Final Results

Franklin Global Trust plc (the "Company")

(previously known as Martin Currie Global Portfolio Trust plc)

Legal Entity Identifier: 549300RKB85NFVSTBM94

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ANNUAL FINANCIAL RESULTS - YEAR TO 31 JANUARY 2025

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 January 2025 or 2024 but is derived from those accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered following the Company's annual general meeting. 

The auditor has reported on those accounts; their report was unqualified.

The unedited full text of those parts of the annual report and accounts for the year ended 31 January 2025 which are required to be published are set out on the following pages.

The annual general meeting of the Company will be held on 19 June 2025. The notice of meeting will shortly be issued to shareholders and a copy can be downloaded on the Company's website (www.franklinglobaltrust.com).

A copy of the full annual report and accounts will be submitted to the National Storage Mechanism and will be available for inspection.

FINANCIAL HIGHLIGHTS

Key data

Performance

· +7.3% Net asset value total return for the year.

· +10.1% Share price total return for the year.

· 4.20p Annual dividend per share

Past performance is not a guide to future returns. All returns are total returns unless otherwise stated.

Source: Martin Currie Investment Management.

1The net asset value per share total return is calculated using the cum income net asset value with dividends reinvested on the ex-dividend date. This is an Alternative Performance Measure, see the annual report and accounts for more details.

2Total return is the combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid. See the annual report and accounts for more details on Alternative Performance Measures.

3 The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index to 31 January 2020. Prior to this, the benchmark was the FTSE All-Share to 31 May 2011.

4 Ongoing charges (as a percentage of shareholders' funds) are calculated using average net assets over the period. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology. This is an Alternative Performance Measure, see the annual report and accounts for more details.

5 For details of calculation, refer to note 5 in the annual report and accounts.

CHAIR'S STATEMENT

Dear Shareholder

The Company celebrated its twenty fifth year of existence in its present form during the financial year. On 26 September 2024, I was honoured to open the London Stock Exchange and make a short speech to mark the occasion. As can be seen on page 4 of the annual report, shareholders have enjoyed good returns over the quarter century. 

However, nothing stays the same forever and we now feel it is the right time to relaunch your Company as Franklin Global Trust plc; this marks a pivotal moment in the evolution of the Company. This change reflects a series of positive developments aimed at delivering enhanced shareholder returns which I outline below. Before turning to these matters, I would like to cover the Company's performance for the financial year.

Performance and returns

A positive share price total return of 10.1% has been achieved over the financial year to 31 January 2025 alongside a Net Asset Value ('NAV') total return of 7.3%. While positive, this lagged the benchmark return of 23.7%.

Although we are glad to see the increase in NAV the Board is clearly disappointed by the relative performance achieved during the year and Franklin Templeton are well aware of our feelings on the matter. We welcome the additional resources that are being made available to the investment team as outlined in Enhanced Investment Team below and trust that these will help the Company to achieve improved investment performance going forward. The Board is pleased with the reduction in fund management fees that have been negotiated with the manager as referred to in Management Fees below and we have also been seeking other cost reductions from external service providers. I was in contact with the largest shareholders around the end of the financial year and we welcome engagement with all owners of the Company. 

It has been a year when there has been considerable commentary about activist investors and investment trust discount levels. Against this backdrop it is particularly relevant that your Company continues to operate a zero discount policy which enables investors to buy and sell the shares at a level close to NAV in normal market conditions.

It is clearly the case that active managers have struggled to better the returns achieved by global indices in recent periods as the very largest US companies have performed so strongly. It is also true that investment trends such as these always come to an end although it is difficult to predict the precise events that will trigger such a change in leadership.

Enhanced Investment Team

Franklin Global Trust plc will continue to hold a concentrated portfolio of 25-40 growth stocks. However the inputs into the Company's investment process will be deepened. The existing team of nine will now be part of the Franklin Equity Group of sixty five investment professionals, including analysts and sector specialists, based in San Mateo, New York and London as well as Edinburgh. Zehrid Osmani and his present colleagues will join in the Franklin Equity Group's daily meetings, have greater access to senior company management at potential investee companies and benefit from a significantly larger research budget. The combined team will now be managing over £110 billion of assets in total.

Management Fees

In February 2025 we agreed with Franklin Templeton Investment Trust Management Limited that, with effect from 1 March 2025, the investment management fee would be reduced from 0.45% to 0.40% of NAV (excluding income)1 per annum. The new fee level will maintain a competitive ongoing charge and contribute to increasing shareholder value.

Income and Dividends

Net revenue earnings per share for the period amounted to 2.01 pence. The Company has paid three interim dividends of 0.9 pence per share and will pay a fourth interim dividend of 1.5 pence per share on 30 April 2025 to shareholders on the register on 4 April 2025. The total dividends with respect to the year to 31 January 2025 will be 4.2 pence per share, maintaining the same total dividend as the previous year.

Capital growth is the primary focus of our investment manager and the investment strategy is not constrained by any income target. Nevertheless, the Board recognises that dividends are important for many shareholders and hence continues to maintain the Company's dividend in line with previous levels. The Company's Articles of Association permit the distribution of realised capital gains and the Company has substantial distributable reserves. The Board has again used these alongside revenue earnings to maintain the dividend, while not impinging on the investment manager's approach to managing the portfolio.

Gearing

In the light of the outlook for markets and the fact we operate a zero discount policy we took the decision to remove our gearing. Therefore in November 2024 the Company's £10m debt facility was repaid in full and closed.

Board

We announced on 5 March 2025 that Krishna Shanmuganathan had been appointed as a Director with effect from 1 April 2025. Krishna is chair of both abrdn Asia Focus plc and Weiss Korea Opportunities Fund. He has had a varied and successful career in diplomacy, asset management, consulting and corporate advisory, with a particular focus on Asia.

Gary Le Sueur will retire from the Board at the conclusion of this year's Annual General Meeting ('AGM'), having served as a Director since December 2016. Gary is an experienced investor and I would like to thank him on behalf of the Board and shareholders for his invaluable insights into the management of your Company.

