date of the Reconstruction. The opening NAV for the performance fee of 102.8p is the closing NAV the day before the tender offer was completed.

Note 7

Refer to Note 11 below for more details.

Note 8

The prior year decrease in ongoing charges including performance fee reflects the write back of the performance fee accrual for the year ended 30 November 2022.

* Alternative Performance Measure, see below for further explanations.

Data sourced by HSBC Securities Services Limited and Polar Capital LLP. .

Status of Announcement

The figures and financial information contained in this announcement are extracted from the draft unaudited financial results for the year ended 30 November 2023 and do not constitute statutory accounts for that year. Once finalised, the Annual Report and Financial Statements will include the Report of the Independent Auditors which is expected to be unqualified and not expected to contain a statement under either section 498(2) or Section 498(3) of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 30 November 2023 have not yet been delivered to the Registrar of Companies.

The figures and financial information for the year ended 30 November 2022 have been extracted from the published Annual Report and Financial Statements for the year ended 30 November 2022 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements for the year ended 30 November 2022 have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or Section 498(3) of the Companies Act 2006.

The Directors' Remuneration Report and certain other helpful shareholder information have not been included in this announcement but will form part of the finalised Annual Report which will be available on the Company's website and will be sent to shareholders in February 2024.

National Storage Mechanism

A copy of the Annual Report once published will be submitted to the National Storage Mechanism ('NSM') and will then be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Neither the contents of the Company's website nor the contents of any website accessible from the hyperlinks on the Company's website (or any other website) are incorporated into or form part of this announcement.

CHAIR'S STATEMENT

Dear Shareholder

I wrote my first statement to you as Chair of the Company within the half-year report in July 2023, reflecting a challenging period for investors and the financials sector which has continued for most of the year under review.

2023 proved to be a most frustrating year for investors in the global financials sector. While we saw broad stock market improvements over the period, predominantly led by technology, the financials sector underperformed, following a few years of relative out-performance. Sentiment has not been favourable towards the sector despite a backdrop of historically low valuations and improving profitability at banks in particular. It seems that rising interest rates, high inflation and the fear of a slowdown in economic growth weighed more heavily on investors' minds.

Several US bank failures and the controversial events surrounding the distressed Credit Suisse sale to UBS also played their part in denting confidence in the sector. Although high interest rates are generally favourable to the performance of banks, investors are focusing instead on the potential for loan losses which these might cause. However, as interest rate hikes moderate and succeed in reducing inflation to target levels, central banks may start the process of lowering rates once more and this should act as a catalyst to investment in the financials sector.

The highest interest rates in more than a decade have offered investors an almost risk free safe haven in the form of government bonds and even cash, with an appealing headline return (before the effects of inflation). This has provided a credible alternative to equities and corporate bonds; investors currently seem happy to wait for a better time to invest their cash.

Geopolitical risk remains high. The ongoing war in Ukraine and the consequences of COVID continue to impact economic activity. Energy prices remain volatile and supply chain issues persist. The opening up of China, post the ending of zero- COVID polices, has not provided the fillip to the investment markets expected this time last year. The troubles of the Chinese property market and their impact on the local banking sector seem yet to be fully realised. These factors have dampened investment and broader economic activity. The more recent conflict within the Gaza Strip has stoked geopolitical risk issues and raised tensions across the Middle East. None of this is helpful in moving investor sentiment to increase risk. A speedy resolution in the Middle East and any sign of improvement with regards to Ukraine would be positives for investors but it is difficult to see either development currently.

Investment Performance

The Investment Managers' Report, in the full Annual Report and Accounts, has more detail on how the portfolio evolved over the year and the bank sub sector issues are discussed in some detail. The MSCI ACWI Financials Index underperformed more broadly based indices over the reporting period and the Company's portfolio underperformed the Benchmark. Despite having respectable returns in the first half, the Company's overweight position in US mid sized banks meant the second half was disappointing. We avoided the big failures (Credit Suisse, First Republic and Signature) but took a small loss on Silicon Valley Bank; being overweight banks generally held the portfolio back. The portfolio was modestly geared over the period under review which acted as an additional drag on performance.

The Net Asset Value Total Return (NAV TR) for the year fell by 2.8% versus the MSCI ACWI Financials Index which rose 0.3%. Share price performance was further impacted by the widening of the discount to NAV to 12% in common with the investment companies' sector in general. Investment companies with large holdings of illiquid assets such as real estate, infrastructure and private equity saw the biggest widening in discounts, but many investment companies with highly liquid underlying assets were also impacted. The year-end discount to NAV was 12.2% (2022: 7.0%), slightly below the widest discount of 13.6% seen earlier in the year; consequently the Share Price Total Return for the period under review fell by 7.5%.

Since launch in 2013, the NAV TR has been 119.7% against 135.6% for the benchmark. From the point of the Company's reconstruction in April 2020, the portfolio has returned 68.8% and the Benchmark 67.7%.

NAV Discount management

The Company continued to pursue a substantial share buyback policy during the year which was accretive to NAV and helped support liquidity in the shares. The Company bought back a total of 16,532,313 ordinary shares, equivalent to 5.1% of the shares in issue at the start of the financial year, at an average discount of 10.5%. These buybacks had an accretive effect on the NAV of 0.76p per share. Following the period end, a further 2,311,282 ordinary shares were repurchased into treasury.

The Board issues a delegated authority to the Manager and our Corporate Broker to buy shares under defined parameters. These are designed to ensure that the Company does not displace any market demand for shares but provides liquidity, if required, once market demand has been satisfied.

The Board has reconfirmed its authority to the Manager to continue the policy of share repurchases under appropriate parameters in order to reduce the discount at which the Company's shares trade Share Capital Changes.

Dividends

The Company's current dividend policy and aim with respect to the Ordinary Shares is to pay two interim dividends each year, in February and August. These interim dividends will not necessarily be of equal amounts. The Board monitors, with the help of the Manager, the prospects for dividends from its equity holdings and interest income from cash and fixed income securities. In August 2023 the Company paid an interim dividend of 2.45p per ordinary share. Despite a challenging year for markets, the portfolio has generated good dividends and in particular collected coupons from its increased fixed interest holdings. As a result the Company's revenue account has recovered to pre-COVID levels. The Board has declared a further interim dividend of 2.10p per ordinary share payable to shareholders on the register as at 2 February 2024. This will bring the total dividend paid for the financial year under review to 4.55p per ordinary share, a modest increase on the previous financial year.

Share Capital

While there were no share issues during the year, share buybacks totalling 16,532,313 resulted in a reduction in shares issued in the market and an increase in shares in treasury.

As at 30 November 2023, the Company had 331,750,000 ordinary shares of 5 pence each in issue (2022: 331,750,000 shares), of which 22,888,313 shares (2022: 6,356,000) were held in treasury. Following the period end, a further 2,311,282 ordinary shares were repurchased into treasury. Following these share repurchases, as at 13 February 2024, the total number of ordinary shares in issue was 331,750,000 of which 25,199,595 shares were held in treasury.

The Board

The Board is aware of the FCA's Diversity and Inclusion Policy and notes that its current composition meets two of the three 'comply or explain' targets with three of the four members being female and one of the two senior positions being occupied by a female. Whilst the Board does not meet the recommended ethnicity requirements, it has put in place a succession plan based on the recommended nine-year tenure of Directors. A key objective for the Board is having an appropriate blend of skills and diversity of experience and thought around the table. When the Board next embarks upon a director search it will set criteria, as it did in the most recent round of hiring, that ensures candidates are sourced from a broad pool such that the Board can consider candidates with minority ethnic backgrounds. Further information on this can be found in the Corporate Governance Report in the full Annual Report and Accounts.

As I mentioned in my Interim Statement, Katrina Hart and Robert Kyprianou retired from the Board following nine years continuous service and we welcomed Susie Arnott and Angela Henderson to the Board. There have been no other changes to the membership of the Board during the year under review. The Directors' biographical details are available on the Company's website and are provided in the Annual Report and Accounts.

Environmental, Social and Governance (ESG)

The Company's investment mandate is not an ESG mandate, however the Manager incorporates ESG considerations into its investment process and the Board has close engagement with the Manager to monitor its progress. ESG is now formally incorporated into the Terms of Reference of the Management Engagement Committee. This Committee, chaired by Susie Arnott, undertook a detailed analysis of the ESG methodology and engagement process by the investment team, and was pleased to note year on year progress in this regard.

Beyond the investment portfolio, the Board considered the ESG aspects of the Company. As all business operations are outsourced, the Board has limited control over ESG deliverables, however the Manager obtains certain ESG confirmations and attestations from suppliers annually. The Board, via the Company Secretary and Manager, works with the Company's key service providers to gain clear insight into their ESG strategies and believes that adopting good ESG practices leads to better outcomes for the Company.

Management Team

The Company's portfolio is currently managed by Nick Brind and George Barrow. As announced in early 2023, John Yakas retired on 30 June 2023 but remains available to the team in an advisory capacity. On 1 December 2023, the team was joined by senior fund manager, Tom Dorner, a highly experienced financials investor.

Annual General Meeting

The Company's Annual General Meeting ("AGM") will be held at 16 Palace Street at 2:00pm on Thursday, 18 April 2024. The notice of AGM has been provided to Shareholders and is available on the Company's website. Detailed explanations of the formal business and the resolutions to be proposed at the AGM are contained within the Shareholder Information section in the full Annual Report and in the Notice of AGM. As we have done in previous years, we will once again upload a copy of the Manager's Investment Presentation to the Company's website ahead of the AGM and will hold only the formal business of the meeting in person. We have provided a zoom link in the Notice of AGM which will enable anyone interested to view the formal business and ask questions via the on-line chat function. The Managers will be available to answer questions and meet shareholders present. All formal business resolutions will be voted on by a poll and we therefore encourage shareholders to submit their votes ahead of the meeting by proxy card which is provided with the Notice of Meeting.

We are conscious of the importance of shareholder engagement and would like to encourage shareholders to engage with the Board and the Investment Manager. As such, the Board invites shareholders to submit questions in writing to which we will respond, as far as possible, ahead of the AGM date. Please send your questions to cosec@polarcapital.co.uk with the subject heading PCFT AGM.

Outlook

Looking to the year ahead, we remain constructive on the outlook for the Financials sector despite an uncertain backdrop. Clearly there remain significant geopolitical issues further complicated by elections in the US and UK, which may well weigh on the markets. However there are several signs for optimism. Evidence suggests inflation is at last reducing, economic growth seems to be returning to key markets and the fears of a deep recession appear to be abating. The earnings outlook in the financial sector has improved and valuations offer attractive entry levels for investors who are, generally speaking, significantly underweight financial sector exposure. As and when these positive influences take root, a recovery in investor sentiment should follow. I encourage you to read the detailed Investment Managers report and the Outlook section where they set out their thoughts on the various subsectors.

Simon Cordery

Chair

15 February 2024

INVESTMENT MANAGER'S REPORT

Investment Review

Performance

Having outperformed for two consecutive years, it was disappointing but perhaps not surprising that financials underperformed the broader equity markets in the year to November 2023. While equity markets did deliver good returns, this was largely due to the strong performance of technology shares, specifically the so-called 'Magnificent Seven', (the US mega-cap technology firms of Amazon, Apple, Alphabet, NVIDIA, Meta, Microsoft and Tesla).

The financials sector was particularly impacted by the collapse of a number of US regional banks and, in Europe, the forced sale of Credit Suisse to UBS Group which led to a sharp sell off in banking shares and bonds in March. Consequently, US financials, which comprise approximately 45% of the portfolio, were weak over the year. Conversely, Japanese and European financials, notwithstanding the turmoil around Credit Suisse, stood out for their positive performance. Asian financials were weaker than expected, following the reopening of China from its zero-Covid policy which provided less support to economic data than had been expected.

Government bond markets suffered further falls during the second half of the year around concerns that central banks would pursue interest rate increases aggressively to choke off inflation. These falls then reversed sharply in November on the back of much-improved inflation data, led by lower energy and goods prices, but also concerns that the outlook for growth was weakening.

Against this background, the Trust's net asset value fell 2.9% while the benchmark index, the MSCI All Country World Financials Index, rose 0.3% and the MSCI All Country World Index rose 6%. The MSCI All Country Index excluding the performance of the Magnificent Seven would have fallen by. around 0.5%. The Lipper open-ended peer group of financial sector equity funds fell by -2.2%. Financial bonds performed well, returning 4.4% as per the ICE BofA Global Financials index.

Performance in the first half of the year was largely satisfactory but the second half was disappointing. While we had no holdings in Credit Suisse, First Republic Bank or Signature Bank and only a very small holding in Silicon Valley Bank (SVB) an overweight position in US banks was a headwind to performance. Overall stock selection during the period and the negative impact of gearing were the main drivers of underperformance.

More specifically, our bias to higher quality companies hurt performance as they lagged peers and our overweight position in defensive names towards the end of the year led to some underperformance on a sharp rotation and market rally. We realised a loss on a holding in CAB Payments, a cross-border payments company which listed in the UK in July. In our view, the company has a significant opportunity to disrupt the existing correspondent banking model for cross-border transfers. However, shortly after listing, the company issued a profits warning following unexpected central bank action in a number of its key markets. The share price fell sharply as a result. We expect it will take some time for management to rebuild credibility given the earnings downgrade so soon after the IPO and consequently the holding was sold after the period end.

Sector review

Banks

In 2023, negative sentiment around the outlook for growth weighed on banks' share prices due to concerns about the impact on their profitability from an economic downturn. Shares initially performed well in the period as earnings expectations continued to rise benefitting from higher interest rates which fed through to higher net interest income - the income they generate from the assets they hold (i.e. loans and securities), relative to what they pay out to depositors and other sources of funding.

However, higher interest rates resulted in significant unrealised "mark to market" losses in the securities portfolios held by banks. Despite negligible risk of these losses being realised, if held to maturity, these losses in some cases were substantial relative to banks' capital. Therefore, the announcement by SVB on 8 March 2023, that it would be selling a portfolio of its securities at a loss, while at the same time aiming to raise capital to strengthen its balance sheet unnerved both investors and depositors. Despite support for the capital raise, the loss of $42bn in deposits on that day led to it being pulled and ultimately the bank's collapse.

Signature Bank was foreclosed two days later as it also suffered significant deposit outflows. While the bank was better known as a New York commercial real estate lender, its exposure to crypto assets via its Signet payments platform unsettled depositors as it followed shortly after the failure of Silvergate Bank, a much smaller bank with much larger exposure to the crypto industry whose demise received very little coverage.

First Republic was the last of the four US banks to go into foreclosure, being bought from the Federal Deposit Insurance Corporation by JP Morgan. In this case, a business model focused on lending to high net worth and aspirational clients which had seen phenomenal growth on the back of its customer service unravelled, despite the efforts of a JP Morgan bank-led consortium to help by injecting $30bn of deposits into the bank.

In Europe, Credit Suisse, which had seen large outflows of deposits in the final few months of 2022, saw further outflows following the collapse of SVB. Its 2022 Annual Report alluded to "material weakness" in its internal controls and a poorly timed or misunderstood statement from their largest shareholder that they would "absolutely not" put more capital into Credit Suisse knocked sentiment further. Despite support from the Swiss National Bank and its regulator stating the bank was solvent, it was forced into a sale to UBS Group.

