Investors can view their accounts online via a secure web portal. After registering, you can access your account balances, periodical statements, tax statements, transaction histories and distribution statements / details.
Advisers will also have access to view their clients’ accounts online via the secure web portal.
Quick, actionable insights for investors
Consumer and business sentiment are heading in different directions according to the latest data.
What’s going on?
Early last year consumer confidence boomed as we escaped from lockdowns with money in our pockets, says Pendal’s Tim Hext.
“Sentiment hit an all-time high in April 2021. Weighed down by rising prices and rate hikes we’ve since plunged almost to the March 2020 low.
“For business, however, it’s hardly looked better. An NAB survey sees business conditions at 20, not far off the April 2021 high of 30 (it averages around 5).”
So far rate hikes have been manageable for consumers, but the next 1% this year will start to bite — heavily for some, says Tim.
Meanwhile tight supply of goods and services means businesses are able to pass on higher costs, maintaining margins and seeing conditions as strong.
“Of course, consumers and business can only be out of step for so long — and 2023 will see a reckoning.”
Did the RBA this week signal fewer rate hikes ahead? Probably not, says Pendal’s head of government bond strategies Tim Hext.
“We know we’re going to hit neutral this year. Another 1% can be expected, moving the cash rate to 2.85%.
“Whether it’s four lots of 25bp or 50bp at fewer meetings is only of interest to short-end traders. Hence the RBA’s line that it is ‘not on a pre-set path’.
“Sounds like an opportunity for everyone to interpret this with their own confirmation bias — which on Tuesday seemed to be fewer hikes, not more.
“I think that’s reading too much into it.
“As asset owners we must remember the ‘central bank put’ is now also a ‘central bank call’.
“If bonds, equities and credit spreads rally too much without a significant easing in inflation pressures, the RBA will lean against the easing of conditions.
“The rally of the past month suggests this is in danger of happening — so expect more hawkish speeches from officials, especially in the US.”
The Reserve Bank considers a neutral rate around 2.5% and a bit. But how much is the bit?
“The concept of a neutral cash rate is very fluid,” says Pendal’s head of government bond strategies Tim Hext.
“The best notion is a rate that reflects long-term inflation expectations plus any adjustment for productivity.
“That is, you should expect your cash returns through the long-term cycle to keep pace with inflation and (assuming positive productivity) deliver some small extra return.
“This leads to the notion of 2.5% (the RBA target) plus a bit.”
The size of that “bit” depends on productivity. Strong business lending and new, Covid-driven efficiences are positive signs for productivity.
Against this are the challenges of reduced globalisation and sustainable energy.
After the evolution of Coalition fiscal spending habits during Covid, our new Labor government won’t be a big change on the economic front, says Pendal’s Anna Hong.
“Australians will be largely unaffected, at least near term,” says Anna.
Labor will increase fiscal spending by net $7.4 billion in areas such as home equity schemes and electric car discounts.
“That will prop up demand without fixing supply issues, nudging inflation higher and making the RBA work harder to counter loose fiscal policy.” The budget will remain in deficit for the rest of the decade.
Labor may face difficulty generating planned revenue and savings. “Many items on their list such as multinational tax revenue are easy to promise but notoriously difficult to achieve. “Overall, it’s more of the same for the economy and budget. The difference will be in other changes many voters are focused on – climate policy, federal integrity and gender equity.“
This is a critical juncture in terms of which way markets break, says our head of equities Crispin Murray.
“Signs of stress are building in markets but we are also seeing weak sentiment and some pockets that look to be oversold.”
Crispin points to three areas of concern:
It can be hard to focus on the health of our investments knowing that many people are struggling for survival in war zones around the world.
Yet amid global geopolitical uncertainty, our responsibility to our family’s future remains.
In his latest article, Pendal’s head of multi asset Michael Blayney offers some tips for managing investments in times of global turmoil.
A few key points:
Global economic growth remains resilient despite the most significant monetary policy tightening cycle in four decades – diminishing the chances of a hard landing.
That’s what Pendal multi-asset PM Alan Polley sees in his team’s economic cycle model.
“Last year we were concerned the services sector – which was holding everything together – might turn down and join the manufacturing sector in contraction,” says Alan. “It appears that isn’t happening.”
Pendal’s economic cycle model is signalling continued economic growth to start 2024 due to:
“No one told the US consumer that 550 basis points of interest rate increases is supposed to lead to recession,” says Alan.
Right now, many investors will be chewing over whether to let high-performing investment settings ride in 2024.
It’s tempting. But Pendal’s head of multi-asset Michael Blayney believes it’s important to rebalance portfolios after a period of strong performance.
“It is very hard to do emotionally, because you’re rewarding the losers and penalising the winners,” Michael says.
“But in the long term, markets do exert a degree of mean-reverting behaviour.
“After a period of strong performance it makes sense to take some profits – and that’s what rebalancing is.
“For an adviser, it’s important to set the long-term strategy with the client. Review regularly – perhaps once a year – and then have active asset allocation.
“If you do nothing else, rebalance because then you will naturally buy low and sell high.”
As 2023 comes to a close there’s a relative calm in markets after several years of volatility in inflation, interest rates and markets.
That means it’s a good time for investors to examine their portfolios, says Pendal’s head of multi-asset Michael Blayney.
Financial markets have shifted to a “more normal” environment in recent months – and investors should think about portfolio allocation in a more traditional way, says Michael.
“Investors should maintain a balanced mix of equities and bonds and some alternatives,” argues Michael.
“In Australian equities you have a market that offers pretty good dividend yields and you get franking.
“We also still really like bonds. There is a yield cushion in case of further volatility.
“Alternatives should still be part of a portfolio, but with bond yields higher investors don’t need as large an exposure to alternatives to generate returns.”
Have you checked your “home bias” recently?
The term refers to the percentage of a portfolio invested in domestic versus international assets.
For years Australian investors drifted away from a traditional preference for investing at home.
Reasons included greater diversification in geography and sectors, better exposure to tech and lower carbon intensity.
But now those arguments are losing their punch.
“There were good reasons for that shift, but we think it is now done,” says Pendal multi-asset PM Alan Polley.
Alan argues investors should check their home bias “and either keep it as it is and stop drifting – or even marginally go the other way now and increment the home bias up a little bit”.
In a new article Alan explains why it’s time to consider moving back home.
Loading posts...
Loading posts...