We offer a range of global and enhanced fixed interest, managed and enhanced cash, and credit capabilities.
Pendal’s income and cash portfolios use disciplined investment processes that capture benefits for clients. Our strong risk management systems ensure security and stability.
Our portfolios employ a particular investment style, using a quantitative foundation with a qualitative overlay.
A key part of the process is how we combine economic and market model data with our economic, market and credit issuer views. This allows us to construct portfolios that aim to generate outperformance while remaining well balanced and risk controlled.
There are three key ways our “truly active” approach differs from a conventional active fixed interest manager:
- Our duration trading strategies tend to be shorter in time frame with profits realised more regularly and losses stopped according to strict stop loss criteria.
- Beta (market risk) is separated from alpha (additional return driven by skill). The aim is to produce that base return and then add alpha relative to that benchmark.
- The investment process utilises a broader opportunity set than traditional Australian fixed interest managers to drive alpha. This gives a much more diverse toolkit with which to drive return when compared to most other managers – a toolkit that has been developed over many years’ experience.
An important part of the approach is striving to ensure that each of the strategies implemented are uncorrelated so that the portfolio’s active performance will not be determined by a single, or few, outcomes or themes in the market place. This should deliver a more consistent active return profile over time.
Our products include:
- Pendal Sustainable Australian Fixed Interest Fund
- Regnan Credit Impact Trust
- Pendal Fixed Interest Fund
- Pendal Dynamic Income Fund
- Pendal Monthly Income Plus Fund
- Pendal Short Term Income Securities Fund
- Pendal Managed Cash Fund
We include material ESG factors into our analysis and investment decisions across our Income and Fixed Interest funds. We view ESG integration as a way of understanding other risks and opportunities outside of traditional credit research. ESG risks can highlight potential future credit concerns.
We use ESG integration in our vanilla funds to better understand risks and opportunities, probability of credit downgrades as well as any variations on liquidity and pricing particularly in the secondary market. ESG integration and engagement allows us to use our responsibility as active investors to influence the market by promoting sustainable issuers and nudging towards improved transparency.
Our ESG integration process includes:
- ESG Research – understanding ESG risks across different issuers
- Engagement – using our influence to nudge issuers towards sustainable practices
- Pricing material ESG risks – ensure we are compensated for ESG risks
- Monitor and review – monitor changes to issuers and broader risks
ESG Integration for Income and Fixed Income
We collaborate widely and leverage other areas of Pendal and Regnan, our in-house ESG research team. Our ESG integration process is iterative: monitoring progress and controversies feeds into our ESG research and directs our engagements.
Download ESG Integration for Income and Fixed Income – (PDF 219kb)
Pendal leads engagement with investee company management on ESG issues. Active engagement can enhance the quality of information available to the market more generally, as well as facilitate improved oversight and management of these matters across a range of market participants.
The Bonds, Income and Defensive Strategies team is committed to supporting Pendal’s responsible investment practices, including through sustainable and ethical products.
The team goes beyond engagement to support ESG risk management and engages for sustainability and impact outcomes.
We do this, for example, by encouraging issuers to enhance their ambition concerning ESG-related goals, address negative social or environmental impacts, as well as strengthen or formalise commitments to delivering on impact outcomes.