AGM

I am pleased to invite all shareholders to attend our AGM in person at the offices of Franklin Templeton, 5 Morrison Street, Edinburgh EH3 8BH on Thursday 19 June 2025 at 11.30am. We do recognise that some shareholders may be unable to come to the AGM and if you have any questions about the annual report, the investment portfolio or any other matter relevant to the Company, please write to me either via email at [email protected] or by post to The Company Secretary, Franklin Global Trust plc, 5 Morrison Street Edinburgh EH3 8BH. If you are unable to attend, I urge you to submit your proxy votes in good time for the meeting, following the instructions enclosed with the proxy form.

Stay in touch

Visit our new website at www.franklinglobaltrust.com where you can see the latest information, a variety of manager updates, stock story videos that showcase companies in our portfolio, webinars, events and much more. Our monthly emails deliver all of the updates to your inbox, so I recommend you subscribe today if you have not already done so.

The Board is always interested to hear shareholders' views. Please contact me if you have any questions or points regarding your Company by email at: [email protected].

Outlook

The period since the Company's year end has been volatile as markets seek to adapt to the ever changing picture on tariffs and their effect on global economies. It is difficult to predict the outcomes with any degree of certainty. However, the Board will continue to monitor the investment performance closely. As the Company evolves into Franklin Global Trust plc, we enter a new chapter. I thank all shareholders for their ongoing loyalty and believe that the actions taken will prove beneficial. We look forward to the next chapter with cautious optimism, trusting that the enhancements to our investment team will generate long-term value for our shareholders.

Christopher Metcalfe

Chair

17 April 2025

1For the purposes of calculating management fees, current period net income is excluded from the calculation of asset value.

MANAGER'S REVIEW

Overview of the year to 31 January 2025

The return that we produced for shareholders over the last financial year was disappointing. The NAV total return was +7.3%1, whilst the MSCI World index returned +23.7%. The market was unusually concentrated during the period, with the 'Magnificent 7'2 accounting for c. 35% of the performance of the index.

We do not follow any index in selecting the 25-40 stocks in our portfolio and invest for the long term in quality growth companies that have superior returns and growth profiles, and have leadership positions in the areas that they operate in. We do not respond to short-term events. Our performance was affected by a combination of (i) a sizeable underweight to the US equity market, which was the strongest performing large region, (ii) by an overweight to European equities, which were amongst the weakest regional markets, and (iii) by an under-exposure to the 'Magnificent 7'. Regionally, our robust and consistent valuation discipline has led us to find more opportunities in Europe in particular, given the valuation differential vs the US. China was a relatively weak market over the period, and our underweight to that region proved to be correct.

The emphatic win by Donald Trump in the US elections in November further extended a rally in US equities on the basis of investors' belief in US exceptionalism. This further weighed on relative performance, given our underweight in US equities. However, as set out under our discussion of the outlook below, the level of uncertainty in the market, and therefore the volatility, has spiked up considerably as a result of a broad range of tariff announcements on the USA's trading partners following the financial year end.

The 'Magnificent 7' were important contributors to the performance of the US and the Global markets last year, as the Artificial Intelligence ('AI') opportunity was seen as supporting these companies' earnings outlook. Whilst we had sizeable exposure to the strongest performing stock, Nvidia, which alone accounted for 10% of the index's performance, and Microsoft, others in that group performed strongly as well. During the year, as we evolved our analysis on many of these large capitalisation technology companies, we purchased positions in Apple and in Meta Platforms ('Meta'), which are discussed further below. We continue to see the semiconductor industry as well positioned to harness the AI investment cycle, given the growing need for more and faster microchips.

Key contributors to relative performance

Only four sectors outperformed the broader benchmark during the year, namely Telecoms (+41%), Financials (+34%), Consumer Discretionary (+32%) and Technology (+29%). The weakest sectors were Materials (+4%), Energy (+7%), Health Care (+7%) and Staples (+9%). Our sizeable overweight to Health Care weighed on our performance, as post-covid normalisation in trends continued to impact the growth of many of our holdings. Further, Novo Nordisk had specific issues (see below). The Consumer sector has also been an area of weakness for the portfolio, given our exposure to luxury goods companies (Kering and Moncler) and cosmetics companies (L'Oréal and Estée Lauder). We have had good exposure to the semiconductor industry, notably through Nvidia, although the sector was volatile during the year as a result of ongoing geopolitical uncertainty and the growing effects of restrictions imposed on China from the US Chips and Science Act which was introduced in 2022.

Nvidia was up very strongly over the period, with a series of snippets confirming that the semiconductor supply chain supporting high technology chips remained tight. Nvidia beat sales and earnings forecasts throughout the period and also raised future earnings projections. Early in the period, the annual Nvidia GTC conference - an AI conference for developers - showcased Nvidia's new product portfolio with the Grace-Blackwell Superchip. This reinforced investors' perception of its strong lead against competitors, with the gap widening in our view.

Adyen's strong performance was driven by a sustained rebound in topline growth, which has remained above 20% for five consecutive quarters following its unexpected slowdown to 18% in the first half of 2023. This recovery reinforces our conviction in Adyen's vast market opportunity, disciplined pricing strategy, and the unsustainable nature of a competitor-led price war. We continue to believe that Adyen's best-in-class, in-house developed technology is a unique advantage. In a highly competitive and fast-evolving landscape, Adyen's ability to innovate remains essential to maintaining its long-term leadership.

Constellation Software is a Canadian serial acquirer that operates thousands of portfolio companies, each providing mission-critical market software to a diverse customer base. The company's strong share performance was driven by its disciplined execution as an expert capital allocator, with maximizing long-term shareholder value at the core of its decision-making. Over time, we believe that the broader investment community will increasingly recognise Constellation's unique business model and exceptional corporate culture.