The decision by Swiss regulators to write down Credit Suisse's AT1 bondholders to zero, which required emergency legislation, while equity investors were not, was at odds with the established creditor hierarchy and resulted in sharp falls in similar bonds issued by other banks. However, given the importance of the AT1 bond market, regulators in Europe, UK, Hong Kong, Singapore and Canada were quick to announce they would honour the creditor hierarchy leading to a recovery in AT1 bond prices.

Not surprisingly, these events led to a sharp selloff in bank shares, particularly in other smaller US regional banks that were seen as vulnerable due to weaker capital. Initially actions by US authorities appeared to have little impact due to concerns around regional banks' commercial real estate exposure which exacerbated share price falls, but deposit flows stabilised within a few weeks. Asian, European and other bank shares stabilised quickly, as the issues were not seen as systemic.

In comparison, the second half of the financial year was relatively muted. Although US banks rallied sharply in June and July, proposals from US regulators to increase capital requirements - the so-called Basel 3 Endgame - as well as concerns about the impact of rising government bond yields saw US banks fall back to their May lows. Only when US Government bond yields started to fall on softer inflation data did banks start to perform again.

European and Japanese banks performed extremely well over the remainder of the year, the former on the back of positive earnings revisions, as analysts factored in the impact of higher interest rates on their earnings, while the latter performed on the expectation that the Bank of Japan would increase interest rates from the current -0.1%, bringing an end to its negative interest rate policy in place since 2016.

Banks' 12-month performance (2022-23)

Banks performance

Japanese Banks	38.7%
European Banks	30.3%
UK Banks	12.1%
Emerging market banks	-1.4%
Indian banks	-4.0%
Australian banks	-5.0%
Chinese banks	-10.0%
Canadian banks	-10.9%
US Banks	-12.4%
US regional banks	-26.1%

Source: Bloomberg, 30 November 2023

Note: The figures are in sterling total return terms.

Insurance

With the events in the banking sector, news flow elsewhere came a distant second. Unsurprisingly given its defensive characteristics, the insurance subsector outperformed. It also benefitted from the higher interest rate tailwinds and therefore higher investment income as well as improving underwriting returns, i.e. higher profitability.

There was concern over the subsectors' exposure to US regional banks and Credit Suisse, which led to some volatility. Some life assurance companies also have high exposure to commercial real estate which came under scrutiny, but for most of the sector, exposure was negligible or non-existent.

The implementation of IFRS 17, a new accounting standard, had a significant impact on the European insurance sector during the latter half of the year. While this standard has not changed the products, free cashflow yields or dividend prospects for the sector, it has significantly altered the reporting of results, adding yet more complexity and for many lowered reported earnings.

The reinsurance sector benefited from the withdrawal of capital by some underwriters in 2022, reflecting the poor level of profitability over the preceding few years. In particular, the increased cost of claims from so-called 'secondary perils' - floods and hailstorms - as well as higher catastrophe losses from larger events such as Hurricane Ian - which hit Florida in September 2022, generating estimated insurance losses of around $60bn, the second costliest hurricane on record - impacted profitability.

Consequently, with the drop in supply of capital underpinning the reinsurance sector but with demand unchanged at best, reinsurance rates rose sharply in January. This was estimated by the insurance broker Howden to be +37% on average. Furthermore, the attachment points, i.e. the amount of loss borne by an insurer before a reinsurer covers the cost, also increased. The impact is that either insurance companies would not be able to pass on losses for less costly events or the amount they would be able to recover would be lower.

As a result, reinsurers' share prices performed well, reflecting the much better reward from the risks they were underwriting. Nevertheless, the subsector did succumb to profit-taking towards the end of the period as lower than expected inflation data led to a rotation into more cyclical stocks that would benefit from a softer economic landing.

Diversified financials

The performance of the diversified financials sector was subdued and a headwind to performance. This sector consists of a very wide group of companies, including trust banks, investment banks, stock exchanges, asset managers, information services companies, payment companies and consumer finance companies. Despite some of the constituents of the subsector being very defensive, it is sensitive to activity in financial markets.

Asset managers saw a wide dispersion of returns. Alternative asset managers have performed extremely well in recent years, although some have come under pressure over the past year due to concerns around fundraising, valuations of their portfolio companies and the impact on performance fees from lower returns. Overall, they outperformed, with those with higher exposure to private credit strategies performing particularly well on the expectation that demand for private credit will be more resilient.

Consumer finance companies also held up better than expected reflecting the strong jobs market and household savings. Information services companies such as S&P Global and Moody's performed well, both benefiting from a resurgence in bond issuance which benefited their credit rating businesses. Berkshire Hathaway also performed reasonably well, reflecting its defensive positioning with exposure to the likes of Apple and large insurance businesses offsetting its more economically sensitive businesses.

FinTech companies saw a mixed performance. Visa and Mastercard both performed well, reflecting their defensive characteristics and benefiting from resilience of consumer spending, but payment companies such as PayPal and Adyen performed poorly over concern around margin pressure from increased competition. At the end of May 2023, MSCI designated that payment companies should move from the technology sector back to the financial sector and those companies consequently now represent 10.8% of the Benchmark.

Investment Activity

At the beginning of the period, we retained a constructive view of the outlook and despite concerns, around a potential recession, took the view that that the sector would weather it well given resilient earnings. Nevertheless, we reduced risk and increased our exposure to fixed income securities, while keeping gearing at a moderate level.

Our exposure to Asia continues to focus on the faster growing economies of India and Indonesia. While we have no exposure to Chinese state banks, in the first few months of 2023 we increased our exposure to the region to benefit from the reopening of China by adding to holdings in Hong Kong Clearing & Exchanges, BOC Hong Kong, AIA Group and Prudential. However, as economic data coming out of Asia disappointed over the course of the year, we subsequently reduced exposure in AIA Group and Prudential and sold our holdings in Hong Kong Clearing & Exchanges and BOC Hong Kong.

At the start of the period, we had a mid single-digit percentage exposure to small and mid-sized US regional banks, including Cullen/Frost Bankers, Enterprise Financial Services and East West Bancorp. This had fallen from around a low double-digit exposure in the middle of 2022. We had been reducing our positions due to concerns on capital, the impact of higher deposit costs on profitability and also their higher exposure to commercial real estate, making them more sensitive to a US recession.

We added to holdings in European banks including AIB Group and Nordea Bank while starting new positions in BNP Paribas and Intesa Sanpaolo as we saw them continuing to benefit from higher interest rates. New holdings were also bought in Intermediate Capital Group and Ares Management, both alternative asset managers that have significant private credit strategies. We continue to believe they will be beneficiaries of the much more attractive environment for credit strategies.

Following the collapse of SVB, we made more material changes to the portfolio, selling our remaining holdings in small and mid-sized regional banks on the basis that the headwinds facing US regional banks in the shorter term would cap any rally in their shares. This was done by increasing our exposure to larger US banks, albeit leaving the portfolio overall underweight in US banks relative to the benchmark.

However, as valuations for US banks dropped to levels not seen since 2016 and 2020, we started to add again to specific holdings. Barclays, in a research note, highlighted that US banks had seen the worst relative performance in 2023 versus the broader US stock market since 1937, marginally worse than their peak-to-trough underperformance during the global financial crisis (GFC), and their fourth worst year in absolute terms. For some quality names this seemed nonsensical.

We purchased call options on a US regional bank ETF to participate in a recovery in US regional bank shares. In addition we added to our holdings in Bank of America and US Bancorp. Despite concerns over the unrealised losses in their securities portfolio, we see both banks as conservative lenders and valuations were attractive. We also purchased a holding in East West Bancorp, taking our exposure back to overweight.

During the year, we started a holding in ICICI bank, a very well regarded Indian private sector bank, offset by reducing our exposure to HDFC Bank, a larger but equally well run peer. We also purchased holdings in American Express and Intercontinental Exchange (ICE), which owns the New York Stock Exchange among other businesses. ICE's shares had been lacklustre following the announcement of its acquisition of Black Knight, a mortgage software and data business where revenues were under pressure due to high interest rates, but we anticipate a reversal when the interest rate cycle turns.

We added to our reinsurance exposure by starting holdings in RenaissanceRe Holdings and Everest Group, two Bermudan reinsurance companies, partly offset by reducing our holding in Berkshire Hathaway. We also started a holding in Munich Re which we switched into following a sale of our holding in Hannover Rueck as we saw it better positioned than its German peer in the current environment. We also added to our holding in Beazley following a fall in its share price due to confusion around how the new IFRS 17 accounting standard had impacted its results.

Following the write down of Credit Suisse's AT1 bonds, we added to our fixed income exposure by either adding to or starting new holdings in AT1 bonds issued by AIB Group, BNP Paribas, CaixaBank and Banco Santander. Gearing, which started the year at 6.0%, fluctuated between 2.6% and 8.2% finishing the year at 6.5%.

Outlook

Bank Failures

Why did so many banks fail in quick succession when the banking sector is so much better capitalised, with significantly greater levels of liquidity and no signs of stress? Ultimately, the catalyst was a sharp move in interest rates which led to significant unrealised losses in banks' securities portfolios. This spooked the markets and led to a sharp outflow of deposits. While this deposit outflow, is similar to what was seen during the GFC, this time around it has not been about toxic assets on weak bank balance sheets as it was then.

The banks that failed stood out as having a high exposure to uninsured depositors so were vulnerable to any loss of confidence. For example, the three US banks with the largest concentration of uninsured deposits as a percentage of total deposits were First Republic, Signature Bank and SVB, all of which failed, with the first at 67% and the other two at close to 90%. This compares to a median for the US banking sector of approximately 40%. First Republic was in the strongest position of the three but that was not sufficient to prevent a bank run.

This is not GFC II

We did not see this as another global financial crisis as the profitability of the banking sector is vastly improved with the rise in interest rates supporting earnings, greater capital cushions and the somewhat anaemic growth in loan origination in recent years. Critically, outside the US, large banks are required to hedge their interest rate risk and are penalised with higher capital requirements if they do not do so.

The report by the Federal Reserve into SVB's failure stated: "Silicon Valley Bank failed because of a textbook case of mismanagement by the bank. Its senior leadership failed to manage basic interest rate and liquidity risk [and] Federal Reserve supervisors failed to take forceful enough action". The Federal Reserve went on to argue contentiously that rules around the regulation of banks which were relaxed under the Trump administration, had played their part in SVB's failure.

Basel 3 Endgame

While larger US banks were beneficiaries of the outflow of deposits from smaller US regional banks in March, due to their perceived safety, they were hit much harder by proposals dubbed "Basel 3 Endgame" which will increase their capital requirements if implemented. While ultimately these proposals are the final piece in the jigsaw for the post-GFC regulatory framework, they have come under criticism not only from politicians but also regulators.

JP Morgan, one of the few banks not to report a loss in 2008 and extremely well regarded for its risk management, is one of the hardest affected and estimates its capital requirements will rise by around 25%. Jamie Dimon, its Chairman and Chief Executive, has stated non-bank competitors will be "dancing in the streets" as a consequence. We believe a more resilient and safer banking system is a positive for bank shareholders, but the latest proposals appear to have not been well thought through. While banks will be able to meet the new targets with little difficulty, any easing of the proposals would be positive.

Commercial real estate

A significant percentage of most banks' balance sheets are secured against property, whether that be residential or commercial. Since the GFC, banks have materially tightened their underwriting of property loans in part as a response to new regulations. Nevertheless, in the past year investors have been understandably concerned about their exposure to offices in particular. As a result of the pandemic and changing work patterns, along with the rise in bond yields, valuations for office property have fallen sharply.

Consequently, banks in recent quarters have been increasing their provisions but as most banks' exposure to office property is limited to a low single-digit percentage of their loan books, this should be a very manageable issue. However, it is likely to remain a headwind for some banks' share prices until there is greater clarity on the outlook for real estate markets, as illustrated by the sharp fall in the share price of New York Community Bank, even though it is seen as an outlier, due to it being forced by regulators to raise the level of provisions it had set aside for potential defaults.

Positioning

The Trust's largest positions include holdings in JP Morgan, Mastercard and Visa. The following gives more detail on some of the sector where we see attractive opportunities.

Insurance

We remain positive on the outlook for the reinsurance sector where our largest holdings are Arch Capital and RenaissanceRe Holdings. The reinsurance market is cyclical and high returns will inevitably lead to the sector attracting new capital which will drive down returns. However, we have yet to see it happen in any meaningful way. Following what is known as January renewals, where a significant number of reinsurance contracts are agreed, results would suggest that underwriting returns, all things being equal, should continue to be attractive.

Many industry participants believe it is the best underwriting market in over a decade, if not longer. The biggest risk in the shorter term is an environment where investors turn much more positive on the outlook for growth globally. Cyclical sectors such as banks and therefore insurance stocks would lag such a rally. However, with valuations for the sector undemanding, arguably discounting a much worse outcome for profitability and growth, we still see good value.

UK mid-cap financials

We added to our UK mid-cap financials during the year given attractive valuations. While it is more understandable for those that are domestically focused to trade on lower valuations as international investors perceive greater risks in the UK economy than we believe is warranted, it is very evident where companies have similarly listed peers on higher valuations. Either these companies start delivering better returns to shareholders or are vulnerable to being taken private.

Consequently, among others we added to holdings in Intermediate Capital Group, as highlighted above, and started new holdings in IG Group Holdings, an online trading company, Hiscox, the property and casualty insurance business, and repurchased a holding in OSB Group, a UK bank focused on the buy-to-let market. OSB Group had seen its shares fall sharply in 2022 on the back of a profit-warning exacerbated by poor communication from management which we felt more than discounted the downside risks.

Alternative asset managers

We continue to see longer-term opportunities in alternative asset managers, so-called as they invest in assets such as private equity, private credit, infrastructure and real estate. They have seen strong inflows in recent years and with little or no pressure on fees, this has led to strong growth in profits. This contrasts with traditional long only equity and bond asset managers who have been losing market share to cheaper, passive funds and see fee compression.

The added attraction of alternative asset managers is that capital is locked up for several years, giving more certainty about future profitability. Returns for the better performing managers have been very good. While fundraising has been weaker in the past year, we expect them to benefit from the improving outlook for interest rates and growth which will allow activity in private equity markets to pick up and with that performance and flows. Holdings we own include Ares Management, EQT and Antin Infrastructure Partners.

Indian and Indonesian banks

We continue to see strong tailwinds for banks in certain emerging markets where penetration of financial services and household debt-to-GDP ratios are low. The added attraction of many banks in the region is the strength of their deposit franchises, capital levels and profitability. However, valuations reflect the stronger tailwinds and this is why we do not have larger holdings.

Emerging markets have materially underperformed developed markets over the past five years. A weaker US dollar and lower bond yields historically have been a positive for emerging markets. India and Indonesia represent our key overweight positions there, reflecting their excellent long-term growth prospects and the opportunity to invest in highly profitable, well-run banks operating in a stable regulatory framework. We have holdings in HDFC Bank, ICICI Bank, IndusInd Bank, Bank Rakyat Indonesia and Bank Central Asia among others.

European banks

Our largest European bank holdings include BNP Paribas, AIB Group and Nordea Bank. European banks have been pilloried for most of the past decade for their poor performance, albeit the European Central Bank's (ECB) monetary policy which squeezed net interest margins and their profits was a significant contributor. When taking into account the lower risk loan books of European banks, they have seen a significant increase in capital ratios over the past decade, with many carrying excess capital well over levels required by regulators.

