Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.

Mainstream Online Web Portal

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.

The case for bonds as rate hikes push Australia towards recession

With interest rates rising and the risk of a recession rising, it’s time to look for a safe harbour, says Pendal’s ANNA HONG 

  • Rate rise risks triggering a recession
  • Fixed income provides safe option

RECESSION talk increased in Australia this week after the RBA’s decision to lift rates for the 12th time in just over a year.

It means investors need to think about safer assets, argues Anna Hong, assistant portfolio manager with Pendal’s Income and Fixed Interest team. 

“That’s government bonds, cash and high-grade investment credit,” Hong explains. “But it’s important that it’s Australian fixed income and cash.” 

That’s because Australia is one of just a handful of countries to record a budget surplus this financial year and — not withstanding the threat of recession — the economy remains in very good shape, Hong says. 

“From an economic perspective, even if things go wrong, the government is in a good position to support the Australian economy.

“As a result assets within Australian shores should be safer than almost any other part of the world,” Hong says. 

Find out about

Pendal’s Income and Fixed Interest funds

The risk of recession in Australia is very real, Hong says.

While the government can tighten fiscal policy by increasing taxes, that often isn’t politically palatable.

It means much of the heavy lifting in controlling aggregate demand falls to the Reserve Bank. 

“The Reserve Bank hasn’t yet been able to reduce inflation enough with the interest rates increases they have already done,” Hong says.

“There are a lot of factors out of their control and they can only affect aggregate demand using interest rates.

“They are in a position where they almost have to break something to contain inflation, which they don’t really want to do.” 

The “something” is the economy.  It means investors should consider safer assets, she says. 

“Anything related to government — federal or state — is backstopped by the federal government and an investor will likely get their money back. 

“The RBA regards our major banks as ‘unquestionably strong’ and are well placed to weather any storms. This makes major bank credit a relatively safe place for investors.” 

“If you go into high-risk assets, even high-growth stocks, you might invest $100 today and not have $100 in six months because company outlooks can change very quickly now the risk of recession is higher.” 

About Anna Hong and Pendal’s Income and Fixed Interest team

Anna Hong is an assistant portfolio manager with Pendal’s Income and Fixed Interest team.

Pendal’s Income and Fixed Interest boutique is one of the most experienced and well-regarded fixed income teams in Australia.

With the goal of building the most defensive line of funds in Australia, the team oversees A$22 billion invested across income, composite, pure alpha, global and Australian government strategies.

Find out more about Pendal’s fixed interest strategies here

About Pendal Group

Pendal is an independent, global investment management business focused on delivering superior investment returns for our clients through active management.

Contact a Pendal key account manager

This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current at June 7, 2023 PFSL is the responsible entity and issuer of units in the Pendal Monthly Income Plus Fund (ARSN: 137 707 996) and Pendal Dynamic Income Fund (ARSN: 622 750 734) (Funds). A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com.

The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested.

This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation.

The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs.

Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com

Keep updated
Sign up to receive the latest news and views