Key stock detractors from performance

Novo Nordisk - Novo Nordisk's recent share price decline stems from weight loss drug Cagrisema's trial results, which showed weight loss at the lower end of expectations but still ahead of prior-generation drugs. The company cited an issue with the design of the trial that may have limited the drug's full potential, prompting a follow-up which will take around 12 months to complete. While this raises questions around management's execution, Novo remains well-positioned in the growing obesity market, and its late 2026 launch timeline for Cagrisema remains unchanged. Readouts for other drugs came in at the high end of expectations, and while less significant than the Cagrisema data, do go some way to restoring confidence in Novo's market leadership in our opinion.

Estée Lauder was a detractor from performance in 2025 due to continued weakness in China and the broader prestige beauty market, particularly in Asia. The company faced ongoing demand challenges, and signalled near-term pressure on earnings. Additionally, the announcement of an internal successor as CEO was met with disappointment, as investors had hoped for fresh leadership to drive a stronger turnaround.

L'Oréal also faced weakening consumer demand in China and the rest of Asia. L'Oréal's management had anticipated an improvement by summer 2023 but this has yet to materialise. Increased competition from both premium and emerging local brands, along with foreign exchange headwinds and inflationary pressures, plus a higher tax charge also weighed on performance. While these near-term challenges have pressured the share price, L'Oréal's strong brand portfolio and long-term growth potential remain attractive.

Changes to the portfolio

We constantly stress-test our conviction in the companies held in the portfolio to ensure that they continue to remain innovative and stay away from threats in what will be an evermore disruptive environment for the foreseeable future. This is the reason why we moved some exposures around. In the consumer and industrial sectors we exited Nike, Estée Lauder, Pernod Ricard, and reduced the holdings in Kering and Croda, and purchased Deckers and Chipotle. In the technology sector we added companies to capture a broader range of exposures (Meta Platforms, Apple, Constellation Software and BE Semiconductors ('BESI')). In financials during the year we added Partners Group.

Purchases

We see favourable industry dynamics within private asset managers, with a strong growth profile from increasing wealth and high barriers to entry. Partners Group is a Swiss high-quality private asset manager with a management team with long experience and proven track record of generating good returns through the cycle. The company is well placed to benefit from the secular trend which we foresee in the private equity space, given its robust investment approach, consistent track record and a hard-to-replicate product offering that appeals to both large institutional investors and private wealth customers.

Novo Nordisk is a pure-play pharmaceutical company focused on diabetes, obesity and 'Bio-pharma', which has typically grown organically through research & development. Diabetes is a structural growth category which has a stable, low competition market structure because of (i) manufacturing scale, (ii) net price discounts and (iii) intellectual property protection. Obesity is expected to be the largest drug category of all time by 2030. Novo Nordisk is expected to deliver sales growth ahead of the peer group, with industry leading margins.

BESI, a leader in semiconductor packaging technology, is a beneficiary of the ongoing need for miniaturisation despite the physical challenges of doing so. Next generation semiconductor designs are gaining traction with Intel, TSMC and Samsung, who are all investing materially more into semiconductor packaging after decades of neglect. The apex of this opportunity centres on die-to-wafer hybrid bonding, where we believe that BESI has a multi-year head start over its competitors. We expect this product line to progress from zero to over 50% of the BESI business in the long term. We also believe it to be significantly accretive to earnings.

Apple is the world's leading brand for consumer technology products. Apple's integration of hardware and software expertise allows it to create world class consumer experiences and high barriers to entry. We expect the digital and real world only to become more integrated through time, with Apple's products as a key interface. We may not know the exact form but see upside opportunities in Virtual/Augmented Reality and AI. We believe that the company should enjoy increasing earnings as AI features are released.

Deckers is a US company where we have high conviction in the momentum of the underlying key brands in HOKA and the managed growth of UGG. The business is very profitable today, with the mix improving as HOKA grows. The combination of high margins and outsourced manufacturing fuels high returns.

Chipotle is a Mexican themed fast-casual restaurant chain that serves fresh, high-quality meals. It is primarily a US based business with a small international presence. Chipotle operates an ownership model as opposed to franchise. It is a top 10 player in the US, benefits from favourable demographics, strong brand perception as well as strong returns.

Meta is the owner of market leading social media assets in Facebook, Instagram, and WhatsApp. The company is the dominant force in social media in the US and beyond and is an early beneficiary from AI driving its share of advertising as well as augmenting the user experience on its platforms. We believe that the combination of these two factors underpins accelerated growth.

We have been looking for an entry point in Constellation Software for some time and took advantage of a pullback in the share price. We see the stock as a compounder and expect the company to remain extremely disciplined on the price paid for acquisitions.

Exits

We exited our position in Adobe due to uncertainty over Adobe's long term competitive advantage due the disruptive threat of generative AI.

Nike's poor 2024 results led to a significant downgrade of expectations. Our previous conviction in Nike shifting profitability higher while growing market share diminished and so we exited the stock.

For Pernod Ricard, our business model conviction has lowered and we switched to Chipotle.

Concerns around the global beauty market and exposure to China at Estée Lauder resulted in guidance being withdrawn and consensus estimates being cut.

We sold out of Assa Abloy following a spell of strong share price movement which led to us taking profits.

Our conviction in Croda reduced as a result of the ongoing weaker trading environment and a challenging backdrop for the company. We exited the holding after the financial year end.

Outlook for 2025 and beyond

There is plenty of uncertainty on all fronts as a result of the Trump administration's unpredictable policy initiatives both domestically and internationally. The Trump presidency and notably the introduction of trade tariffs by the US directly impacts the magnitude of all five key risks that we foresee for 2025. These are: 1) stickier inflation, 2) less dovish monetary policies, 3) tariffs and trade wars, 4) geopolitical uncertainty in the Middle East, Ukraine and China/Taiwan, and 5) government debt and fiscal policies

With the announcement by the Trump administration initially on 2 April 2025 of a more significant and broader range of tariffs than expected across a wide range of trading partners, and ensuing escalations with China, we believe that there is an increased risk of a sharp slowdown in economic momentum this year if the announced tariffs are not reversed. A lot of the predictions for the remainder of 2025 will need to be reviewed in light of these and any further policy initiatives by the new Trump administration. Whilst we do not expect a full recession, the sharp slowdown which we expect could feel recessionary in the US, Europe and China. We are already seeing a rapid deterioration in both business and consumer confidence in the US, which could weigh negatively on economic momentum. This could translate into weaker corporate earnings growth, and a series of downgrades to market estimates. This will likely maintain a high degree of uncertainty in equity markets, whilst at the same time keeping share price volatility high. Investors need to be cognizant that there will be a heightened focus on shorter term considerations, although this could also open up more opportunities for investors with a longer term perspective.

