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The next legs for global financials

Kokkie Kooyman

The global financial sector has delivered strong performance this year, benefiting investors in the Denker Global Financial Fund and its rand-denominated feeder, the Denker SCI Global Financial Feeder Fund. This strength has been driven by a mix of factors: healthier balance sheets, regulatory tailwinds, ongoing tech-driven innovation, and solid underlying fundamentals. Together, these factors have pushed the sector ahead of many others. For investors, the focus now shifts to where the next opportunities in financials may come from and what we’re focusing on.



Before we get to the detail, you may want to see the performance of the two funds.  The table below shows the performance over various periods.

Figure 1: Annualised performance as at 31 August 2025

Source: Morningstar. Returns for periods shorter than one year are cumulative. Past performance is not necessarily a guide to future performance, and that the value of investments/units/unit trusts may go down as well as up. Denker Global Financial Fund: Returns are in USD terms and are net of the A class fees of 1.25%. Inception date: 5 October 2004.  The highest annual return in the last 10 years was 29.7% and the lowest was -17.2%.  Denker SCI Global Financial Feeder Fund: Returns are in ZAR terms and are net of the A1 class fees of 1.15%, incl. VAT. Inception date: 1 March 2011.  The highest annual return in the last 10 years was 37.7% and the lowest was -5.7%.

Markets have been strong, but risks remain.

Markets have been strong, but the landscape around short-term interest rates, rising long bond yields, tariffs and growth remains uncertain. Often when there’s a market pullback, investors reflexively sell financials – and even solid companies get caught up in the sell-off.

We anticipate this dynamic, so we’ve been preparing by rotating out of our winners into more defensive banks and insurers, and by increasing the fund’s cash levels slightly.

We’re currently repositioning for a changing landscape.

We’re rotating into good businesses that markets are overlooking, in line with our philosophy of investing in companies with good business economics, quality management and attractive valuations.

Over the next 12 months, we anticipate several of these currently overlooked companies will recover strongly – with share prices adjusting upwards to better reflect their true value.

We remain on the lookout for buying opportunities when there are corrections and markets dip. However, the fund is invested in good companies that should continue to grow shareholder value whether the market pulls back or keeps climbing.

We see three categories of under-the-radar opportunities in the global financials space:

  1. US regional banks

These are fundamentally sound banks, with clean balance sheets and resilient earnings (US Bancorp for example). Their valuations remain subdued, and once US interest rates ease, we expect a re-rating in the share price as the market recognises the value in these businesses.

  1. Property & Casualty (P&C) insurers

They were standout contributors in 2023 and the first half of 2024, benefiting from a cycle where insurers could charge higher premiums. Those cycles have peaked, and share prices have pulled back, but operationally they continue to do well – showing good growth in shareholder value. At their current valuations, they offer attractive re-entry points.

  1. Emerging market banks

These banks have been hurt by many factors recently, the most recent one being Trump’s tariffs.  India’s Shriram Finance is an example.  However, the fundamentals are solid, yet market sentiment hasn’t caught up. This creates another opportunity for long-term investors with conviction in the sector.

What do investors get when investing in the Denker Global Financial Fund (and the feeder fund)?

  1. Decades of experience

We’ve been investing in global financials for over 20 years, and over this time have built up a database of over 400 companies – which allows us to compare opportunities, back-test and stress-test, refine forecasts and challenge ideas quickly and accurately.

Many of the companies we invest in we’ve followed since the ’90s, with regular visits and detailed annual notes on strategy, execution, and management alignment. That kind of tracking builds conviction and enables discipline.

  1. Sector depth

Our research spans the entire financial sector: retail banks, investment banks, fintech disruptors, P&C insurers, exchanges like Euronext and Deutsche Börse, debt collectors, and niche players. And, at Denker Capital, we have years of experience in investing in small- and mid-cap companies – which provides investors with differentiated and valuable exposure.

  1. Geographic diversity

We hold businesses you may never have heard of – examples are Optima, Versa, Tompkins, NU Holdings, Shriram Finance – and giants like JP Morgan, HSBC, AIA, Chubb, Barclays. Each position meets our criteria: attractive valuation, competent management, and a favourable or improving operating environment.

Bottom line: The Denker Global Financial Fund still has ample legs.

Whether markets pause or keep rallying, we expect our high-conviction, value-driven exposure to compound shareholder returns. The fundamentals are there, and we’re positioned to benefit from both stability and upside.

For more insights, feel free to listen to our latest podcast or read the transcript.


For more information on the funds, please click on the links below or contact us.

Denker Global Financial Fund (USD)

Brochure

Minimum disclosure document (fact sheet)

For more information, please see the KIID which can be found here.

Denker SCI Global Financial Feeder Fund (ZAR)

Brochure

Minimum disclosure document (fact sheet)


Please read and understand the minimum disclosure documents (fact sheets) before investing.