They have benefited from the rise in interest rates but share price returns have lagged earnings growth as investors expect the ECB to lower interest rates at some point leading to declining net interest income. Equally, they have come under pressure over concerns around windfall taxes and the interest they earn on excess reserves held at the central bank. Valuations remain extremely low on almost all metrics, especially relative to wider equity markets.

Subordinated financial bonds

The events surrounding the Credit Suisse takeover and the regulator's decision to allow the complete write off of the bank's AT1 debt investors while equity investors received compensation resulted in significant volatility in the AT1 bond market. Following assurance from other regulators to respect the established creditor hierarchy the event was seen as idiosyncratic and the ATI bond market rallied.

With rising interest rates globally over the past two years, the high single-digit yields on offer across the subordinated bonds of banks and insurance companies continue to look attractive in both absolute and relative (to history) terms, especially when taking into account the greater resilience of the sector.

Summary

Ultimately it is the outlook for growth and interest rates that will decide returns over any short or medium term time period. A weaker economic outlook, all things being equal, will lead to lower share prices and vice versa. Financials are a play on a soft landing, as illustrated by the sharp jump in US bank shares on the more dovish language used by Federal Reserve Chair Jerome Powell in December when he left interest rates on hold and indicated the era of rises was over.

Many investors had assumed central banks would err on keeping interest rates higher for longer for fear of repeating the errors of the 1970s when the Federal Reserve cut aggressively only to have to raise interest rates again as inflation took hold. However, if actions follows words, a more accommodative policy will reduce the tail risk of a sharper downturn in the shorter term. Consequently, we are constructive on the outlook for the sector as the policy reduces many of the concerns around the US banking system with regard to the unrealised losses on securities portfolios and the potential for increased loan losses.

As importantly, it should help to underpin sentiment and uncertainty around the impact of higher interest rates on financial markets directly or indirectly. The sector suffers swings in sentiment and at the moment is assuming a more subdued and weaker outlook than earnings and valuations suggest. Underlying operating performance is good and will be underpinned at much higher levels unless interest rates return to the levels seen two plus years ago. Consequently, we remain very constructive on the outlook for returns from the sector over the coming year.

Nick Brind and George Barrow

Co-Managers

Polar Capital Global Financials Team

15 February 2024

Note

We would draw shareholders attention to www.polarcapitalglobalfinancialstrust.com for regular monthly portfolio updates and commentary.

Full Investment Portfolio

As at 30 November 2023

Ranking					Market Value £'000		% of total net assets
2023	2022	Stock	Sector	Country	2023	2022	2023	2022
1	(1)	JP Morgan Chase	Banks	North America	31,432	30,627	6.4%	5.7%
2	(18)	Mastercard	Financial Services	North America	27,136	9,805	5.6%	1.8%
3	(13)	Visa	Financial Services	North America	21,140	11,108	4.3%	2.1%
4	(3)	CHUBB	Insurance	Europe	19,891	22,493	4.1%	4.2%
5	(4)	Berkshire Hathaway	Financial Services	North America	16,764	21,302	3.4%	3.9%
6	(6)	Wells Fargo	Banks	North America	13,003	20,754	2.7%	3.8%
7	(2)	Bank of America	Banks	North America	13,002	25,887	2.7%	4.8%
8	(15)	Marsh & McLennan	Insurance	North America	12,308	10,041	2.5%	1.8%
9	(14)	Arch Capital	Insurance	North America	11,356	10,533	2.3%	1.9%
10	(-)	RenaissanceRe	Insurance	North America	11,237	-	2.3%	-
Top 10 investments					177,269		36.3%
11	(47)	S&P Global	Financial Services	North America	10,214	4,923	2.1%	0.9%
12	(21)	AIB Group	Banks	Europe	9,511	8,949	1.9%	1.7%
13	(20)	U.S. Bancorp	Banks	North America	8,845	8,972	1.8%	1.7%
14	(7)	HSBC Holdings	Banks	United Kingdom	8,627	14,656	1.8%	2.7%
15	(19)	Bank Rakyat	Banks	Asia (ex-Japan)	8,431	9,183	1.7%	1.7%
16	(-)	BNP Paribas	Banks	Europe	8,238	-	1.7%	-
17	(8)	AIA Group	Insurance	Asia (ex-Japan)	8,177	13,874	1.7%	2.6%
18	(40)	Nordea Bank	Banks	Europe	8,133	5,502	1.7%	1.0%
19	(-)	American Express	Financial Services	North America	7,987	-	1.6%	-
20	(34)	Royal Bank of Canada	Banks	North America	7,820	5,858	1.6%	1.1%
Top 20 investments					263,252		53.9%
21	(-)	Intesa	Banks	Europe	7,694	-	1.6%	-
22	(5)	HDFC Bank	Banks	Asia (ex-Japan)	7,607	21,022	1.6%	3.9%
23	(22)	Beazley	Insurance	United Kingdom	7,422	8,909	1.5%	1.6%
24	(-)	Muenchener Ruecker	Insurance	Europe	7,326	-	1.5%	-
25	(-)	Intercontinental Exchange	Financial Services	North America	7,271	-	1.5%	-
26	(-)	Grupo Financiero Banorte	Banks	Latin America	7,100	-	1.4%	-
27	(28)	Indusind Bank	Banks	Asia (ex-Japan)	7,055	6,898	1.4%	1.3%
28	(56)	Axis Bank	Banks	Asia (ex-Japan)	6,876	3,789	1.4%	0.7%
29	(-)	London Stock Exchange	Financial Services	United Kingdom	6,821	-	1.4%	-
30	(-)	Intermediate Capital	Financial Services	United Kingdom	6,676	-	1.4%	-
Top 30 investments					335,100		68.6%
31	(-)	BlackRock	Financial Services	North America	6,242	-	1.3%	-
32	(54)	Ares Management	Financial Services	North America	5,932	4,236	1.2%	0.8%
33	(27)	Morgan Stanley	Financial Services	North America	5,565	7,558	1.1%	1.4%
34	(38)	East West Bancorp	Banks	North America	5,496	5,660	1.1%	1.0%
35	(35)	Tisco Financial	Banks	Asia (ex-Japan)	5,174	5,805	1.1%	1.1%
36	(46)	Lancashire	Insurance	United Kingdom	5,007	5,024	1.0%	0.9%
37	(17)	Bank Central Asia Indonesia	Banks	Asia (ex-Japan)	4,946	9,890	1.0%	1.8%
38	(45)	Allianz	Insurance	Europe	4,943	5,078	1.0%	0.9%
39	(29)	Intact Financial Corporation	Insurance	North America	4,871	6,836	1.0%	1.3%
40	(-)	Bank of Cyprus	Banks	Europe	4,674	-	1.0%	-
Top 40 investments					387,950		79.4%
41	(11)	Toronto-Dominion Bank	Banks	North America	4,580	12,439	0.9%	2.3%
42	(-)	OSB Group	Financial Services	United Kingdom	4,572	-	0.9%	-
43	(-)	ICICI Bank	Banks	Asia (ex-Japan)	4,363	-	0.9%	-
44	(12)	Sumitomo Mitsui Financial	Banks	Japan	4,329	11,789	0.9%	2.2%
45	(9)	DBS Group	Banks	Asia (ex-Japan)	4,254	13,200	0.9%	2.4%
46	(-)	ING Groep	Banks	Europe	4,225	-	0.9%	-
47	(31)	The Travelers Companies	Insurance	North America	4,216	6,484	0.9%	1.2%
48	(52)	Macquarie	Financial Services	Asia (ex-Japan)	4,125	4,644	0.8%	0.9%
49	(66)	Moneybox (unquoted)	Financial Services	United Kingdom	3,773	2,310	0.8%	0.4%
50	(10)	PNC Financial Services	Banks	North America	3,740	13,112	0.8%	2.4%
Top 50 investments					430,127		88.1%
51	(30)	Standard Chartered	Banks	United Kingdom	3,717	6,552	0.8%	1.2%
52	(41)	MSCI	Financial Services	North America	3,707	5,497	0.8%	1.0%
53	(39)	Mitsubishi UFJ Financial Group	Banks	Japan	3,691	5,629	0.8%	1.0%
54	(-)	Everest Group	Insurance	North America	3,560	-	0.7%	-
55	(-)	Hiscox	Insurance	United Kingdom	3,403	-	0.7%	-
56	(60)	International Personal Finance 9.75% 2025 Bond	Fixed Income	Fixed Income	3,089	2,563	0.6%	0.5%
57	(57)	Ares Capital	Financial Services	North America	3,067	3,393	0.6%	0.6%
58	(32)	Prudential	Insurance	Asia (ex-Japan)	3,000	6,402	0.6%	1.2%
59	(-)	IG Group	Financial Services	United Kingdom	2,940	-	0.6%	-
60	(65)	Lancashire 5.625% 2041 Bond	Fixed Income	Fixed Income	2,820	2,348	0.6%	0.4%
Top 60 investments					463,121		94.9%
61	(67)	IG Group 3.125% 2028 Bond	Fixed Income	Fixed Income	2,488	2,284	0.5%	0.4%
62	(61)	Rothesay Life 4.875% Perp Bond	Fixed Income	Fixed Income	2,487	2,548	0.5%	0.5%
63	(59)	Pension Insurance 7.375% Perp Bond	Fixed Income	Fixed Income	2,480	2,576	0.5%	0.5%
64	(-)	Antin Infrastructure Partners	Financial Services	Europe	2,479	-	0.5%	-
65	(62)	Legal General Group 5.625% Perp Bond	Fixed Income	Fixed Income	2,477	2,542	0.5%	0.5%
66	(63)	Golub Capital	Financial Services	North America	2,465	2,465	0.5%	0.5%
67	(23)	Citizens Financial Group	Banks	North America	2,385	8,570	0.5%	1.6%
68	(69)	AIB Group 6.25% Perp Bond	Fixed Income	Fixed Income	2,347	2,056	0.5%	0.4%
69	(73)	Societe Generale 5.375% Perp Bond	Fixed Income	Fixed Income	2,104	1,978	0.4%	0.4%
70	(64)	VPC Specialty Lending Investments	Fixed Income	Fixed Income	2,014	2,428	0.4%	0.4%
Top 70 Investments					486,847		99.7%
71	(70)	Aviva 6.875% Perp Bond	Fixed Income	Fixed Income	2,008	2,030	0.4%	0.4%
72	(71)	Riverstone Credit Opportunities	Fixed Income	Fixed Income	1,939	2,026	0.4%	0.4%
73	(75)	BNP Paribas 7% Perp Bond	Fixed Income	Fixed Income	1,762	1,867	0.4%	0.3%
74	(-)	CaixaBank 8.25% Perp Bond	Fixed Income	Fixed Income	1,747	-	0.4%	-
75	(78)	Rothesay Life 6.875% Perp Bond	Fixed Income	Fixed Income	1,672	1,675	0.3%	0.3%
76	(72)	Barclays 8.875% Perp Bond	Fixed Income	Fixed Income	1,562	1,978	0.3%	0.4%
77	(81)	Provident Financial 8.875% 2032 Bond	Fixed Income	Fixed Income	1,535	1,593	0.3%	0.3%
78	(-)	VEF	Financial Services	Europe	1,526	-	0.3%	-
79	(-)	Investec	Fixed Income	Fixed Income	1,391	-	0.3%	-
80	(85)	Rothesay Life 5% Perp Bond	Fixed Income	Fixed Income	1,386	206	0.3%	0.0%
Top 80 Investments					503,375		103.1%
81	(-)	Cab Payments	Financial Services	United Kingdom	1,378	-	0.3%	-
82	(68)	Atom Bank (unquoted)	Banks	United Kingdom	1,281	2,241	0.3%	0.4%
83	(76)	Nationwide Building Society 5.75% Perp Bond	Fixed Income	Fixed Income	1,258	1,785	0.3%	0.3%
84	(83)	Shawbrook Group 9% 2030 Bond	Fixed Income	Fixed Income	1,246	480	0.3%	0.1%
85	(-)	CaixaBank 5.25% Perp Bond	Fixed Income	Fixed Income	1,240	-	0.3%	-
86	(-)	Quilter 8.625% 2033 Bond	Fixed Income	Fixed Income	1,211	-	0.2%	-
87	(-)	Shawbrook Group 12.25% 2034 Bond	Fixed Income	Fixed Income	1,194	-	0.2%	-
88	(-)	Hellenic Bank 10.25% 2033 Bond	Fixed Income	Fixed Income	1,065	-	0.2%	-
89	(82)	Chesnara 4.75% 2032 Bond	Fixed Income	Fixed Income	1,049	1,275	0.2%	0.2%
90	(-)	Litigation Capital Management	Financial Services	Asia (ex-Japan)	1,049	-	0.2%	-
Top 90 Investments					515,346		105.6%
91	(-)	Banco Bilbao Vizcaya Argentaria 8.375% Perp Bond	Fixed Income	Fixed Income	891	-	0.2%	-
92	(-)	Personal Group	Insurance	United Kingdom	566	-	0.1%	-
93	(84)	Jupiter 8.875% 2030 Bond	Fixed Income	Fixed Income	448	456	0.1%	0.1%
94	(-)	Admiral Group 8.5% 2034 Bond	Fixed Income	Fixed Income	368	-	0.1%	-
95	(-)	RL Finance Bonds NO 6 10.125% Perp Bond	Fixed Income	Fixed Income	310	-	0.0%	-
96	(-)	Permanent TSB Group 13.25% Perp Bond	Fixed Income	Fixed Income	195	-	0.0%	-
Total Investments					518,124		106.1%
Other net liabilities					(29,926)		(6.1%)
Total net assets					488,198		100.0%

Note: Figures in brackets denote comparative rankings as at 30 November 2022.

Portfolio Review

As at 30 November 2023

Geographical Exposure*	Benchmark weighting as at 30 November 2023**	30 November 2023	30 November 2022
North America	55.3%	52.2%	50.1%
Europe	15.3%	16.2%	15.5%
Asia (ex-Japan)	15.7%	13.3%	19.8%
United Kingdom	4.1%	11.6%	9.4%
Fixed Income	-	9.7%	7.8%
Japan	4.3%	1.7%	3.2%
Latin America	1.6%	1.4%	-
Other net liabilities	-	(6.1%)	(5.8%)
Total		100.0%	100.0%

Sector Exposure*	Benchmark weighting as at 30 November 2023**	30 November 2023	30 November 2022
Banks	41.8%	43.3%	60.1%
Financial Servies	38.1%	31.2%	17.2%
Insurance	20.1%	21.9%	20.7%
Fixed Income	-	9.7%	7.8%
Other net liabilities	-	(6.1%)	(5.8%)
Total		100.0%	100.0%

Market Capitalisation*	Benchmark weighting as at 30 November 2023**	30 November 2023	30 November 2022
Large (>US$5bn)	99.0%	95.5%	98.7%
Medium (US$0.5bn - US$5bn)	1.0%	8.7%	5.9%
Small (<US$0.5bn)	-	1.9%	1.2%
Other net liabilities	-	(6.1%)	(5.8%)
Total		100.0%	100.0%

* Based on the net assets as at 30 November 2023 of 488.2m(2022: £541.3m)

**The classifications are derived from the Benchmark as far as possible. Not all geographical areas or sectors of the Benchmark are shown, only those in which the Company had an investment at the year end.