Tariffs, trade tensions, and geopolitical moves by the Trump administration could bring significant volatility in equity and bond markets during the year. It will therefore be important to continue to focus on long-term structural growth opportunities, whilst maintaining valuation discipline. This will not necessarily bring consistently strong performance in what will likely be a very volatile environment, reacting to headline news and policy announcements. However, we are confident that over the medium term the market will realise that the companies which we hold are well positioned to harness the structural opportunities that we have identified and deserve to be rerated.

Our three seismic thematic opportunities remain unchanged, namely: Energy transition, Ageing population and Artificial intelligence.

Energy transition remains an important driver of investment initiatives globally, both funded by governments and the private sector, with corporates being keen to reduce their carbon intensity. Whilst the Trump administration might de-emphasise this theme, we believe that corporates will continue to carry the initiative forward. It is critical for them, and for willing governments, to do so. Climate change has become a major risk for everyone, given the potential cost to corporates, governments and households. We therefore believe that (i) green and alternative energy, (ii) energy efficient infrastructure and (iii) electric transportation, will remain good sources of investment opportunities. We harness this view through companies such as construction materials company Kingspan, a leader in panel insulation, industrial company Atlas Copco, a provider of equipment to roll out energy infrastructure projects, and companies such as Hexagon and Autodesk in the industrial technology and automation segments. Linde in the industrial gases also has an interesting exposure to energy transition. In total, we calculate that Franklin Global Trust has c.14% of its portfolio exposed to this theme.

The trend of ageing population is now being experienced not only by developed markets, but also some developing markets. Notably the Chinese population has now peaked and is trending toward ageing. The risk is that the theme of the emerging Chinese middle-class becomes superseded by the ageing of the country's population. The need for healthcare infrastructure, in a world that is ageing at an accelerating rate, is therefore apparent.

We have in the portfolio several companies that harness that theme, for example Illumina in the genomics segment, CSL in the plasma collection segment, Mettler Toledo in the medical instruments area, and Coloplast, a leader in urology. Veeva Systems, a leader in hospital software, is also a company that is well positioned to harness the drive towards more efficient R&D management. Sartorius Stedim, as a leader in drug development and outsourcing, is well positioned to capture the ongoing spend by pharmaceutical companies on R&D. Obesity is likely to remain a prevalent trend in today's society. Whilst Novo Nordisk has suffered from a significant pullback, we believe that the market price of its shares fails to capture the superior growth and returns characteristics that the obesity market segment can achieve for well established leaders. ResMed, as a leader in devices that tackle sleep apnea, is also well placed to harness the co-morbidity related to obesity. Altogether, the portfolio's exposure to ageing population accounts for c.20% of the assets.

We expect that the theme of AI will remain omnipresent for the next decade and beyond, providing a fertile ground for investment opportunities. However, this area also highlights the need to have valuation discipline, as it is at risk of share price bubbles. At this stage, we note that the Hyperscalers are not only continuing to spend significantly, but are actually increasing their capex intentions further. Alphabet, Amazon, Meta, Microsoft and Apple are expected to spend a combined $2trn in 2025, and over the next 4 years the cumulative capex of the big technology companies is expected to reach $9.3trn.

This is a figure that can appear colossal, but that highlights the magnitude of the investment cycle triggered by the AI opportunity that we are observing. For the time being, Hyperscalers have been able to balance their drive to invest more whilst returning cash to shareholders, all of which has been funded by their strong cash flow generation. This makes us comfortable that, unlike the bubble of 2000, the technology companies that are investing heavily on this occasion have solid balance sheets, and are self-funded.

The emergence of DeepSeek at the start of 2025 brought some volatility to the share prices of some of the Hyperscalers, as the initial evidence of DeepSeek being significantly cheaper than the models developed by the Hyperscalers led to concerns of overspending. The markets, however, quickly moved to a point that recognised that technology has always grappled with disinflationary disruptive trends, as new technologies emerge at a fraction of the previous costs. We forecast AI to be on the cusp of triggering a major technologically driven Industrial Revolution, unleashing a major cycle of productivity enhancement for corporates, innovation breakthroughs, and major disruption to any existing businesses that fail to harness the AI opportunity. AI will potentially enhance productivity. Whether companies benefit from a boost in productivity through higher margins, or have to pass these gains to their customers will depend on the competitive dynamics of the industries in which they operate, the new entrant risks, the disruption risks, and the pricing power that they possess. All of these factors are important to assess when analysing any business model, which is what we do systematically when considering an investment opportunity or reviewing an existing holding.

Overall, we calculate that the portfolio has c.31% of its assets exposed to the AI theme, through companies such as Nvidia, Microsoft, BE Semiconductors, ASML, Atlas Copco, Cadence, Meta and Apple.

We are excited about the shape of the portfolio as it currently stands. Our concentrated approach, focusing on our strongest convictions that come out of our research process, leads to a collection of companies (i) which have solid balance sheets; (ii) which we are forecasting to grow their sales at a significantly higher rate than listed companies in general; and (iii) which have high returns on invested capital. These are characteristics that will help companies weather the upcoming storms around a potentially deteriorating economic cycle, as a result of the uncertainties brought by the new tariff announcements of 2 April 2025. Importantly, these are also companies that can continue to innovate, to stay ahead of their competitors, and to fend off disruption risks, in a decade ahead that will continue to be disruptive for many industries.