Disclaimer

The information included above belongs to Denker Capital (Pty) Ltd and Sanlam Collective Investments (RF) (Pty) Ltd. The information should only be evaluated for its intended purpose and may not be reproduced, distributed or published without our written consent. Although all reasonable steps have been taken to ensure the information in this brochure is accurate, Denker Capital and Sanlam Collective Investments do not accept any responsibility for any claim, damages, loss or expense – however it arises, out of or in connection with the information. No member of Sanlam gives any representation, warranty or undertaking, nor accepts any responsibility or liability as to the accuracy of any of this information. The information does not constitute financial advice as contemplated in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (FAIS). Use or rely on this information at your own risk. Consult your financial advisor before making an investment decision. Sanlam Collective Investments (RF) (Pty) Ltd is a registered and approved Manager in Collective Investment Schemes in Securities.

The Denker Global Financial Fund are sub-funds of Sanlam Universal Funds Plc, a company incorporated with limited liability as an open-ended umbrella investment company with variable capital and segregated liability between sub-funds under the laws of Ireland and authorised by the Central Bank. The Manager of the fund is Sanlam Asset Management (Ireland) Limited (Beech House, Beech Hill Road, Dublin 4, Ireland, Tel + 353 1 205 3510, Fax + 353 1 205 3521) which is authorised by the Central Bank of Ireland, as a UCITS Management Company, and an Alternative Investment Fund Manager, and licensed as a Financial Service Provider in terms of Section 8 of the FAIS Act. Sanlam Collective Investments (RF) (Pty) Ltd is the South African Representative Office for these funds. Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website (notes 1, 3 and 4).

The Sanlam Universal Funds Plc full prospectus, the fund supplement, the minimum disclosure document (MDD) and the KIID are available free of charge from the Manager or at www.sanlam.ie. This is neither an offer to sell, nor a solicitation to buy any securities in any fund managed by us. Any offering is made only pursuant to the relevant offering document, together with the current financial statements of the relevant fund, and the relevant subscription/application forms, all of which must be read in their entirety together with the Sanlam Universal Funds Plc prospectus, the fund supplement the MDD and the KIID. No offer to purchase securities will be made or accepted prior to receipt by the offeree of these documents, and the completion of all appropriate documentation. A schedule of fees and charges and maximum commissions is available on request from the Manager.

The Manager of the Denker SCI Global Financial Feeder Fund is Sanlam Collective Investments, a registered and approved Manager in Collective Investment Schemes in Securities. Collective investment schemes are generally medium- to long-term investments. Past performance is not necessarily a guide to future performance, and that the value of investments/units/unit trusts may go down as well as up. Changes in the exchange rates may have an adverse effect on the value, price or income of a product. A schedule of fees and charges and maximum commissions is available from the manager on request. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Additional information on the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Performance is based on NAV-to-NAV calculations with income reinvestments done on the ex-div date. Performance is calculated for the portfolio and the individual investor performance may differ as a result of initial fees, actual investment date, date of reinvestment and dividend withholding tax. Lump sum investment performances are being quoted. The performance of the portfolio depends on the underlying assets and variable market factors.

Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. The manager has the right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate. Funds that hold assets in foreign countries could be exposed to the following risks regarding potential constraints on liquidity and the repatriation of funds: macroeconomic, political, foreign exchange, tax, settlement and potential limitations on the availability of market information. The A1 class is the most expensive class of the fund with an annual management fee of 1.25%. A feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges, and which could result in a higher fee structure for the feeder fund. The Denker SCI Global Financial Feeder Fund is an approved collective investment scheme in terms of Collective Investment Schemes Control Act, No 45 of 2002 (CISCA).

Sanlam Collective Investments retains full legal responsibility for the co-branded portfolios. The portfolio management of the fund is outsourced to Denker Capital (FSP no: 47075), an authorised financial services provider in terms of the FAIS Act. Standard Bank of South Africa is the appointed trustee of the Sanlam Collective Investments scheme.

Source of performance figures: Morningstar. Returns are annualised and net of fees unless otherwise stated. An annualised return is the weighted average compound growth rate over the performance period measured.

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About the author

  • Kokkie manages the award-winning Denker Global Financial Fund and its rand-denominated feeder fund. In 1989 he joined Old Mutual where he filled various investment management roles over 10 years, the last being Head of the Financial Services Sector. From 1999, Kokkie spent five years managing the local and global financial funds at Coronation Fund Managers. He established SIM (Sanlam Investment Management) Global in 2004, which merged with SIM Unconstrained Capital Partners to form Denker Capital.

    Kokkie has received the prestigious UK-based Investment Week’s Fund Manager of the Year award four times (2010-2013) in the financials category. The funds that Kokkie has managed over the years have received a range of industry awards. These include a Morningstar award for the Denker Global Financial Fund as well as Raging Bull awards for the Nedgroup Investments Financials Fund and the Denker SCI Global Equity Feeder Fund (the South African-registered feeder fund for the Denker Global Equity Fund).

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