STRATEGIC REPORT

The Strategic Report section of this Annual Report comprises the Chair's Statement, the Investment Manager's Report, including information on the portfolio, and this Strategic Report. This Report has been prepared to provide information to Shareholders on the Company's strategy and the potential for this strategy to succeed, including a fair review of the Company's performance during the year ended 30 November 2023, the position of the Company at the year end and a description of the principal risks and uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Business Model and Regulatory Arrangements

The Company's business model follows that of an externally managed investment trust providing Shareholders with access to a portfolio of mostly listed or quoted securities issued by companies in the financials sector. Its shares are listed on the main market of the London Stock Exchange.

The Company is designated an Alternative Investment Fund ('AIF') under the Alternative Investment Fund Management Directive ('AIFMD') and, as required by the Directive, has contracted with Polar Capital LLP to act as the Alternative Investment Fund Manager ('AIFM') and HSBC Bank Plc to act as the Depositary.

Both the AIFM and the Depositary have responsibilities under AIFMD for ensuring that the assets of the Company are managed in accordance with the investment policy and are held in safe custody. The Board remains responsible for setting the investment strategy and operational guidelines as well as meeting the requirements of the Financial Conduct Authority ('FCA') Listing Rules and the Companies Act 2006.

The AIFMD requires certain information to be made available to investors in AIFs before they invest and requires that material changes to this information be disclosed in the Annual Report of each AIF. Investor Disclosure Documents, which set out information on the Company's investment strategy and policies, gearing, risk, liquidity, administration, management, fees, conflicts of interest and other Shareholder information are available on the Company's website.

There have been no material changes to the information requiring disclosure. Any information requiring immediate disclosure pursuant to the AIFMD will be disclosed to the London Stock Exchange. Statements from the Depositary and the AIFM can be found on the Company's website.

Investment Objective and Policy

The Company's investment objective is to generate for investors a growing dividend income together with capital appreciation. The Company seeks to achieve its objective by investing in a global portfolio primarily consisting of listed or quoted securities issued by companies in the financials sector operating in banking, insurance, property and other subsectors. The portfolio is diversified by geography, industry subsectors and stock market capitalisation.

The Company may have a small exposure to unlisted and unquoted companies, but in aggregate, this is not expected to exceed 10% of total assets at the time of investment. The Company will not invest more than 10% of total assets, at the time of investment, in other listed closed-ended investment companies and no single investment will normally account for more than 10% of the portfolio at the time of investment.

The Company may employ levels of borrowing from time to time with the aim of enhancing returns This is currently subject to an overall maximum of 20% (increased from 15% at the time of the reconstruction in April 2020) of net assets at the time the relevant borrowing is taken out. Actual levels of borrowing may change from time to time based on the Manager's assessment of risk and reward. The Company may invest through equities, index-linked and other debt securities, cash deposits, money market instruments, foreign currency exchange transactions, forward transactions, index options and other instruments including derivatives. Forward transactions, derivatives (including put and call options on individual positions or indices) and participation notes may be used to gain exposure to the securities of companies falling within the Company's investment policy or to seek to generate income from the Company's position in such securities, as well as for efficient portfolio management. Any use of derivatives for investment purposes is made based on the same principles of risk spreading and diversification that apply to the Company's direct investments. The Company may hedge exposure to foreign currencies if considered appropriate for efficient portfolio management.

Strategy and Investment Approach

The Manager's investment process is a six-stage process primarily driven by a bottom-up fundamental analysis of individual companies, with macroeconomic inputs. The Manager uses both quantitative and qualitative screens to rank companies on a risk-adjusted basis. The approach involves undertaking a detailed income statement and balance sheet analysis and values a company based on the Capital Asset Pricing Model that compares a company's return on equity to its cost of capital (the latter taking account of both stock and country risk) to provide a fair price/ book valuation. This valuation (coupled with other more standard valuation systems) is then ranked across the global universe and added to scores focused on other variables such as profitability, risk, ESG and growth metrics to provide a model portfolio and a focus for additional stock-specific research. The Portfolio Managers undertake trips to the US, Europe and Asia to meet companies as well as regularly meeting companies at various conferences and at the Polar offices.

There are no limits on the exposure of the investment portfolio to either small or mid-cap companies but the majority of the portfolio is invested in companies with a market capitalisation greater than US$5bn. The Manager has discretion to invest up to 10% of the portfolio in debt securities.

The investment portfolio is primarily invested in companies that not only offer capital appreciation but pay dividends, which are expected to rise over time, so as to meet the necessary income required to facilitate the payment of a rising level of dividends to Shareholders. The Board, together with the Manager will continue to assess the likely income capability of the portfolio to determine the appropriate longer-term distribution level.

Service Providers

Polar Capital LLP has been appointed to act as the Investment Manager and AIFM as well as to provide or procure company secretarial, marketing and administrative services, including accounting and portfolio valuation which it has arranged to deliver through HSBC Securities Services ("HSS").

The Company also contracts directly, on terms agreed periodically, with several third parties for the provision of specialist services:

· HSBC Securities Services as Custodian and Depositary;

· Stifel Nicolaus Europe Limited as Corporate Broker;

· Equiniti Limited as Share Registrars;

· PricewaterhouseCoopers LLP as Independent Auditors;

· RD:IR for Investor Relations and Shareholder Analysis;

· Marten & Co as third-party research providers;

· Camarco as PR advisors;

· Perivan as Designers and Printers for shareholder communications; and

· Huguenot Limited as Website Designers and internet hosting services.

Benchmark

The Company measures the Manager's performance against the MSCI ACWI Financials Net Total Return Index ('the Benchmark'). This has been used to measure the performance of the Company since 23 April 2020. The Manager does not seek to replicate the index in constructing the Company's portfolio. The portfolio may, therefore, diverge substantially from the constituents of the Benchmark.

Although the Company evaluates its performance against the Benchmark, this is neither a target nor a determinant of investment strategy. The purpose of the Benchmark is to set out a reasonable measure of performance for Shareholders and an appropriate base which, together with an additional hurdle, forms the level above which the Manager earns a performance fee.

Investment Management Company and Management of the Portfolio

As the Company is an investment vehicle for Shareholders, the Directors have sought to ensure that the business of the Company is managed by a leading specialist investment management team and that the investment strategy is attractive to Shareholders. The Directors believe that a strong working relationship with the Manager will achieve the optimum return for Shareholders. As such, the Board and Manager operate in a supportive, co-operative and open environment.

The Investment Manager is Polar Capital LLP ("Polar Capital") which is authorised and regulated by the Financial Conduct Authority, to act as Investment Manager and AIFM of the Company with sole responsibility for the discretionary management of the Company's assets (including uninvested cash) and sole responsibility for decisions as to the purchase and sale of individual investments. The Manager also has responsibility for asset allocation within the limits of the investment policy and guidelines established and regularly reviewed by the Board, all subject to the overall control and supervision of the Board.

Information is provided to the Directors on a timely basis, covering all aspects of relevant management, regulatory and financial information. The Board receives a report from the Manager at each Board meeting and may ask representatives of the Manager to attend Board meetings enabling Directors to probe further on matters of concern or seek clarification as appropriate. While the Board reviews the performance of the Manager at each Board meeting, and the Company's performance against the Benchmark and a peer group of funds with similar objectives, the Management Engagement Committee formally carries out an annual review of the Manager and other suppliers' performance during the year.

Polar Capital provides a team of financial specialists and the portfolio is jointly managed by Mr Nick Brind and Mr George Barrow, supported by other financials specialists within the team. The Manager has other investment resources which support the investment team and has experience in administering and managing other investment companies.

Termination Arrangements

The IMA may be terminated by either party giving 12 months' notice. The IMA may be terminated earlier by the Company with immediate effect on the occurrence of certain events, including: (i) if an order has been made or an effective resolution passed for the liquidation of the Manager; (ii) if the Manager ceases or threatens to cease to carry on its business; (iii) where the Company is required to do so by a relevant regulatory authority; (iv) on the liquidation of the Company; or (v) subject to certain conditions, where the Manager commits a material breach of the IMA. In the event the IMA is terminated by the Company, except in the event of termination by the Company for certain specified causes, the base fee and the performance fee will be calculated pro rata for the period up to and including the date of termination.

Fee Arrangements

Management Fee

Under the terms of the IMA, the Manager is entitled to a management fee together with reimbursement of reasonable expenses incurred by it in the performance of its duties. The Management fee is payable monthly in arrears and, with effect from 7 April 2020, is charged at a rate of 0.70% per annum of the Company's NAV. In accordance with the Directors' policy on the allocation of expenses between income and capital, in each financial year 80% of the management fee payable is charged to capital and the remaining 20% to revenue.

Performance Fee

The Manager may be entitled to a performance fee equal to 10% of the excess of the performance fee hurdle and payable at the end of each five-year period, the first period being from 23 April 2020 to 30 June 2025 and at five yearly intervals thereafter.

For the purposes of calculating the performance fee, the Company's NAV (adjusted to reflect dividends paid, and any performance impact caused by the issue or buyback of ordinary shares) at 30 June 2025, being the end of the relevant Performance Period, will be used. No performance fee has been paid or accrued as at 30 November 2023. Where a performance fee becomes payable it will be charged 100% to capital.

Performance and Key Performance Objectives

The Board appraises the performance of the Company and the Manager as the key supplier of services to the Company against key performance indicators ('KPIs'). The objectives of the KPIs comprise both specific financial and Shareholder related measures. These KPIs have not differed from the prior year.

KPI

Control process

Outcome

The provision of investment returns to Shareholders measured by long-term NAV total return relative to the Benchmark and a comparator group.

The Board reviews at each meeting the performance of the portfolio and considers the views of the Manager and the value delivered to Shareholders through NAV growth and dividends paid.

The Board also receives monthly reports on performance against both the Benchmark and a comparator group of open-ended investment funds.

The Company's NAV total return, over the year ended 30 November 2023, was -2.8%*while the Benchmark delivered 0.3% over the same period. Since inception the NAV total return was 119.7%* compared to 135.6% for the Benchmark and 103.5% for a comparator group.

The Company ranks 13 out of a comparator group of 31 open ended funds within the Lipper Financial Sector universe since inception and 5 out of 7 within a smaller comparable group of funds regularly considered by the Board as at 30 November 2023.

The achievement of a progressive dividend policy.

Financial forecasts are reviewed to track income and Distributions.

A total of two interim dividends amounting to 4.55p (2022: 4.45p) per ordinary share have been paid or declared in respect of the financial year ended 30 November 2023. While the aim to achieve dividend growth remains there is no guarantee that this can be achieved.

Monitoring and reacting to issues created by the discount or premium of the ordinary share price to the NAV per ordinary share with the aim of reducing volatility for Shareholders.

The Board receives regular information on the composition of the share register including trading patterns and discount/premium levels of the Company's ordinary shares. The Board discusses and authorises the issue or buy back of shares when appropriate.

The Board is aware of the vulnerability of a sector specialist investment trust to a change in investor sentiment towards that sector. While there is no formal policy the Board discusses the market factors giving rise to any discount or premium, the long or short-term nature of those factors and the overall benefit to Shareholders of any mitigating actions. The market liquidity is also considered when authorising the issue or buy back of shares when appropriate market conditions prevail.

A daily NAV per share, calculated in accordance with the AIC guidelines is issued to the London Stock exchange.

The discount of the ordinary share price to the NAV per ordinary share at the year-end was 12.2%* compared with a discount of 7.0% at the year ended 30 November 2022. The discount for the investment trust sector at 30 November 2023 was 15.7%.

During the year under review, the Company bought back 16,532,313 ordinary shares at an average discount of 10.5%. After the year end and up to 13 February 2024, the Company bought back a further 2,311,282 shares. All shares bought back have been placed into treasury for reissue to the market under the appropriate conditions.

To qualify and continue to meet the requirements for Sections 1158 and 1159 of the Corporation Tax Act 2010 ('investment trust status').

The Board receives regular financial information which discloses the current and projected financial position of the Company against each of the tests set out in Sections 1158 and 1159.

The Company has been granted investment trust status annually since its launch on 1 July 2013 and is deemed to be granted such status for each subsequent year subject to the Company continuing to satisfy the conditions of Section 1158 of the Corporation Tax Act 2010 and other associated ongoing requirements.

The Directors believe that the tests have been met in the financial year ended 30 November 2023 and will continue to be met.

Efficient operation of the Company with appropriate investment management resources and services from third party suppliers within a stable and risk controlled environment.

Annually the Board considers the services provided by the Manager, both investment and administrative, and reviews the provision of services from third parties including the costs of their services.

The annual operating expenses are reviewed and any non-recurring project related expenditure approved by the Board.

The Board, through the Audit Committee has received and considered satisfactory the internal controls report of the Manager and other key suppliers including contingency arrangements to facilitate the ongoing operations of the Company in the event of withdrawal or failure of services.

The ongoing charges for the year ended 30 November 2023 excluding the performance fee were 0.86% of net assets (2022: 0.87%)*. The ongoing charges including the performance fee payable were 0.86% (2022: 0.65%)*. The decrease in ongoing charges including performance fee in the prior year reflects the write back of the performance fee accrual during FY22

* Alternative Performance Measures, see below for further explanations.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board is responsible for the management of risks faced by the Company. Through delegation to the Audit Committee, it has established procedures to manage risk, oversee the internal control framework and determine the nature and extent of the principal risks the Company is willing to take to achieve its long-term strategic objectives.

The established risk management process the Company follows identifies and assesses various risks, their likelihood, and possible severity of impact, considering both internal and external controls and factors that could provide mitigation. A post mitigation risk impact score is then determined for each principal risk.

The Audit Committee carries out, at least annually, a robust assessment of the principal risks and uncertainties. With the assistance of the Manager, it continually monitors identified risks and meets to discuss both long-term and emerging risks.

During the year the Audit Committee, in conjunction with the Board and the Manager, undertook a full review of the Company's Risk Map including the mitigating factors and controls to reduce the impact of the risks. The Committee continues to closely monitor these risks along with any other emerging risks as they develop and implements mitigating actions as necessary.

The Committee is mindful of the continued impact of geopolitical events as well as the effects of inflation and rising interest rates. While there are signs of inflation slowing and energy prices reducing, the continuation of the Russian war on Ukraine, and also the Middle East crisis has created further market volatility. This continues to impact supply chains, while high interest rates continue to affect consumers. Geopolitical events such as these can have a significant impact on global financial markets, and the global economy. Further information on how the Committee has assessed the Company's ability to operate as a going concern and the Company's longer-term viability are found in the Annual Report and the Report of the Audit Committee.