Turning to valuations, while it is true that our portfolio, in aggregate, trades at a higher PE ratio than the benchmark index, any measure capturing the superior growth and returns profile of our portfolio would conclude that it is attractively valued when adjusting for this profile.

Our portfolio offers our shareholders a collection of companies with higher growth than the index, in terms of sales, earnings and cash flow, and a substantially higher ROIC, with a forecast of a rapidly improving ROIC over time. This group of investments should therefore in our view compound attractively over the coming years, as the companies which we hold keep delivering what we forecast them to be able to deliver.

Finally, our team will move into the Franklin Equity Group in 2025. We will integrate with a larger group of investors managing over £110bn and sharing the same investment philosophy, focusing on quality growth opportunities. This will give us access to more analytical resources, notably we will be part of a team of 65 investment professionals, including a well-resourced central research group with over thirty analysts from whose knowledge, expertise and insights we will be able to benefit. The group is based in Silicon Valley, and the combined team also has offices in New York, London and Edinburgh, which will permit us to extend our network of corporates and leaders of industry within a region thriving on innovation. This move is intended to help us to continue to position the Company to focus on promising structural growth opportunities. I look at this prospect with excitement and the strong belief that we will be able to deliver the right outcome for our shareholders as we complete our integration into the broader Franklin Equity Group.

Zehrid Osmani

Portfolio Manager

17 April 2025

1All performance statistics total return: see Alternative Performance Measures

2The so-called 'Magnificent 7' stocks which are believed to be key beneficiaries of the growing adoption of AI are Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla.

3Graphics Processing Units

Portfolio summary

By sector

By asset class

Portfolio distribution by region

Portfolio holdings as at 31 January 2025

As at 31 January 2025 the largest 10 holdings accounted for 44.2% of the portfolio (51.0% as at 31 January 2024).

Largest 10 holdings in detail

Nvidia

Information Technology, United States

The company designs graphics processing units for gaming and professional markets. We see long-term upside optionality in several secular growth areas, including Gaming, Cloud, AI and Autonomous Vehicles. We believe the market is missing the longevity of growth at Nvidia - specifically from referencing and Edge AI.

Microsoft

Information Technology, United States

US software company Microsoft, best known for its Windows operating system, the Xbox gaming console and cloud computing service Azure, is in a prime position to benefit from a new 'golden era' of investment in technology. IT investment is becoming crucial for every aspect of corporate life, and Microsoft stands to capture a significant share of this growing expenditure. Furthermore, it can leverage the power of cross-selling within its extensive Enterprise customer base, allowing its Intelligence Cloud division to become the largest

contributor to the business over the long term, in our view.

Linde

Materials, United States

A resilient and geographically diverse business, it has high exposure to fast-growing emerging markets, combined with a solid base in the Americas. Linde exerts strong pricing power from its leading positions in the regions in which it operates. Although revenue growth is correlated to global industrial production, the structure of client contracts using 'take-or-pay' means that revenues are relatively cushioned during economic downturns. The merger with Praxair has accelerated a strategy of focusing on less economically sensitive customers in the healthcare and food and beverage sectors. Our thesis rests on its management's ability to continue to improve margins outside Americas and exert pricing power on its expanded customer base.

Ferrari

Consumer Discretionary, Italy

The Italian sports car manufacturer provides a unique play on the global growth of high-net-worth individuals and their passion for speed. It has enviable pricing power, thanks to the high demand for their products, limited production and its loyal customer base. Greater use of their Special Service and Icona ultra-high end platforms gives Ferrari the ability to raise their average selling price, which is already at a sizeable premium to other luxury car manufacturers. With good geographic diversification and higher exposure to the US and Europe, buoyant and resilient end-user market demand over the long term, and the ability to steadily increase its profit margins and

return profiles, we are confident in the long term growth trajectory of Ferrari.

Mastercard

Financials, United States

The migration from cash and cheque to electronic payment is a multi-year secular trend that is still far from mature. While this is a

seemingly consensual proposition, the market tends to underestimate this trend. The company's ROIC is highly attractive, even though the electronic payment space is competitive, its transition from a pure card network to a multi-rail provider of payment solutions proves how the company can face these challenges from a position of strength.

Meta Platforms

Communication Services, United States

The company is the dominant force in social media in the US and beyond. It is an early beneficiary from AI driving its share of advertising as well as augmenting the user experience on its platforms. We believe that the combination of these two factors underpins accelerated growth over our forecast period.

Moncler

Consumer Discretionary, Italy

Moncler is the leader in super premium down jackets and has a rich heritage and strategic focus on long-term sustainable and responsible growth. Moncler's CEO Remo Ruffini has been forensically focused on creating demand for scarce product and cementing this with great customer experiences, enabling the business to expand in a significantly underpenetrated market. We believe that the structural growth potential of the company is attractive, and its ability to continue to innovate remains strong.

Apple

Information Technology, United States

Apple is the global leading brand for technology products across the iPhone, iPad, Mac, and Apple Watch, which are priced a premium to peers due to the companies' brand value in product design and user experience. Apple's integration of hardware and software expertise create world class consumer experiences and high barriers to entry. In addition, its brand reputation and ecosystem of products allows cross sell with services such as Music, Apple Arcade, Apple TV and Apple Pay. We expect the digital and real world only to become more integrated through time, with Apple's products as a key interface.

ASML Holding

Information Technology, Netherlands

This semiconductor equipment company holds a monopoly position in leading edge lithography equipment for semiconductors with high barriers to entry. This dominant position affords the company strong pricing power. ASML is well placed to benefit from increasingly complex and smaller node chipsets. In addition, trailing edge demand, traditionally the sub growth segment, has accelerated from electrification in automotive and IoT/industrials which appear structural. As such we expect the ASML to outgrow the semiconductor industry.

Sartorius Stedim Biotech

Health Care, France

Sartorius benefits from the shift of increasingly complex drug development and drug production which is favouring life science and tools companies. We see structural growth in Bioprocessing and within that Single Use Technologies driving strong topline growth with high returns. In addition to those drivers we see Sartorius as continuing to drive market share gains in the US as it benefits from the new wave of biologic launches where it has been previously locked out. With high barriers to entry and significant switching costs Sartorius is a clear compounder, even though it can experience some degree of cyclicality due to industry capacity cycles.

