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.

US equities: Earnings are looking better than expected

It could be time for US equities investors to take a bit of money off the table in some sectors, says Pendal’s ASHLEY PITTARD

THE macro-economy – inflation, growth, employment – drives top-line sentiment among investors.

But earnings in sectors and companies drive the valuation of specific stocks, notes Pendal’s head of global equities Ashley Pittard.

This was demonstrated recently by a better-than-expected result for Facebook-owner Meta which pushed its share price up 25 per cent.

As the graph below shows, it then fell back sharply, albeit briefly, when stronger-than-expected labour force figures in the US hinted at further interest rate rises, taking the steam out of Wall Street.

Facebook-owner Meta’s share price over the past week. Source: Google Finance

Still, earnings season allows investors to look beyond the big picture.

“We’re about halfway through US earnings season and we’ve seen earnings growth fall by about 3 per cent, which is marginally better than what was forecast,” says Pittard, who manages Pendal Concentrated Global Share Fund.

Sectors to watch

While the energy sector has been the out-performer, thanks to very high prices, consumer discretionary stocks have been the surprise packet so far this season.

“The worst-case scenarios for the US consumer have been averted and they’re looking okay. It reinforces the view that if there is a recession, it should be mild.”

The laggards, as expected, have been the technology stocks.

“Across the economy, you are now seeing a normalisation of spending on technology and a slowing of cloud build outs,” Pittard says.

Find out about

Pendal Concentrated Global Share Fund

“As a result, you are seeing cost savings announcements and capital expenditure cuts in the big tech companies.”

Across the earnings season there have been plenty of signs of easing inflationary and supply chain pressures.

At Amazon, for example, shipping costs as a percentage of gross merchandise value is back to 2019 levels and is trending lower.

Pittard notes one exception is Apple, where the company has been hit hard by production lockdowns in China.

Time to take money off the table

Pittard believes it’s time to “take a little bit of money off the table” when it comes to energy stocks.

“I’m only talking about a couple of percentage points, and I’d use that to invest in the 2022 losers — that’s companies like Netflix, Warner Bros, Meta, Alphabet and Amazon,” he says.

Beyond the Numbers

Crispin Murray’s
biannual ASX outlook


Pittard uses Meta, which owns Facebook, Instagram and WhatsApp, to illustrate his point.

“After Meta’s earnings result its share price jumped 25 per cent. That’s because it was beaten down so much in 2022 – it fell nearly 65 per last year.

“When Meta said advertising revenue wasn’t as bad as people had thought, and they’re taking cost cutting measures and reducing capital expenditure, the share price surged.

“In summary, you want to be fully invested,” Pittard says.

“Earnings are coming through better-than-expected. There’s a lot of hurt in the market already from what happened last year.”

But investors need to be selective.

“You want to keep your financials because the recession will be mild. You want to keep your industrials because of the re-shoring that’s going on.

And you can be selective in technology and consumer discretionary.

“Investors should use the strength of their energy investments to rotate into some of those assets. “

About Ashley Pittard and Pendal Concentrated Global Share Fund

Ashley Pittard leads Pendal’s Global Equities investment boutique. He is responsible for setting the strategy, processes and risk management for the boutique and its funds including Pendal Concentrated Global Share (COGS) Fund.

Ashley has more than 24 years of finance experience, including roles in petroleum economics, global energy investment analysis and 20 years as a global equities fund manager.

Pendal COGS Fund is an actively managed, concentrated portfolio of global shares diversified across a broad range of global sharemarkets.

Find out more about Pendal Concentrated Global Share Fund

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

In 2023, Pendal became part of Perpetual Limited (ASX:PPT), bringing together two of Australia’s most respected active asset management brands to create a global leader in multi-boutique asset management with autonomous, world-class investment capabilities and a growing leadership position in ESG.

Contact a Pendal key account manager here.

This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at February 8, 2023. PFSL is the responsible entity and issuer of units in the Pendal Concentrated Global Share Fund (Fund) ARSN: 613 608 085. 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 8:00am to 6:00pm (Sydney time) or visit our website www.pendalgroup.com

Keep updated
Sign up to receive the latest news and views