Investor Manager Performance
Principal Business Risks and Uncertainties	Management of Risks through Mitigation & Controls
Failure to achieve investment objective, investment performance below agreed benchmark objective or market/ industry average.	The Board seeks to manage the impact of such risks through regular reporting and monitoring of investment performance against a comparator group of open-ended funds, the Benchmark and other agreed indicators of relative performance. In months when the Board is not scheduled to meet, it receives a monthly report containing financial information on the Company including gearing and cash balances. Performance and strategy are reviewed throughout the year at regular Board meetings where the Board can challenge the Manager. The Board also receives a monthly commentary from the Manager in the form of factsheets for all the specialist financial sector funds managed by Polar Capital. The Board is committed to a clear communication programme to ensure Shareholders understand the investment strategy. This is maintained using monthly factsheets which have a market commentary from the Manager as well as portfolio data, an informative website as well as annual and half year reports. The Management Engagement Committee considers the suitability of the Manager based on performance and other services provided.
Loss of portfolio manager or other key staff.	The strength and depth of investment team provides comfort that there is not over-reliance on one person with alternative portfolio managers available to act if needed. For each key business process roles, responsibilities and reporting lines are clear and unambiguous. Key personnel are incentivised by equity participation in the investment management company.
Gearing, either through bank debt or the use of derivatives may be utilised from time to time. Whilst the use of gearing is intended to enhance the NAV total return, it will have the opposite effect when the return on the Company's investment portfolio is negative.	The arrangement of any new banking facilities and gearing limits under such arrangements are controlled by the Board. Derivatives are considered as a form of gearing and their use has been agreed by the Board. The deployment of borrowed funds (if any) is based on the Manager's assessment of risk and reward. At 30 November 2023 the Company was 6.5% geared (2022: 6.0%).
The ability to continue the dividend policy may be compromised due to lower income because of changes in underlying companies' policies or changes in the portfolio construction, regulatory intervention, local taxes because of the currency exposure underlying the portfolio. This could result in a lower level of dividend being paid than intended or previously paid	The Board monitors income and currency exposure through monthly management accounts and discussion. In the event of there being insufficient income during the financial year the Company has built up revenue reserves on which to draw to pay dividends. Equally, in the event of the revenue reserves being fully utilised the Company may use other distributable reserves. The Board and the Manager will continue to assess the income capability of the portfolio and determine the appropriate longer-term dividend level based on how economies and businesses perform.
Market, Economic and Political Risk
Principal Business Risks and Uncertainties	Management of Risks through Mitigation & Controls
While the portfolio is diversified across a number of stock markets worldwide, the investment mandate is focused on financials and thus the portfolio is more sensitive to investor sentiment and the commercial acceptance of the sector than a general investment portfolio. The Company's portfolio is exposed to risks such as market price, credit, liquidity, foreign currency and interest rates. The portfolio is actively managed. The Manager's style focuses primarily on the investment opportunity of individual stocks and, accordingly, may not follow the makeup of the Benchmark. This may result in returns which are not in line with the Benchmark. The degree of risk which the Manager incurs in order to generate the investment returns and the effect of gearing on the portfolio by borrowed funds can magnify the portfolio returns per share positively or negatively.	The Board has set appropriate investment limits against which it monitors the position of the portfolio. They include guidelines on exposures to certain investment markets and sectors. The Board discusses with the Manager at each Board meeting its views on the sector. At each Board meeting the composition and diversification of the portfolio by geographies, sectors and capitalisations are considered along with sales and purchases of investments. Individual investments are discussed with the Manager as well as the Manager's general views on the various investment markets and the financials sector. Analytical performance data and attribution analysis is presented by the Manager. The policies for managing the risks posed by exposure to market prices, interest rates, foreign currency exchange rates, credit and liquidity are set out in the financial statements. Shareholders have sight of the entire portfolio and geographic exposure of investments.
There is significant exposure to the economic cycles of the markets in which the underlying investments conduct their business operations as well as the economic impact on investment markets where such investments are listed. The fluctuations of exchange rates can also have a material impact on Shareholder returns.	The Board regularly discusses global geopolitical issues and general economic conditions and developments. The impact on the portfolio from other geopolitical changes is monitored through existing control systems and discussed regularly by the Board. The longer-term effects of geopolitical events will continue to be assessed by the Audit Committee in light of how they will impact the Company's portfolio and the overall economic and geopolitical environment in which the Company operates. Note 27 in the Annual Report describes the risks posed by changes in foreign exchange rates. The Manager can hedge foreign currency if it is thought appropriate at the time.
Operational and Regulatory Risk
Principal Business Risks and Uncertainties	Management of Risks through Mitigation & Controls
There are risks from the failure of, or disruption to, operational and accounting systems and processes provided by the Manager including any subcontractors to which the Manager has delegated a task as well as directly appointed suppliers. The mis-valuation of investments or the loss of assets from the custodian or sub custodians could affect the NAV per share or lead to a loss of Shareholder value. There is taxation risk that the Company may fail to continue as an investment trust and suffer capital gains tax or fail to recover as fully as possible withholding taxes on overseas investments. The legal and regulatory risks include failure to comply with the FCA's Prospectus Rules, Listing Rules and Disclosure Guidance and Transparency Rules; not meeting the provisions of the Companies Act 2006 and other UK and overseas legislation affecting UK companies and not complying with accounting standards. Further risks arise from not keeping abreast of changes in legislation and regulations which have in recent years been substantial.	At each Board meeting the Board receives an administration report that provides details on general corporate matters including legislative and regulatory developments and changes. The Board conducts an annual review of suppliers and their internal control reports, which includes the disaster recovery procedures of the Manager. Regular reporting from the Depositary on the safe custody of the Company's assets and the operation of control systems related to the portfolio reconciliation is monitored. Specialist advice is sought on taxation issues as and when required. The Audit Committee has oversight of such work. Information and guidance on legal and regulatory risks is managed by using the Manager or professional advisers where necessary and the submission of reports to the Board for discussion and, if required, any remedial action or changes considered necessary. The Board monitors new developments and changes in the regulatory environment. Whilst it has no control over such changes, the Board seeks to ensure that their impact on the Company is understood and complied with.
Cyber-attack causing disruption to or failure of operational and accounting systems and processes provided by the Investment Manager creating an unexpected event and/or adverse impact on personnel or the portfolio.	The number, severity and success rate of cyber-attacks have increased considerably over recent years. Detailed controls are in place and the Board proactively seeks to keep abreast of developments through updates with representatives of the Investment Manager who undertakes meetings with relevant service providers.
Investor Relations and Stewardship
Principal Business Risks and Uncertainties	Management of Risks through Mitigation & Controls
Persistent excessive share price premium/discount to NAV.	In consultation with its advisors, including the corporate broker, the Board regularly considers the level of the share price premium/discount to the NAV and the Board reviews ways to enhance Shareholder value including share issuance and buy backs.
Failure to communicate effectively and timeously with investors or the issuance of erroneous or misleading information.	Polar Capital Sales Team and the Corporate Broker provide periodic reports to the Board on communications with shareholders and feedback received. The Board is committed to a clear communication programme to ensure Shareholders understand the investment strategy. This is maintained using monthly factsheets which have a market commentary from the Investment Manager as well as portfolio data, an informative website as well as annual and half year reports. Contact details and how to contact the Board are provided in regulatory announcements and the Board are present at the AGM to speak to shareholders.

SECTION 172 OF THE COMPANIES ACT 2006

The statutory duties of the Directors are listed in s171-177 of the Companies Act 2006. Under s172, Directors have a duty to promote the success of the Company for the benefit of its members (its Shareholders) as a whole and in doing so have regard to the consequences of any decision in the long term, as well as having regard to the Company's wider stakeholders amongst other considerations. The fulfilment of this duty not only helps the Company achieve its Investment Objective but ensures decisions are made in a responsible and sustainable way for Shareholders.

To ensure that the Directors are aware of, and understand, their duties, they are provided with an induction when they first join the Board, including details of all relevant regulatory and legal duties as a director and continue to receive regular and ongoing updates on relevant legislative and regulatory developments. They also have continued access to the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek independent professional advice. The Schedule of Matters Reserved for the Board, as well as the Terms of Reference of its committees, are reviewed annually and further describe Directors' responsibilities and obligations and include any statutory and regulatory duties.

The Board seeks to understand the needs and priorities of the Company's stakeholders and these are taken into account during discussions and as part of the decision-making process. As an externally managed investment company, the Company does not have any employees or customers, however the key stakeholders and a summary of the Board's consideration and actions where possible in relation to each group of stakeholders are described in the table below.

Stakeholder Group	How we engage with them
Shareholders	The Directors have considered this duty when making the strategic decisions during the year that affect Shareholders, including the continued appointment of the Investment Manager and the recommendation that Shareholders vote in favour of the resolutions for the Company to continue and to renew the allotment and buy back authorities at the AGM. The Directors have also engaged with and taken account of Shareholders' interests during the year. The Company's AGM will be held at 2:00pm on Thursday 18 April 2024 at the offices of Polar Capital, 16 Palace Street, London SW1E 5JD. The Board recognises that the AGM is an important event for Shareholders and the Company and is keen to ensure that Shareholders can exercise their right to vote and participate. Any changes to these arrangements will be communicated through the Company's website and via a Regulatory Information Service announcement. The Board believes that shareholder engagement remains important, especially in the current market conditions and is keen that the AGM be a participative event for all. Shareholders will have the opportunity to hear a pre-recorded presentation from the Manager's, reviewing the Company's performance in the year and the outlook for 2023-2024, in advance of the AGM. The presentation will be uploaded to the Company's website ahead of the AGM. In addition, Shareholders will be able to watch the proceedings of the AGM live via Zoom Conference. Details of how to access the online link are provided in the Notice of AGM. The AGM in-person meeting will comprise the formal business and questions only. Shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at cosec@polarcapital.co.uk stating the subject matter as PCFT-AGM. The Chair of the Board and of the Committees, along with the Managers, will attend the AGM and will be available to respond to questions and concerns from Shareholders. Should any significant votes be cast against a resolution, the Board will engage with Shareholders and explain in its announcement of the results of the AGM the actions it intends to take to consult Shareholders to understand the reasons behind the votes against. Following the consultation, an update will be published no later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed. Relations with Shareholders The Board and the Manager consider maintaining good communications and engaging with Shareholders through meetings and presentations a key priority. The Board regularly considers the share register of the Company and receives regular reports from the Manager and the Corporate Broker on meetings attended with Shareholders and any concerns that are raised in those meetings. The Board reviews any correspondence from Shareholders and members of the Board attend Manager presentations to investors. Shareholders are kept informed by the publication of annual and half year reports, monthly fact sheets, access to commentary from the Manager via the Company's website and attendance at events at which the Manager presents. Shareholders can raise any concerns directly with the Chair or the Board without intervention of the Manager or Company Secretary. They may do this either in person at the AGM or at other events, or in writing either via the registered office of the Company or to the Chair's specific email address Chair.PCFT@polarcapital.co.uk. The Company, through the sales and marketing efforts of the Manager, encourages retail investment platforms to engage with underlying Shareholders in relation to Company communications and enable those Shareholders to cast their votes on Shareholder resolutions; the Company however has no responsibility over such platforms. The Board therefore encourages Shareholders invested via platforms to regularly visit the Company's website or to contact the Company directly to obtain copies of Shareholder communications. The Company has made arrangements with its registrar for Shareholders who own their shares directly rather than through a nominee or share scheme to view their account online at www.shareview.co.uk. Other services are available via this website. Outcomes and strategic decisions during the year Buybacks Further to shareholder authority being granted, the Company has the facility to conduct share buy backs when, in normal market conditions, it is in the best interests of shareholders to do so. The Company bought back a total of 16,532,313 shares during the year under review. After the year end and up to 13 February 2024, the Company bought back a further2,311,282 shares. AGM To enable more shareholders the opportunity to hear the Investment Manager's AGM presentation, the Board has opted to pre-record and upload this to the website ahead of the voting deadline and in-person formal business AGM. In addition, shareholders can watch the proceedings of the AGM live via Zoom Conference. Details of how to access the online link are provided in the Notice of AGM.
Manager	Through the Board meeting cycle, regular updates and the work of the Management Engagement Committee in reviewing the services of the Manager annually, the Board is able to safeguard Shareholder interests by: • Ensuring adherence to the Investment Policy; • Ensuring excessive risk is not undertaken in the pursuit of investment performance; • Ensuring adherence to the Investment Management Agreement and reviewing the agreed management and performance fees; • Ensuring compliance with statutory legal requirements, regulations and other advisory guidance such as consumer duty and aspects of operational resilience; and • Reviewing the Manager's decision making and consistency of its investment process. Maintaining a close and constructive working relationship with the Manager is crucial as the Board and the Manager both aim to continue to deliver consistent, long-term returns in line with the Investment Objective. The culture which the Board maintains to achieve this involves encouraging open discussion with the Manager, ensuring that the interests of Shareholders and the Manager are aligned, providing constructive challenge and making Directors' experience available to support the Manager. This culture is aligned with the collegiate and meritocratic culture which Polar Capital has developed and maintains. Outcomes and strategic decisions during the year ESG The Board continued to engage with the Investment Manager to oversee how ESG has been integrated into the overall house methodology as well as the bespoke financials team investment approach, engagement and decision making. The Board also receives information on how ESG affects Polar Capital as a business and the financials team. Consumer Duty The Board has worked with the Investment Manager to ensure the obligations of the new Consumer Duty regulations are appropriately applied to the Company. In light of the obligations, all communications including the website, fact sheets and other published documentation, have been reviewed to ensure they are appropriate for all end users. A 'value for money' assessment has also been undertaken and is made available to distributors on request for their due diligence processes. Management On the recommendation of the Management Engagement Committee the Board has resolved to the continue the appointment of the Manager on the terms agreed within the Investment Management Agreement.
Investee Companies	The Board has instructed the Manager to consider the published corporate governance policies of the companies in which they invest. The Board has also considered the Investment Manager's Stewardship Code and Proxy Voting Policy. The Voting Policy is for the Investment Manager to vote at all general meetings of companies in favour of resolutions proposed by the management where it believes that the proposals are in the interests of shareholders. However, in exceptional cases, where the Investment Manager believes that a resolution would be detrimental to the interests of shareholders or the financial performance of the Company, appropriate notification will be given and abstentions or a vote against will be lodged. The Manager voted at 75 company meetings over the year ended 30 November 2023, with 7% of all votes being against management and 35% of meetings having at least one vote against, withheld or abstained. The Manager reports to the Board, when requested, on the application of the Stewardship Code and Voting Policy. The Manager's Stewardship Code and Voting Policy can be found on the Manager's website in the Corporate Governance section (www.polarcapital.co.uk). Further information on how the Manager considers ESG in its engagement with investee companies can be found in the ESG Report in the Annual Report. Outcomes and strategic decisions during the year The Board receives information on the ratings of investee companies and can use this as a tool to inform discussions with the Manager during Board meetings.
Service Providers	The Directors oversee the Company's service providers through the annual cycle of reporting and due diligence meetings or site visits undertaken by the Manager. This engagement is undertaken with the aim of having effective oversight of delegated services, seeking to improve the processes for the benefit of the Company and to understand the needs and views of the Company's service providers, as stakeholders in the Company. Further information on the Board's engagement with service providers is included in the Corporate Governance Statement and the Report of the Audit Committee. During the year under review, due diligence meetings have been undertaken by the Investment Manager and where possible, service providers have joined meetings to present their reports directly to the Board or the Audit Committee as appropriate. Outcomes and strategic decisions during the year The reviews of the Company's service providers have been positive and the Directors believe their continued appointment is in the best interests of Shareholders. The accounting and administration services of HSBC Securities Services (HSS) are contracted through Polar Capital and provided to the Company under the terms of the IMA. However, the Board continues to conduct due diligence service reviews in conjunction with the Company Secretary and is satisfied that the services received continue to be of a satisfactory standard.
Proxy Advisors	The support of the major institutional investors and proxy adviser agencies is important to the Directors, as the Company seeks to retain a reputation for high standards of corporate governance, which the Directors believe contributes to the long-term sustainable success of the Company. The Directors consider the recommendations of these various proxy voting agencies when contemplating decisions that will affect Shareholders and when reporting to Shareholders through the Half Year and Annual Reports. Recognising the principles of stewardship, as promoted by the UK Stewardship Code, the Board welcomes engagement with all its investors. The Board recognises that the views, questions from, and recommendations of many institutional investors and proxy adviser agencies provide a valuable feedback mechanism and play a part in highlighting evolving shareholders' expectations and concerns. Outcomes and strategic decisions during the year Where possible the Chair and other representatives of the Company have engaged with the stewardship teams of some larger investors to understand and address their expectations in terms of board governance, recruitment and diversity. Prior to AGMs, the Company engages with these agencies to fact check their advisory reports and clarify any areas or topics contained within the report. This ensures that whilst the proxy advisory reports provided to shareholders are objective and independent, the Company's actions and intentions are represented as clearly as possible to assist with shareholders' decision making when considering the resolutions proposed at the AGM.
AIC	The Company is a member of the AIC and has supported various lobbying activities. Representatives of the Manager sit on a variety of forums run by the AIC which aids development and understanding of new policies and procedures. The Directors may cast votes in the AIC Board Elections each year and regularly attend AIC events.