Key Performance Indicators and Performance

The Board uses certain key performance indicators ('KPIs') to monitor and assess its performance in achieving the Company's objectives. The Board have made no changes to the KPI targets in the financial year to 31 January 2023.

1. Net asset value performance relative to benchmark

The Board assessed the net asset value total return compared to the benchmark. It is measured on a financial year basis and assessed over a rolling three year period. The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index.

The KPI was not achieved for the period. The return of the Company was 8.9% and the benchmark 37.6% for the three years to 31

January 2025.

2. Performance against the Company's peers

The Board monitors the share price total return performance versus all competitor funds within the AIC Global sector over a rolling three year period.

The share price total return for the Company was 10.9% over the three years to 31 January 2025 which ranked 9 out of 12 in the AIC Global sector.

3. Ongoing charges

The Board monitors ongoing charges on a regular basis to ensure that it meets its target by maintaining cost discipline and its focus on value adding activities. The KPI was met for the year at 0.65%. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology.

Principal and emerging risks and uncertainties

Risk and mitigation

The Company's business model is longstanding and resilient to most of the short-term operational uncertainties that it faces. The Board believes that these are effectively mitigated by the internal controls established by the Board and by the AIFM, Franklin Templeton Investment Trust Management Limited, and their combined oversight of the investment manager, as described in the table below. Its principal risks and uncertainties are therefore largely driven by the inherent uncertainties of investing in global equity markets. The Board's process seeks to mitigate known risks and to identify new risks as they emerge. 

However, it is recognised that the likelihood and timing of crystallisation of some risks, known and unknown, cannot be predicted and the Board then relies on professional management, effective systems and communication to mitigate and respond to them as and when they arise.

Operational and management risks are regularly monitored by the AIFM and by the Board at Board meetings. As part of its annual strategy meeting the Board carries out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

The Board's planned mitigation measures for the principal and emerging risks are described below.

The Board notes that the dominant global macroeconomic risks are geo-political tensions, trade, inflation, and climate transition. These are however considered to be risks that have an impact on the identified principal and emerging risks and are therefore considered and managed in that context and the investment manager takes full account of these risks in assembling and monitoring the portfolio of investments.

On the basis of its continual and ongoing assessment of the principal and emerging risks facing the Company, and given its current position, the Board is confident that the Company will be able to continue in operation and meet its liabilities as they fall due. The Board believes that the processes of internal control that the Company has adopted and oversight by the AIFM continue to be effective.

Going concern status

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's statement, Manager's review, Strategic report and the Report of the directors. The financial position of the Company as at 31 January 2025 is shown in the statement of financial position. The statement of cash flow of the Company is included in this announcement. Note 15 sets out the Company's risk management policies, including those covering market risk, liquidity risk and credit risk. In accordance with the 2019 AIC Code of Corporate Governance and the 2018 UK Corporate Governance Code, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors have analysed and reviewed the liquidity of the Company's portfolio under normal market conditions as at 31 January 2025. The Directors are mindful of the principal and emerging risks and uncertainties.

They have reviewed revenue forecasts for the next two financial years and believe that the Company has adequate financial resources to continue its operational existence for the period to 31 January 2027, which is at least 12 months from the date on which the financial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Viability statement

The Company's business model is designed to deliver long-term returns to its shareholders through investment in large and liquid stocks in global equity markets. Its plans are therefore based on having no fixed or limited life provided that global equity markets continue to operate normally. The Board has assessed the Company's viability over a three year period in accordance with provision 31 of the UK Corporate Governance Code as it believes that this is an appropriate period over which it does not expect there to be any significant change to the principal risks and adequacy of the mitigating controls in place. The Board considers that this reflects the minimum period which should be considered in the context of the Company's long-term objective but one which is limited by the inherent and increasing uncertainties involved in assessment over a longer period.

In making this assessment the Directors have considered the following factors:

• the principal and emerging risks and uncertainties and the mitigating actions, including specifically the current geopolitical and economic environment;

• the mitigation measures which key service providers including the AIFM have in place to maintain operational resilience;

• the challenges posed by climate change;

• the ongoing relevance of the Company's investment objective in the current environment;

• the level of income forecast to be generated by the Company and the liquidity of the Company's portfolio;

• the low level of fixed costs relative to the Company's liquid assets;

• the expectation that in normal markets more than 98% of the current portfolio could be liquidated within two trading days; and

• when relevant, the quantity of debt and the ability of the Company to make payments of interest and repayments of principal on its debt on their due dates.

Based on the results of their analysis and the Company's processes for monitoring each of the factors set out above, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over at least the next three years.

Responsibility statement

Each of the Directors confirms that to the best of their knowledge:

· the financial statements which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

· the Report of the directors, Strategic report and Manager's review include a fair, balanced and understandable review of the development and performance of the business and the position of the Company, together with a description of the principal risks and the uncertainties that it faces; and

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

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 United Kingdom Generally Accepted Accounting Practice (and applicable law).

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 these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

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

· state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements respectively; 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 also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The financial statements are published on the Company's website (www.franklinglobaltrust.com) which is maintained by the investment manager. The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This responsibility statement was approved by the Board of Directors on 17 April 2025 and is signed on its behalf by the Chair, Christopher Metcalfe.

STATEMENT OF COMPREHENSIVE INCOME

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice 2022.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the year.

The notes below form part of these financial statements.

There is no other comprehensive income and therefore the return attributable to shareholders is also the total comprehensive income for the period.

1The details of the investment management fee are provided in the Report of the directors in the annual report and accounts.

STATEMENT OF FINANCIAL POSITION

The notes below form part of these financial statements. 

Franklin Global Trust plc is registered in Scotland, company number SC192761.

The financial statements were approved by the Board of directors on 17 April 2025 and signed on its behalf by Christopher Metcalfe, Chair.