Approved by the Board on 15 February 2024.

By order of the Board

Jumoke Kupoluyi, ACG

Polar Capital Secretarial Services Limited

Company Secretary

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have prepared the Financial Statements in accordance with the UK-adopted International Accounting Standards (UK-adopted IAS) and applicable law. Additionally, the Financial Conduct Authority's Disclosure Guidance and Transparency Rules require the directors to prepare the Financial Statements in accordance with UK-adopted IAS.

Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· state whether they have been prepared in accordance with UK-adopted IAS, subject to any material departures disclosed and explained in the Financial Statements;

· make judgements and accounting estimates that are reasonable and prudent; and

· prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006. They are responsible for such internal controls as they determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the annual report and financial statements taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Strategic Report, confirm that, to the best of their knowledge:

· the Company's Financial Statements, which have been prepared in accordance with applicable accounting standards give a true and fair view of the assets, liabilities, financial position and profit/loss of the Company; and

· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors' Report is approved:

· so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Simon Cordery

Chair

15 February 2024

Statement of Comprehensive Income

For the year ended 30 November 2023

	Notes	Year ended 30 November 2023			Year ended 30 November 2022
	Notes	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Investment income	3	19,143	-	19,143	17,473	-	17,473
Other operating income	4	916	-	916	146	-	146
Losses on investments held at fair value	5	-	(25,777)	(25,777)	-	(5,540)	(5,540)
Losses on derivatives		-	(442)	(442)	-	(103)	(103)
Other currency losses	6	-	(152)	(152)	-	(819)	(819)
Total income/(expense)		20,059	(26,371)	(6,312)	17,619	(6,462)	11,157
Expenses
Investment management fee	7	(704)	(2,815)	(3,519)	(727)	(2,907)	(3,634)
Performance Fee	7	-	-	-	-	1,164	1,164
Other administrative expenses	8	(774)	(20)	(794)	(870)	(19)	(889)
Total expenses		(1,478)	(2,835)	(4,313)	(1,597)	(1,762)	(3,359)
Profit/(loss) before finance costs and tax		18,581	(29,206)	(10,625)	16,022	(8,224)	7,798
Finance costs	9	(722)	(2,887)	(3,609)	(249)	(996)	(1,245)
Profit/(loss) before tax		17,859	(32,093)	(14,234)	15,773	(9,220)	6,553
Tax	10	(1,986)	695	(1,291)	(1,484)	381	(1,103)
Net profit/(loss) for the year and total comprehensive income/(expense)		15,873	(31,398)	(15,525)	14,289	(8,839)	5,450
Earnings/(losses) per ordinary share (pence)	11	4.97	(9.84)	(4.87)	4.45	(2.75)	1.70

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

The amounts dealt with in the Statement of Comprehensive Income are all derived from continuing activities.

The notes to follow form part of these financial statements.

Statement of Changes in Equity

For the year ended 30 November 2023

	Notes	Year ended 30 November 2023
	Notes	Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
Total equity at 1 December 2022		16,588	251	311,380	128,256	74,905	9,892	541,272
Total comprehensive (expense)/income:
(Loss)/profit for the year ended 30 November 2023		-	-	-	-	(31,398)	15,873	(15,525)
Transactions with owners, recorded directly to equity:
Issue costs relating to prior year share placings		-	-	(11)	-	-	-	(11)
Shares bought back and held in treasury	15	-	-	-	(23,139)	-	-	(23,139)
Equity dividends paid	12	-	-	-	-	-	(14,399)	(14,399)
Total equity at 30 November 2023		16,588	251	311,369	105,117	43,507	11,366	488,198

	Notes	Year ended 30 November 2022
	Notes	Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
Total equity at 1 December 2021		13,967	251	219,163	131,947	83,744	8,175	457,247
Total comprehensive (expense)/income:
(Loss)/profit for the year ended 30 November 2022		-	-	-	-	(8,839)	14,289	5,450
Transactions with owners, recorded directly to equity:
Issue of shares out of treasury	15	-	-	4,483	6,477	-	-	10,960
Issue of new ordinary shares (including costs)	15	1,282	-	43,765	-	-	-	45,047
Issue of new ordinary shares pursuant to placings (including costs)	15	1,339	-	43,969	-	-	-	45,308
Shares bought back and held in treasury	15	-	-	-	(9,175)	-	-	(9,175)
Equity dividends paid	12	-	-	-	(993)	-	(12,572)	(13,565)
Total equity at 30 November 2022		16,588	251	311,380	128,256	74,905	9,892	541,272

The notes to follow form part of these financial statements.

Balance Sheet

As at 30 November 2023

	Notes	30 November 2023 £'000	30 November 2022 £'000
Non-current assets
Investments held at fair value through profit or loss	13	518,124	572,748
Current assets
Cash and cash equivalents	14	37,262	29,793
Fair value of open derivative contracts	13	506	6
Receivables*		8,419	3,161
		46,187	32,960
Total assets		564.311	605,708
Current liabilities
Bank overdraft	14	(1)	-
Fair value of open derivative contracts	13	(316)	-
Payables		(6,502)	(3,778)
		(6,819)	(3,778)
Non-current liabilities
Bank loan		(69,031)	(60,507)
Indian capital gains tax provision		(263)	(151)
		(69,294)	(60,658)
Net assets		488,198	541,272
Equity attributable to equity shareholders
Called up share capital	15	16,588	16,588
Capital redemption reserve		251	251
Share premium reserve		311,369	311,380
Special distributable reserve		105,117	128,256
Capital reserves		43,507	74,905
Revenue reserve		11,366	9,892
Total equity		488,198	541,272
Net asset value per ordinary share (pence)	16	158.06	166.34

* In the prior years overseas tax recoverable was disclosed separately on the face of the balance sheet. The total receivable has been re-presented to include overseas tax recoverable. Full disclosure of the overseas tax recoverable is available in Note 14 within the Annual Report.

The notes to follow form part of these financial statements.

Cash Flow Statement

For the year ended 30 November 2023

	Notes	Year ended 30 November 2023 £'000	Year ended 30 November 2022 £'000
Cash flows from operating activities
(Loss)/profit before tax		(14,234)	6,553
Adjustment for non-cash items:
Losses on investments held at fair value through profit or loss		25,777	5,540
Losses on derivative investments*		442	103
Scrip dividends received		-	(11)
Amortisation on fixed interest securities		(186)	(3)
Adjusted profit before tax		11,799	12,182
Adjustments for:
Purchases of investments, including transaction costs		(284,542)	(508,484)
Sales of investments, including transaction costs		311,263	414,210
Purchases of derivative financial instruments*		(1,794)	(109)
Proceeds on disposal of derivative financial instruments*		1,168	-
Increase in receivables		(549)	(832)
Increase/(decrease) in payables		479	(510)
Indian capital gains tax		114	(18)
Greek sales tax		-	(6)
Overseas tax deducted at source		(1,596)	(2,071)
Net cash generated from/(used in) operating activities		36,342	(85,638)
Cash flows from financing activities
Net proceeds from issue of shares out of treasury		-	11,301
Net proceeds from issue of new ordinary shares		-	45,140
Net proceeds from share placings		-	45,308
Shares repurchased into treasury		(22,988)	(9,137)
Issue cost paid		(11)	(93)
Loan repaid	17	-	(1,647)
Loan drawn	17	9,891	10,094
Exchange (gains)/losses on the loan facility*		(1,367)	1,642
Equity dividends paid	12	(14,399)	(13,565)
Net cash (used in)/generated from financing activities		(28,874)	89,043
Net increase in cash and cash equivalents		7,468	3,405
Cash and cash equivalents at the beginning of the year		29,793	26,388
Cash and cash equivalents at the end of the year	15	37,261	29,793

* The prior year has been updated for presentational purposes only. There is no impact to the movement in the total cash flows and the year end cash position.

The notes to follow form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 November 2023

1 General Information

Polar Capital Global Financial Trust plc is a public limited company registered in England and Wales whose shares are traded on the London Stock Exchange.

The principal activity of the Company is that of an investment trust company within the meaning of Section 1158/1159 of the Corporation Tax Act 2010 and its investment approach is detailed in the Strategic Report.

The Board has determined that Sterling is the Company's functional currency and the presentational currency of the financial statements because it is the currency which is most relevant to the majority of the Company's shareholders and creditors and is the currency in which the majority of the Company's operating expenses are paid. All figures are rounded to the nearest thousand pounds (£'000) except as otherwise stated.

2 Accounting Policies

The principal accounting policies, which have been applied consistently for all years presented, are set out below:

(a) Basis of Preparation

The Group and Company's Financial Statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting standards ("UK-adopted IAS") and with the requirements of the Companies Act 2006.

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and derivative financial instruments at fair value through profit or loss.

Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Companies (AIC) in July 2022 is consistent with the requirements of UK-adopted IAS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The financial position of the Company as at 30 November 2023 is shown in the balance sheet above. As at 30 November 2023 the Company's total assets exceeded its total liabilities by a multiple of over 7.4. The assets of the Company consist mainly of securities that are held in accordance with the Company's Investment Policy, as set out in the Annual Report and these securities are readily realisable. The Directors have considered a detailed assessment of the Company's ability to meet its liabilities as they fall due. The assessment took account of the Company's current financial position, its cash flows and its liquidity position. In addition to the assessment the Company carried out stress testing, which used a variety of falling parameters to demonstrate the effects on the Company's share price and net asset value. In light of the results of these tests, the Company's cash balances, and the liquidity position, the Directors consider that the Company has adequate financial resources to enable it to continue in operational existence for at least 12 months. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Company's financial statements.

(b) Presentation of the Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in accordance with the guidance set out by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. The result presented in the revenue return column is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 1158 of the Corporation Tax Act 2010.

Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive Income on an ex-dividend basis.

Special dividends are recognised on an ex-dividend basis and may be considered to be either revenue or capital items. The facts and circumstances are considered on a case-by-case basis before a conclusion on appropriate allocation is reached.

Where the Company has received dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised in the revenue return column of the Statement of Comprehensive Income. Any excess in value of shares received over the amount of cash dividend foregone is recognised in the capital return column of the Statement of Comprehensive Income.

The fixed returns on debt securities and non-equity shares are recognised under the effective interest rate method.

Bank interest is accounted for on an accrual basis. Interest outstanding at the year end is calculated on a time apportionment basis using market rates of interest.

(d) Written Options

The Company may write exchange-traded options with a view to generating income. This involves writing short-dated covered call options and put options. The use of financial derivatives is governed by the Company's policies, as approved by the Board.

These options are recorded initially at fair value, based on the premium income received, and are then measured at subsequent reporting dates at fair value. Changes in the fair value of the options are recognised in the capital return for the year.

The option premiums are recognised evenly over the life of the option and shown in the revenue return, with an appropriate amount shown in the capital return to ensure the total return reflects the overall change in the fair value of the options.

Where an option is exercised, any balance of the premium is recognised immediately in the revenue return with a corresponding adjustment in the capital return based on the amount of the loss arising on exercise of the option.

(e) Expenses and Finance Costs

All expenses, including the management fee, are accounted for on an accrual basis.

Expenses are allocated wholly to the revenue column of the Statement of Comprehensive Income except as follows:

Expenses are charged to the capital column of the Statement of Comprehensive Income where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect the investment management fees have been charged to the Statement of Comprehensive Income in line with the Board's expected long-term split of returns, in the form of capital gains and income from the Company's portfolio. As a result, 20% of the investment management fees are charged to the revenue account and 80% charged to the capital account of the Statement of Comprehensive Income.

Finance costs are calculated using the effective interest rate method and are accounted for on an accruals basis and, in line with the management fee expense, are charged 20% to the revenue account and 80% to the capital account of the Statement of Comprehensive Income.

Any performance fee accrued is charged entirely to capital as the fee is based on the outperformance of the Benchmark and is expected to be attributable largely, if not wholly, to capital performance. A provision will be recognised when outperformance has been achieved in accordance with the calculations detailed in the Annual Report.

The research costs relate solely to specialist financial research and are accounted for on an accrual basis. They are allocated 20% to revenue and 80% to capital in line with the expected long-term split of revenue and capital return from the Company's investment portfolio.

(f) Taxation

The tax expense represents the sum of the overseas withholding tax deducted from investment income, tax currently payable and deferred tax.

The tax currently payable is based on the taxable profits for the year ended 30 November 2023. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Statement of Comprehensive Income is the "marginal basis". Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on UK capital gains.

The company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. The Indian capital gains tax provision represents an estimate of the amount of tax payable by the Company. Tax amounts payable may differ from this provision depending on when the Company disposes of its investments. The current provision for Indian capital gains tax is calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature of the investments and the applicable tax rate at the year end. Currently, the short-term tax rate is 15% and the long-term tax rate is 10%. The estimated tax charge is subject to regular review including a consideration of the likely period of ownership, tax rates and market valuation movements. The provision at the year end is recognised in the Balance Sheet and the year-on-year movement in the provision is recognised in the Statement of Comprehensive Income.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or when the asset is realised based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

(g) Investments Held at Fair Value Through Profit or Loss

When a purchase or sale is made under contract, the terms of which require delivery within the timeframe of the relevant market, the investments concerned are recognised or derecognised on the trade date and are initially measured at fair value.

On initial recognition the Company has designated all of its investments as held at fair value through profit or loss as defined by UK-adopted IAS. All investments are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.

Written and purchased options are valued at fair value using quoted bid prices.

Index futures are valued at the difference between exchange settlement prices and inception prices.

All investments, classified as fair value through profit or loss, are further categorised into the fair value hierarchy in the Annual Report.

Changes in fair value of all investments and derivatives held at fair value are recognised in the capital return column of the Statement of Comprehensive Income. Gains or losses on derivative financial instruments are treated as capital or revenue depending on the motive and circumstances of the transaction. Where positions are undertaken to protect or enhance capital, the returns are capital and where they are generating or protecting revenue, the returns are revenue.

In respect of unquoted investments, or where the market for a financial instrument is not active, fair value is established by using various valuation techniques, in accordance with the International Private Equity and Venture Capital ("IPEVC") Valuation Guidelines - Edition December 2022. These may include using reference to recent arm's length market transactions between knowledgeable, willing parties, if available, reference to recent rounds of re-financing undertaken by investee companies involving knowledgeable parties, reference to the current fair value of another instrument that is substantially the same or a relevant comparable.