STATEMENT OF CHANGES IN EQUITY

The notes below form part of these financial statements. 

STATEMENT OF CASH FLOW

Analysis of debt

The notes below form part of these financial statements. 

NOTES TO THE FINANCIAL STATEMENTS

Note 1: Accounting policies

a) For the reporting period, the Company is applying FRS 102 Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), which forms part of the Generally Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting Council ('FRC').

The Company's assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal and emerging risks and uncertainties including those related to geopolitical risks and climate considerations.

They have reviewed revenue forecasts for the next two financial years and believe that the Company has adequate financial resources to continue its operational existence for the period to 31 January 2027, which is at least 12 months from the date the financial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

These financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, FRS102 issued by the FRC and the revised Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP') issued by the AIC in July 2022.

The Company is required to identify a functional currency, being the currency in which the Company predominately operates. The Board has determined that sterling is the Company's functional currency, which is also the currency in which these financial statements are prepared. This is also the currency in which all expenses and dividends are paid.

The Directors have considered the impact of climate change on the value of the listed investments that the Company holds. In the view of the Directors, as the portfolio consists of listed equities, their market prices should reflect the impact, if any, of climate change and accordingly no adjustment has been made to take account of climate change in the valuation of the portfolio in these financial statements.

b) Income from investments (other than capital dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted, when the Company's right to receive payment is established. UK investment income is stated net of the relevant tax credit. Overseas dividends include any taxes deducted at source. Special dividends are credited to capital or revenue, according to the circumstances.

c) Interest receivable and payable, investment management fees and other expenses are measured on an accruals basis.

d) The investment management fee and finance costs in relation to debt are recognised four-fifths as a capital item and one-fifth as a revenue item in the statement of comprehensive income in accordance with the Board's expected long-term split of returns in the form of capital gains and revenue, respectively. Finance costs relate to interest and fees on bank loans and overdrafts. All other expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case they are treated as described in (f) below. Full details of the investment management fee are included in the Report of the directors in the annual report and accounts.

e) Investments - investments have been classified upon initial recognition at fair value through profit or loss. Investments are recognised and derecognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at fair value. After initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value are included in net profit or loss for the year as a capital item in the statement of comprehensive income and are ultimately recognised in the capital reserve.

f) Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the statement of comprehensive income.

g) Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange ruling at the date of the statement of financial position.

Non-monetary items expressed in foreign currencies held at fair value are translated into sterling at rates of exchange ruling at the date the fair value is measured. Transactions in foreign currency are converted to sterling at the rate ruling at the date of the transaction. Exchange gains and losses are taken to the income statement as a capital or revenue item depending on the nature of the underlying item.

h) Cash and cash equivalents comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

i) Dividends payable - under FRS102 dividends should not be accrued in the financial statements unless they have been approved by shareholders before the statement of financial position date. Dividends to equity shareholders are recognised in the statement of changes in equity when the shareholder's right to receive the payment is established. In the case of the fourth interim dividend, this would be the ex-dividend date of 3 April 2025.

j) Called up ordinary share capital - represents the nominal value of the issued share capital including shares held in Treasury. This reserve is non-distributable.

The share premium account - when shares held in Treasury are reissued, the excess of the sales proceeds over the weighted average price of repurchase is allocated to the share premium account. This reserve is non-distributable.

The capital redemption reserve - represents the nominal value of the shares bought back and cancelled. This reserve is non-distributable.

The capital reserve - gains or losses on realisation of investments and changes in fair values of investments are transferred to the realised capital reserve. Any changes in fair values of investments that are not readily convertible to cash are treated as unrealised gains or losses within the capital reserve. The capital element of the investment management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve. The realised portion of the capital reserve is distributable by way of dividend and by way of share buybacks.

The revenue reserve - represents net revenue earned that has not been distributed to shareholders. This reserve is fully

distributable.

k) Taxation - the charge for taxation is based upon the revenue for the year and is allocated according to the marginal basis between revenue and capital using the Company's effective rate of corporation tax for the accounting period.

l) Deferred taxation - deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the statement of financial position date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets being recognised only if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying temporary differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval as an investment trust in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

m) Estimates - estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There have been no significant judgements, estimates or assumptions for the year.

n) Bank loans are classified as financial liabilities at amortised cost. Interest and fees payable on the bank loan are accounted for on an accrual basis in the statement of comprehensive income.

There were no capital dividends received during the year ended 31 January 2025 (2024: £nil).

Note 3: Other expenses

All expenses detailed above include VAT where applicable.

Note 4: Taxation on ordinary activities

The applicable corporation tax rate for the year ended 31 January 2025 was 25.00% (2024: 24.03%). The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK. The differences are explained below.

As at 31 January 2025, the Company had unutilised management expenses of £49 million (2024: £46 million) carried forward. Due to the Company's status as an investment trust and the intention to continue to meet the conditions required to obtain approval for that status in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments.

Note 5: Returns per share

Note 6: Dividends

Revenue return per share for the year ended 31 January 2025 is 2.01p (2024: 2.37p), refer to note 5 for details of calculation.

The fourth interim dividend for the years ended 31 January 2024 and 31 January 2023 have been allocated to the realised capital reserve. The first, second and third interim dividends for the years ended 31 January 2025 and 31 January 2024 have been allocated to the revenue reserve.

Set out below are the total dividends paid/payable in respect of the financial year which forms the basis on which the requirements of s1158-1159 of the Corporation Taxes Act 2010 are considered.

Note 7: Investments at fair value through profit or loss

The Company received £145,418,000 (2024: £118,874,000) from investments sold in the year. The book cost of these investments when they were purchased was £109,333,000 (2024: £97,590,000).

The transaction costs in acquiring investments during the year were £75,000 (2024: £105,000). For disposals, transaction costs were £45,000 (2024: £62,000).

Note 8: Trade receivables

Note 9: Cash and cash equivalents

Note 10: Trade payables

1On 23 November 2020, the Company entered into an unsecured three-year £10 million sterling term revolving loan facility with the Royal Bank of Scotland International Limited ('RBSI'). This loan was drawn down in full on 23 November 2023. It was fully repaid and closed on 25 November 2024.

The facility agreement contained covenants that the adjusted investment portfolio value at each month end should not be less than £120 million, the gross borrowings should not exceed 30% of the Company's adjusted investment portfolio value and the portfolio must contain at least 22 eligible investments. The facility was shown at amortised cost.

Finance costs are charged to capital (80%) and revenue (20%) in accordance with the Company's accounting policies.

Note 11: Ordinary shares of 5p

For the financial year to 31 January 2025, the payments made for shares bought back to Treasury was £39,184,000 (2024: the payments made for shares bought back to Treasury less proceeds received for shares issued from Treasury was £15,966,000).

Between 1 February 2025 and 15 April 2025, 2,060,649 Ordinary shares of 5p were bought back to Treasury and no Ordinary shares of 5p were issued from Treasury.

Note 12: Capital reserves

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts 2022'.

Note 14: Related party transactions

With the exception of the investment management fees (as set out in the annual report and accounts), Directors' fees (disclosed in the annual report and accounts) and Directors' shareholdings (as set out in the annual report and accounts), there have been no related party transactions during the year, or in the prior year.

The amounts payable for Directors' fees as at 31 January 2025 are £40,037 (2024: £37,864).

Note 15: Financial instruments

The Company's financial instruments comprise securities and other investments, cash balances, receivables and payables that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and receivables for accrued income.

The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts, futures and options, for the purpose of managing currency and market risks arising from the Company's activities.

The main risks the Company faces from its financial instruments are (a) market price risk (comprising (i) interest rate risk, (ii) currency risk and (iii) other price risk), (b) liquidity risk and (c) credit risk.

The Board regularly reviews and agrees policies for managing each of these risks. The AIFM's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term receivables and payables, other than for currency disclosures.

(a) Market price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.

(i) Market risk arising from interest rate risk

Interest rate movements may affect the level of income receivable on cash deposits.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions. The Board imposes borrowing limits to ensure gearing levels are appropriate and reviews these on a regular basis. Borrowings may comprise fixed rate, revolving, and uncommitted facilities. Current guidelines state that the total borrowings will not exceed 20% of the net assets of the Company at the time of drawdown. On 23 November 2023, the Company entered into an unsecured three-year £10 million sterling term revolving loan facility and was drawn down in full. On 25 November 2024, the facility was closed and repaid in full. The loan was shown at amortised cost in the prior year.

Interest risk profile

The interest rate risk profile of the Company at the reporting date was as follows:

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the statement of financial position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.

If interest rates had been 1% (2024: 1%) higher or lower and all other variables were held constant, the Company's profit for the year ended 31 January 2025 would increase/decrease by £19,000 (2024: increase/decrease by £81,000).

This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances and revolving credit facility.

(ii) Market risk arising from foreign currency risk

A significant proportion of the Company's investment portfolio is invested in overseas securities and the statement of financial position can be significantly affected by movements in foreign exchange rates. It is not currently the Company's policy to hedge this risk.

The revenue account is subject to currency fluctuation arising on overseas income.

Foreign currency risk profile

Foreign currency risk exposure by currency of denomination:

The asset allocation between specific markets can vary from time to time based on the portfolio manager's opinion of the attractiveness of individual stocks.

Foreign currency sensitivity

At 31 January 2025, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The level of change is considered to be a reasonable illustration based on the volatility of exchange rates during the year.

(iii) Market risk arising from other price risk

Other price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets as detailed above, and the stock selection process both act to reduce market risk. The investment manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. All investments held by the Company are listed on various stock exchanges worldwide.

Other price risk sensitivity

If market prices at the statement of financial position date had been 30% (2024: 30%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders at the year ended 31 January 2025 would have increased/decreased by £69,100,000 (2024: increase/decrease of £79,400,000) and capital reserves would have increased/decreased by the same amount. This level of change is considered to be reasonably possible based on observation of market conditions and historic trends.

(b) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary.

(c) Credit risk

This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

The risk is managed as follows:

· investment transactions are carried out with a large number of brokers, whose credit ratings are reviewed periodically by the portfolio manager, and limits are set on the amount that may be due from any one broker; and

· cash is held only with reputable banks with high-quality external credit ratings.

The maximum credit risk exposure as at 31 January 2025 was £4,260,000 (2024: £2,951,000). This was due to trade receivables and cash as per notes 8 and 9.

Fair values of financial assets and financial liabilities

All financial assets and liabilities of the Company are included in the statement of financial position at fair value or a reasonable approximation of fair value with no material difference in the carrying amount.

Note 16: Capital management policies and procedures

The Company's capital management objectives are:

• to ensure that the Company will be able to continue as a going concern;

• to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt; and

• to limit gearing to 20% of net assets at time of drawdown.

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the portfolio manager's views on the market and the extent to which revenue in excess of that which is required to be distributed under the investment trust rules should be retained.

The capital of the Company consists of the equity reserves as shown on the equity section of the statement of financial position and the bank loan as disclosed in the liabilities section. On 25 November 2024, the facility was closed and repaid.

Under FRS 102, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc);

• Level 3: significant unobservable input (including the Company's own assumptions in determining the fair value of investments).

The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

Note 18: Post balance sheet events

On 27 March 2025, the Board declared a fourth interim dividend of 1.50p per share.

Effective 1 March 2025, the investment management fee will be amended to 0.40% of the Company's NAV (excluding income).

Following the year end, global equity market volatility has been very high after the introduction of widespread tariffs by the United States. Between 31 January 2025 and 15 April 2025, the net asset value of the Company fell 19.4% from £232,226,000 to £187,160,000. The cum-income NAV per share fell 16.6% from 382.7p to 319.3p.

Between 1 February and 15 April 2025, the Company bought back into Treasury 2,060,649 ordinary shares at an average price of 348.0p per share.

On 15 April 2025, the Company changed its name from Martin Currie Global Portfolio Trust plc to Franklin Global Trust plc.