(h) Receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost. Receivables do not carry any interest and are short-term in nature and are accordingly stated at their nominal value (amortised cost) as reduced by appropriate allowances for estimated irrecoverable amounts.

(i) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, maturity of three months or less, highly liquid investments that are readily convertible to known amounts of cash.

(j) Dividends Payable

Interim dividends payable to Shareholders are recognised in the financial statements in the period in which they are paid.

(k) Payables

Payables are not interest-bearing and are initially valued at fair value and subsequently stated at their nominal value (amortised cost).

(l) Bank Loans

Interest-bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and subsequently at amortised cost. The amounts falling due for repayment within one year are included under current liabilities and more than one year under non-current liabilities in the Balance Sheet.

(m) Foreign Currency Translation

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling on the date of each transaction. Monetary assets, monetary liabilities and equity investments in foreign currencies at the balance sheet date are translated into Sterling at the rates of exchange ruling on that date.

Realised profits or losses on exchange, together with differences arising on the translation of foreign currency assets or liabilities, are taken to the capital return column of the Statement of Comprehensive Income.

Foreign exchange gains and losses arising on investments held at fair value are included within changes in fair value.

(n) Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity, as a deduction, net of tax, from the proceeds.

(o) Capital Reserves

Capital reserve arising on investments sold includes:

- gains/losses on disposal of investments;

- exchange differences on currency balances; and

- other capital charges and credits charged to this account in accordance with the accounting policies above.

Capital reserve arising on investments held includes:

- increases and decreases in the valuation of investments held at the balance sheet date.

All of the above are accounted for in the Statement of Comprehensive Income.

When making a distribution to Shareholders, the Directors determine the profits available for distribution by reference to the 'Guidance on realised and distributable profits under the Companies Act 2006' issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability of distributable reserves in the Company is dependent on those dividends meeting the definition of qualifying consideration within the guidance and on the available cash resources of the Company and other accessible sources of funds. The distributable reserves are therefore subject to any future restrictions or limitations at the time such distribution is made.

(p) Repurchase of Ordinary Shares (including those held in treasury)

Where applicable, the costs of repurchasing Ordinary Shares including related stamp duty and transaction costs are taken directly to equity and reported through the Statement of Changes in Equity as a charge on the special distributable reserve. Share repurchase transactions are accounted for on a trade date basis.

The nominal value of ordinary share capital repurchased and cancelled is transferred out of called up share capital and into the capital redemption reserve.

Where shares are repurchased and held in treasury, the transfer to capital redemption reserve is made if and when such shares are subsequently cancelled.

Where the shares held in treasury are reissued, the amount of the sales proceed up to the repurchased cost of those shares is transferred back into special distributable reserve, the excess of the sales proceeds over the repurchased cost is transferred to share premium.

(q) Share Issue Costs

Where applicable, costs incurred directly in relation to the issue of new shares together with additional share listing costs have been deducted from the share premium reserve.

(r) Segmental Reporting

Under IFRS 8 Operating Segments, operating segments are considered to be the components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker has been identified as the Investment Manager (with oversight from the Board).

The Directors are of the opinion that the Company has only one operating segment and as such no distinct segmental reporting is required.

(s) Key Estimates and Judgements

The preparation of financial statements in conformity with UK-adopted IAS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Estimates and assumptions used in preparing the financial statements are reviewed on an ongoing basis and are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of these estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The key judgements and sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities and expenses in future periods are as follows:

Valuation of Level 3 Investments

Investments valued using valuation techniques include unlisted financial investments, which by their nature, do not have an externally quoted price based on regular trades.

The valuation techniques used may include the techniques described in note 2(g). When determining the inputs into the valuation techniques used, priority is given to publicly available prices from independent sources when available, but overall the source of pricing is chosen with the objective of arriving at a fair value measurement that reflects the price at which an orderly transaction would take place between market participants at the balance sheet date.

(t) New and revised accounting Standards

There were no new UK-adopted IAS or amendments to UK-adopted IAS applicable to the current year which had any significant impact on the Company's financial statements.

i) There were no relevant standards effective for the current annual reporting period that potentially impact the Company in issue.

ii) At the date of authorisation of the Company's financial statements, the following relevant standards that potentially impact the Company are in issue but are not yet effective and have not been applied in the financial statements:

Standards & Interpretations		Effective for periods commencing on or after
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)	Requirement amended to disclose material accounting policies instead of significant accounting policies and provided guidance in making materiality judgements to accounting policy disclosure.	1 January 2023
Definition of Accounting Estimates (amendments to IAS 8)	The amendment introduced the definition of accounting estimates and included other amendments to IAS 8 to help entities distinguish changes in accounting estimates from changes in accounting policy.	1 January 2023

The Directors expect that the adoption of the standards listed above will have either no impact or that any impact will not be material on the financial statements of the Company in future periods.

3 Investment Income

	Year ended 30 November 2023 £'000	Year ended 30 November 2022 £'000
Revenue:
UK dividends	2,391	2,660
Overseas dividends	13,313	13,812
Scrip dividends	-	11
Interest on debt securities	3,439	990
Total investment income	19,143	17,473

Included within income from investments is £623,000 (2022: £748,000) of special dividends classified as revenue in nature in accordance with note 2 (c). No special dividends have been recognised in capital (2022: nil).

4 Other Operating Income

Year ended

30 November 2023

£'000

Year ended

30 November 2022

£'000

Bank interest

916

146

Total other operating income

916

146

5 Losses on Investments Held at Fair Value

	Year ended 30 November 2023 £'000	Year ended 30 November 2022 £'000
Net losses on disposal of investments at historic cost	(1,274)	(11,901)
Less fair value adjustments in earlier years	(26,371)	(32,737)
Losses based on carrying value at previous balance sheet date	(27,645)	(44,638)
Valuation gains on investments held during the year	1,868	39,098
	(25,777)	(5,540)

6 Other Currency Losses

	Year ended 30 November 2023 £'000	Year ended 30 November 2022 £'000
Exchange (losses)/gains on currency balances	(1,519)	823
Exchange gains/(losses) on the loan facility	1,367	(1,642)
	(152)	(819)

7 Investment Management and Performance Fee

Year ended

30 November 2023

£'000

Year ended

30 November 2022

£'000

Management fee

- charged to revenue

704

727

- charged to capital

2,815

2,907

Investment management fee payable to Polar Capital LLP

3,519

3,634

Performance fee payable to Polar Capital (charged wholly to capital)*

(1,164)

* In 2022, the company underperformed and the prior year provisions have been written back resulting in a credit to the Statement of Comprehensive Income.

Management fees are allocated 20% to revenue and 80% to capital. Details of the investment management and performance fees are set out in the Strategic Report in the Annual Report.

8 Other Administrative Expenses (including VAT where appropriate)

	Year ended 30 November 2023 £'000	Year ended 30 November 2022 £'000
Directors' fees¹	145	144
Directors' NIC	15	13
Auditors' remuneration - for audit of the Financial Statements²	50	50
Depositary fee³	34	35
HSBC administration fee³	205	171
Registrar fee	39	31
Custody and other bank charges⁴	87	114
UKLA and LSE listing fees	49	36
Legal & professional fees⁵	(3)	36
AIC fees	21	19
Directors' and officers' liability insurance	19	16
Corporate broker's fee⁶	16	43
Marketing expenses⁷	72	88
Research costs - allocated to revenue⁸	5	5
Shareholder communications	17	24
Other expenses⁹	3	45
Total other administrative expenses allocated to revenue	774	870
Research costs - allocated to capital⁸	20	19
Total other administrative expenses	794	889

1 Full disclosure is given in the Directors' Remuneration Report within the Annual Report

2 The base audit fee for the statutory audit in the current year was £49,980. The base audit fee for the statutory audit in the prior year was £44,000. Overrun fee of £6,000 incurred in the completion of the 2021 audit due to the change in performance fee methodology.

3 Fees are determined on the pre-approved rate card with HSBC.

4 Fee is based on the value of the assets and geographical activity and determined on the pre-approved rate card with HSBC.

5 Includes VAT recovered which is greater than the total fees paid during the current year.

6 Corporate Broker fee is reduced by the commission received on the share buybacks during the year.

7 Includes bespoke marketing budget of £50,000 (2022: £50,000).

8 Research costs (which applied from 3 January 2018) payable by the Company relate solely to specialist financial research.

9 Includes non-executive Director search costs in the prior year only. .

Ongoing charges represents the total expenses of the Company, excluding finance costs and tax, expressed as a percentage of the average daily net asset value, in accordance with AIC guidance issued in May 2012.

The ongoing charges ratio excluding performance fee for the year ended 30 November 2023 was 0.86% (2022: 0.87%). The ongoing charges ratio including the performance fee was 0.86% (2022: 0.65%). See Alternative Performance Measures below.

9 Finance Costs

	Year ended 30 November 2023			Year ended 30 November 2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Interest on loans and overdrafts	699	2,795	3,494	201	804	1,005
Loan arrangement fees	23	92	115	48	192	240
	722	2,887	3,609	249	996	1,245

Finance costs are allocated 20% to revenue and 80% to capital.

10 Taxation

a) Analysis of tax charge/(credit) for the year:

	Year ended 30 November 2023			Year ended 30 November 2022
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000

Overseas tax	1,438	-	1,438	1,465	-	1,465
Tax relief in capital	693	(693)	-	19	(19)	-
Withholding tax recovered	(145)	-	(145)	-	-	-
Indian capital gains tax	-	(2)	(2)	-	(368)	(368)
Greek Sales tax	-	-	-	-	6	6
Total tax charge/(credit) for the year (see note 10b)	1,986	(695)	1,291	1,484	(381)	1,103

b) Factors affecting tax charge/(credit) for the year:

The charge/(credit) for the year can be reconciled to the profit/(loss) per the Statement of Comprehensive Income as follows:
	Year ended 30 November 2023			Year ended 30 November 2022
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Profit/(loss) before tax	17,859	(32,093)	(14,234)	15,773	(9,220)	6,553
Tax at the UK corporation effective tax rate of 23% (2022: 19%)	4,108	(7,381)	(3,273)	2,997	(1,751)	1,246
Tax effect of non-taxable dividends	(3,382)	-	(3,382)	(2,940)	-	(2,940)
Losses on investments that are not taxable	-	6,065	6,065	-	1,228	1,228
Overseas tax suffered	1,438	-	1,438	1,465	-	1,465
Indian capital gains tax	-	(2)	(2)	-	(368)	(368)
Greek sales tax	-	-	-	-	6	6
Unrelieved current period expenses and deficits	-	623	623	-	504	504
Withholding tax recovered	(145)	-	(145)	-	-	-
Tax relief on overseas tax suffered	(33)	-	(33)	(38)	-	(38)
Total tax charge/(credit)for the year (see note 10a)	1,986	(695)	1,291	1,484	(381)	1,103

c) Factors that may affect future tax charges:

The Company has an unrecognised deferred tax asset of £2,618,000 (2022: £1,968,000). The deferred tax asset is based on the current corporation tax rate of 25% (2022: 25%).

It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and deficits and therefore no deferred tax asset has been recognised.

Due to the Company's tax status as an investment trust and the intention to continue meeting the conditions required to obtain approval of such status in the foreseeable future, the Company has not provided UK tax on any capital gains arising on the revaluation or disposal of investments held by the Company.

The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. A tax provision on Indian capital gains is calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature of the investments and the applicable tax rate at the year end. The current rates of short-term tax rates are 15% and the long term tax rates are 10% respectively. At the year ended 30 November 2023, the Company has a deferred tax liability of £263,000 (2022: £151,000) on capital gains which may arise if Indian investments are sold.

11 Earnings/(Losses) Per Ordinary Share

	Year ended 30 November 2023			Year ended 30 November 2022
	Revenue return	Capital return	Total return	Revenue return	Capital return	Total return
The calculation of basic earnings/(losses) per share is based on the following data:
Net profit/(loss) for the year (£'000)	15,873	(31,398)	(15,525)	14,289	(8,839)	5,450
Weighted average number of ordinary shares in issue during the year
From continuing operations	319,065,538	319,065,538	319,065,538	320,762,691	320,762,691	320,762,691
Basic - ordinary shares (pence)	4.97	(9.84)	(4.87)	4.45	(2.75)	1.70

As at 30 November 2023 there were no potentially dilutive shares in issue (2022: nil).

12 Amounts Recognised as Distributions to Ordinary Shareholders in the Year

Dividends paid in the year ended 30 November 2023

Payment date	No. of shares	Amount per share	Year ended 30 November 2023 £'000
28 February 2023	324,779,000	2.05p	6,658
31 August 2023	315,955,329	2.45p	7,741
			14,399

The revenue available for distribution by way of dividend for the year is £15,873000 (2022: £14,289,000).

The total dividends payable in respect of the financial year ended 30 November 2023, which is the basis on which the requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:

Payment date	No. of shares	Amount per share	Year ended 30 November 2023 £'000
31 August 2023	315,955,329	2.45p	7,741
29 February 2024	307,160,405	2.10p	6,450
			14,191

The total dividends payable in respect of the financial year ended 30 November 2022, which is the basis on which the requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:

Payment date	No. of shares	Amount per share	Year ended 30 November 2022 £'000
31 August 2022	330,440,000	2.40p	7,930
28 February 2023	324,779,000	2.05p	6,658
			14,588

All dividends are paid as interim dividends, and all have been charged to revenue, where necessary utilising the revenue reserve and in exceptional circumstances utilising the special distributable reserve. £162,000 for the dividend paid on 31 August 2022 was partially paid from the special distributable reserve.

13 Investments Held at Fair Value Through Profit or Loss

a) Investments held at fair value through profit or loss

	30 November 2023 £'000	30 November 2022 £'000
Opening book cost	506,766	422,479
Opening investment holding gains	65,982	59,621
Opening fair value	572,748	482,100
Analysis of transactions made during the year
Purchases at cost	286,636	510,922
Sales proceeds received	(315,669)	(414,737)
Losses on investments held at fair value	(25,777)	(5,540)
Amortisation on fixed interest securities	186	3
Closing fair value	518,124	572,748

Closing book cost	476,645	506,766
Closing investment holding gains	41,479	65,982
Closing fair value	518,124	572,748

The Company received £315,669,000 (2022: £414,737,000) from disposal of investments in the year. The book cost of these investments when they were purchased were £316,943,000 (2022: £426,638,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

The following transaction costs, including stamp duty and broker commissions, were incurred during the year:

	30 November 2023 £'000	30 November 2022 £'000
On acquisitions	473	565
On disposals	246	327
	719	892

b) Changes in Derivative Financial Instruments

(i) Futures	30 November 2023 £'000	30 November 2022 £'000
Valuation at 1 December	6	-
Additions at cost	683	109
Proceeds of disposal	(386)	-
Losses on disposal	(297)	(109)
Valuation gains	(294)	6
Valuation at 30 November	(288)	6

The Company invested in currency and index futures during the year for the purposes of efficient portfolio management. As at 30 November 2023, the company held a long position of 80 CME Japanese Yen December 2023 contracts, a short position of 250 CME British Pound December 2023 contracts and a short position of 20 CME British Pound/Japanese Yen December 2023 contracts with a market value loss of £288,000. (2022: 15 ICF Long Gilt March 2023 with a market value gain of £6,000).

(ii) Options	30 November 2023 £'000	30 November 2022 £'000
Valuation at 1 December	-	-
Additions at cost	1,111	-
Proceeds of disposal	(782)	-
Losses on disposal	293	-
Valuation losses	(144)	-
Valuation at 30 November	478	-

The Company invested in purchased call and put options during the year for the purposes of efficient portfolio management. As at 30 November 2023, the company held SPDR S&P Regional Banking ETF call options and the market value of this open call option position was £478,000 (2022: £nil).

(c) Fair Value of Open Derivative Contracts	30 November 2023 £'000	30 November 2022 £'000
CME Japanese Yen December 2023 Futures	28	-
ICF Long Gilt March 2023 Futures	-	6
SPDR S&P Regional Banking ETF Call Options	478	-
	506	6
CME British Pound December 2023 Futures	(231)	-
CME British Pound/Japanese Yen December 2023 Futures	(85)	-
	(316)	-
Total	190	6

(d) Fair value hierarchy

The Company's financial instruments within the scope of IFRS 7 that are held at fair value comprise its investment portfolio and derivative financial instruments.

They are categorised into a hierarchy consisting of the following three levels:

Level 1 - valued using quoted prices in active markets for identical assets or liabilities.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted market prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to 'the fair value measurement of the relevant asset'.

Details of the valuation techniques used by the Company are given in note 2(g).

The following tables set out the fair value measurements using the IFRS 7 hierarchy at 30 November 2023 and 2022:

	30 November 2023
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equity Investments and derivative financial instruments	464,999	478	5,054	470,531
Interest bearing securities	47,783	-	-	47,783
Total	512,782	478	5,054	518,314
The Level 2 investment relates to the SPDR S&P Regional Banking ETF Call Options. The Level 3 investment relates to the shares in Atom Bank and Moneybox.
	30 November 2022
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equity Investments and derivative financial instruments	526,173	-	4,551	530,724
Interest bearing securities	42,030	-	-	42,030
Total	568,203	-	4,551	572,754

The Level 3 investment relates to the shares in Atom Bank and Moneybox.

There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in Level 3 is set out below.

Level 3 investments at fair value through profit or loss	30 November 2023 £'000	30 November 2022 £'000
Opening balance	4,551	1,921
Additions at cost	-	3,000
Total gains/(losses) included in the Statement of Comprehensive Income - on assets held at the year end	503	(370)
Closing balance	5,054	4,551

Level 3 Investments are recognised at fair value through profit or loss on a recurring basis.

Level 3 investments are valued in accordance with the accounting policy in Note 2(g) above.

A +/- 10% change in the price used to value the investment in the level 3 investments at the year end would result in a +/- £505,000 (2022: £455,000) impact on the gains or losses on investments held at fair value in the Statement of Comprehensive Income. .

e) Unquoted investments

The value of the unquoted investments as at 30 November 2023 was £5,054,000 (2022: £4,551,000) and the portfolio comprised the following holdings:

	30 November 2023 £'000	30 November 2022 £'000
Atom Bank	1,281	2,241
Moneybox	3,773	2,310
	5,054	4,551

Atom Bank is a UK digital bank founded in 2014 and based in Durham. It currently offers fixed rate and instant access savings products, business banking loans and retail mortgages.

At 31 March 2023 (Atom Bank's financial year end), Atom Bank announced that it had made pre-tax losses of £10,097,000 (2022: £11,927,000) and had net assets attributable to shareholders of £283,134,000 (2022: £251,094,000).

The valuation of Atom Bank was reviewed by the Investment Manager and the Board during both the half year and full year financial results process. In November 2023, the investment of Atom Bank was decreased to the price at which the bank raised £100m of capital. See Note 13(d) above further details.

Moneybox is an on-line UK savings and wealth platform and provides mobile applications which enable customers to make regular savings into tax efficient products, such as ISAs, or a personal pension, as well as various savings accounts.

At 31 May 2023 (Moneybox's financial year end), Moneybox announced that it had made pre-tax profit of £4,141,000 (2022: pre-tax loss of £10,198,000) and had net assets attributable to shareholders of £62,569,000 (2022: £31,917,000).

The valuation of Moneybox was reviewed by the Investment Manager and the Board during both the half year and full year financial results process. During the year, the valuation of Moneybox was increased based on the strong performance of the company. The valuation was calculated by calculating the average enterprise value to sales ratio of a peer group of listed companies and then applying a discount to reflect the smaller size and narrower focus of Moneybox. This was cross checked using a discounted cash flow analysis. An increase/decrease in the discount used of 5% would decrease/increase the fair value by £290,000 and an increase/decrease of the multiple of sales of the peer group used of 0.5x would increase/decrease the fair value by £295,000. See Note 13(d) above for further details.

14 Receivables

	30 November 2023 £'000	30 November 2022 £'000
Securities sold awaiting settlement	4,933	527
Dividends and interest receivable	1,930	1,395
VAT recoverable	36	25
Overseas tax recoverable*	1,487	1,184
Prepayments	33	30
	8,419	3,161

*The prior year figure, previously disclosed on the face of the balance sheet has been re-presented to be included as part of the total receivables figure.

15 Cash and Cash Equivalents

	30 November 2023 £'000	30 November 2022 £'000
Cash at bank	36,406	29,652
Cash held at derivative clearing houses	856	141
Cash and Cash Equivalents	37,262	29,793
Bank overdraft	(1)	-
	37,261	29,793

16 Called Up Share Capital

	30 November 2023 £'000	November 2022 £'000
Allotted, Called up and Fully paid:
Ordinary shares of 5p each:
Opening balance of 325,394,000* (2022: 272,980,000)	16,270	13,649
Issue of nil (2022: 25,644,680) new ordinary shares	-	1,282
Issue of nil (2022: 26,775,320) new ordinary shares pursuant to placings	-	1,339
Issue of nil (2022: 6,350,000) ordinary shares out of treasury	-	318
Repurchase of 16,532,313 (2022: 6,356,000) ordinary shares into treasury	(827)	(318)
Allotted, Called up and Fully paid: 308,861,687 (2022: 325,394,000) ordinary shares of 5p	15,443	16,270

22,888,313 (2022: 6,356,000) ordinary shares held in treasury	1,145	318
At 30 November 2023	16,588	16,588

*Excluding shares held in Treasury

During the year, there were 16,532,313 ordinary shares repurchased into treasury for a total consideration £23,139,000 (2022: £9,175,000). There were no (2022: 6,350,000) ordinary shares issued out of treasury (for a total net consideration of 2022: £10,960,000).

There were no new ordinary shares issues in the current year. In the prior year the Company issued 25,644,680 new ordinary shares from the blocklisting facility for a total consideration of £45,140,000 less expenses of £93,000. In addition, the Company also undertook a share placing programme, the first placing at the end of January 2022 and second placing at the end of February 2022 under the Prospectus issued on 12 May 2021. This resulted in a total allotment of 26,775,320 new ordinary shares for a total consideration of £46,022,000 less expenses of £714,000.

Subsequent to the year end to 13 February 2024, the Company has purchased a further 2,311,282 shares out of treasury for a total consideration of £3,595,473 into treasury.

The ordinary shares held in treasury have no voting rights and are not entitled to dividends.

16. Net Asset Value Per Ordinary Share

	30 November 2023	30 November 2022
Net assets attributable to ordinary shareholders (£'000)	488,198	541,272
Ordinary shares in issue at end of year (excluding shares held in treasury)	308,861,687	325,394,000
Net asset value per ordinary share (pence)	158.06	166.34

As at 30 November 2023, there were no potentially dilutive shares in issue (2022: nil).

17. Transactions with the Investment Manager and Related Party Transactions

a) Transactions with the manager

Under the terms of an agreement dated 11 June 2013 the Company has appointed Polar Capital LLP ("Polar Capital") to provide investment management, accounting, secretarial and administrative services. Details of the fee arrangement for these services are given in the Strategic Report. The total fees, paid under this agreement to Polar Capital in respect of the year ended 30 November 2023 were £3,519,000 (2022: £3,634,000) of which £278,000 (2022: £305,000) was outstanding at the year end.

A performance fee based on cumulative relative performance since 23 April 2020, amounting to £nil (2022: £nil) has been accrued at the year end. Any accrued performance fee is payable at the end of each five-year tender period, the next being in 2025. See Strategic Report within the Annual Report for more details.

In addition, the total research costs in respect of the period from 1 January 2023 to the year ended 30 November 2023 were £25,000 (2022: £24,000) of which £8,000 (2022: £11,000) was outstanding at the year end.

b) Related party transactions

The Company has no employees and therefore no key management personnel other than the Directors. The Company paid £145,000 (2022: £144,000) to the Directors of which £23,000 (2022: £47,000) was outstanding at the year end. The Remuneration Report is provided in the Annual Report. When dividends are paid by the Company these are received by the Directors who own shares at the same rates and terms as by all other Shareholders.

18. Post Balance Sheet Events

After the year end, a further 2,311,282 ordinary shares were bought back and held in treasury. Following these buy backs, the total number of ordinary shares in issue was 306,550,405 and the shares held in treasury was 25,199,595.

Alternative Performance Measures (APMs)

In assessing the performance of the Company, the Investment Manager and the Directors use the following APMs which are not defined in accounting standards or law but are considered to be known industry metrics:

NAV Total Return

The NAV total return shows how the net asset value per share has performed over a period of time taking into account both capital returns and dividends paid to shareholders. The NAV total return performance for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date.

		Year ended 30 November 2023	Year ended 30 November 2022
Opening NAV per share	a	166.3p	167.5p

Closing NAV per share	b	158.1p	166.3p
Dividend reinvestment factor	c	1.022930	1.026183
Adjusted closing NAV per share	d = b*c	161.7p	170.7p
NAV total return for the year	(d / a)-1	-2.8%	1.9%

NAV Total Return Since Inception

NAV total return since inception is calculated as the change in NAV from the initial NAV of 98p, assuming that dividends paid to Shareholders are reinvested on the ex-dividend date in ordinary shares at their net asset value.

		Year ended 30 November 2023	Year ended 30 November 2022
NAV per share at inception	a	98.0p	98.0p

Closing NAV per share	b	158.1p	166.3p
Dividend reinvestment factor	c	1.361991	1.331251
Adjusted closing NAV per share	d = b*c	215.3p	221.4p
NAV total return since inception	(d / a)-1	119.7%	125.9%

NAV Total Return Since Reconstruction

NAV total return since reconstruction is calculated as the change in NAV from the NAV of 102.8p, which was the closing NAV the day before the tender offer on 22 April 2020, assuming that dividends paid to Shareholders are reinvested on the ex-dividend date in ordinary shares at their net asset value.

		Year ended 30 November 2023	Year ended 30 November 2022
Rebased NAV per share at reconstruction	a	102.8p	102.8p

Closing NAV per share	b	158.1p	166.3p
Dividend reinvestment factor	c	1.097861	1.073252
Adjusted closing NAV per share	d = b*c	173.6p	178.5p
NAV total return since reconstruction	(d / a)-1	68.8%	73.6%

Share Price Total Return

Share price total return shows how the share price has performed over a period of time. It assumes that dividends paid to Shareholders are reinvested in the shares at the time the shares are quoted ex-dividend.

		Year ended 30 November 202	Year ended 30 November 2022
Opening share price	a	154.6p	172.0p

Closing share price	b	138.8p	154.6p
Dividend reinvestment factor	c	1.030408	1.028037
Adjusted closing share price	d = b*c	143.0p	158.9p
Share price total return for the year	(d / a)-1	-7.5%	-7.6%

Share Price Total Return Since Inception

Share price total return since inception is calculated as the change in share price from the launch price of 100p, assuming that dividends paid to Shareholders are reinvested on the ex-dividend date.

		Year ended 30 November 2023	Year ended 30 November 2022
Share price at inception	a	100.0p	100.0p

Closing share price	b	138.8p	154.6p
Dividend reinvestment factor	c	1.353458	1.311772
Adjusted closing share price	d = b*c	187.9p	202.8p
Share price total return since inception	(d / a)-1	87.9%	102.8%

Share Price Total Return Including Subscription Share Value

The share price total return including subscription share value performance since inception includes the value of the subscription shares issued free of payment at launch on the basis of one-for-five ordinary shares and assumes such were held throughout the period from launch to the conversion date of 31 July 2017. Performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date and uses the launch price of 100p per ordinary share.

		Year ended 30 November 2023	Year ended 30 November 2022
Share price at inception	a	100.0p	100.0p

Closing share price	b	138.8p	154.6p
Dividend reinvestment factor	c	1.381556	1.340750
Adjusted closing share price	d = b*c	191.8p	207.3p
Share price total return including subscription share value since inception	(d / a)-1	91.8%	107.3%

(Discount)/Premium

A description of the difference between the share price and the net asset value per share usually expressed as a percentage (%) of the net asset value per share. If the share price is higher than the NAV per share the result is a premium. If the share price is lower than the NAV per share, the shares are trading at a discount.

		30 November 2023	30 November 2022
Closing share price	a	138.8p	154.6p
Closing NAV per share	b	158.1p	166.3p
Discount per ordinary share	(a / b)-1	-12.2%	-7.0%

Ongoing Charges

Ongoing charges are calculated in accordance with AIC guidance by taking the Company's annual ongoing charges, excluding performance fees and exceptional items, if any, and expressing them as a percentage of the average daily net asset value of the Company over the year.

Ongoing charges include all regular operating expenses of the Company. Transaction costs, interest payments, tax and nonrecurring expenses are excluded from the calculation as are the costs incurred in relation to share issues and share buybacks.

Where a performance fee is paid or is payable, a second ongoing charge is provided, calculated on the same basis as the above but incorporating the movement in the performance fee provision.

		Year ended 30 November 2023	Year ended 30 November 2022
Investment Management Fee (Note 7 above)		£3,519,000	£3,634,000
Other Administrative Expenses (Note 8 above)		£794,000	£889,000
	a	£4,313,000	£4,523,000
Average daily net assets value	b	£502,339,000	£519,515,000
Ongoing Charges excluding performance fee	a / b	0.86%	0.87%

Performance fee (Note 7 above)	c	-	(£1,164,000)
	d = a+c	£4,313,000	£3,359,000
Ongoing charges including performance fee	d / b	0.86%	0.65%

Net Gearing

Gearing is calculated in line with AIC guidelines and represents net gearing. This is defined as total assets less cash and cash equivalents divided by net assets. The total assets are calculated by adding back the bank loan. Cash and cash equivalents are cash and purchases and sales for future settlement outstanding at the year end.

		30 November 2023	30 November 2022
Net assets	a	£488,198,000	£541,272,000
Bank loan	b	£69,031,000	£60,507,000
Total assets	c = (a+b)	£557,229,000	£601,779,000
Cash and cash equivalents (including amounts awaiting settlement)	d	£37,484,000	£27,855,000
Net gearing	(c-d)/a-1	6.5%	6.0%

AGM

The Annual Report and separate Notice of Annual General Meeting will be posted to Shareholders in February 2024 and will be available from the Company Secretary at the Company's Registered Office, (16 Palace Street London SW1E 5JD) and on the Company's website. The AGM will be held at the Company's Registered Office at 2:00pm on Thursday 18 April 2024.

Forward Looking Statements

Certain statements included above contain forward-looking information concerning the Company's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which the Company operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the principal risks and uncertainties included in the Strategic Report Section of the Annual Report and Financial Statements.

No part of these preliminary results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Polar Capital Global Financials Trust plc or any other entity and must not be relied upon in any way in connection with any investment decision. The Company undertakes no obligation to update any forward-looking statements. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

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