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A defensive Aussie bond fund that delivers market-leading
performance with positive environmental and social outcomes.
Strong performance One of the best-performing composite bond funds in the market.^ An institutional-grade portfolio that plays a role in any portfolio due to active risk management – the hallmark of Pendal’s seasoned Bond, Income and Defensive Strategies team.

^ First quartile in Morningstar’s Australia Fund Bonds - Australia category for the three years to June 30, 2021 and since inception (Aug 3, 2016).

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Defensive and diversifying The strategy protects on the downside while also participating in risk-on environments to ensure clients get maximum benefit from their allocation to a low-yielding sector. Read more
Invest in sustainable and impact bonds One of the only sustainable, actively-managed fixed income solutions of its kind. Invests in sustainable bonds screened for environmental, social and governance (ESG) factors and impact bonds designed to drive positive change and strong returns. Read more

What is Pendal Sustainable Australian Fixed Interest Fund?

Portfolio manager George Bishay manages one of the only sustainable, actively-managed fixed income solutions of its kind.^^ In this short video George explains the strategy in plain language.

^^ One of only three Australian bond funds considered sustainable out of 33 funds in Zenith’s Australian bond universe.

Our performance

The strategy has delivered strong performance — not just relative to other sustainable funds, but to the entire Australian core bond universe. This institutional-grade strategy can play a role in all portfolios due to the time-tested, active risk management processes run by our seasoned team.

The fund aims to provide a return (before fees, costs and taxes) that exceeds the Bloomberg AusBond Composite 0+ Yr Index by 0.75% pa over rolling 3-year periods.

Find out more
Return
(3-year p.a., before fees and tax)

Source: Pendal. Past performance is not a reliable indicator of future performance. For performance of the fund over the last 1,3 and 5 years, please refer to the Fund Performance table below.

Benchmark return
(3-year p.a.)

Source: Pendal

Impact on society and the environment

About 40 per cent of the strategy is invested in impact bonds which aim to generate both a financial return and a positive impact on society. Many of these bonds are designed to advance the United Nations Sustainable Development Goals. Impact is recorded at the fund level, providing a tangible record of contribution. Recent investments include National Housing Finance and Investment Corporation social bonds which provide low-cost finance to community housing providers, putting a roof over the head of low-income and disadvantaged Australians.

Read Kerry and Steven’s story

Calculate your impact*

Here are some of the ways Pendal Sustainable Australian Fixed Interest Fund is making the world a better place (data current at March 31, 2021). Calculator results are indicative only. Actual results may differ from forecasts provided.

The Fund size averaged about $270 million in the year to March 2021 (and reached $421 million in June 2021).

Enter an amount to fund out what your personal impact could be:

$

An investment of A$ 270,000,000 in Pendal Sustainable Australian Fixed Interest Fund...

20,040

megawatt hours of renewable energy generated (enough to power 4,360 Australian households annually)

22,263

tonnes of greenhouse gas emissions avoided (equivalent to taking 9,789 cars off the road annually)

1,062,047

litres of water cleaned, recycled or treated annually

120

hectares of forest restored (equivalent to 68 Melbourne Cricket Grounds)

7,743

underprivileged students educated*

4,333

microfinance loans made to financially under-served entrepreneurs from developing nations*

1,525

loans made to female-owned small and medium businesses with limited access to formal sources of financing*

460

teachers trained in developing nations*

635

small-scale farmers supported with improved agricultural technology*

10,367

people given access to information and communication tech in developing nations and remote regions*

83

social or affordable homes*

129,963

annual passenger trips on low-carbon transport


(*) The outcomes displayed by this calculator are based on projections provided by the issuers of bond securities (Issuers) held by the Pendal Sustainable Fixed Interest Fund (Fund). Information provided by this calculator is indicative only and should not be relied upon when making an investment decision or recommendation in relation to the Trust. While we have used every effort to ensure the assumptions on which the projections are based are reasonable, the information provided to us by the Issuers may be inaccurate or may not take into account known or unknown risks and uncertainties. Actual results may differ from the projections and subsequent changes in circumstances may occur at any time that impact the accuracy of the results. Past performance is not a reliable of future performance.

The impact numbers are based on data from April 1, 2020 to March 31, 2021.

Our approach

Australians increasingly expect their investments to meet both financial objectives and community expectations on environmental, social and governance (ESG) issues.

But we also believe sustainability considerations are important for the quality and robustness of a portfolio’s securities — and ultimately drive higher and more stable returns over the long term.

Pendal Sustainable Australian Fixed Interest Fund is one of the only sustainable, actively-managed fixed income solutions of its kind.^^

The strategy is an institutional-grade portfolio of securities vetted through our in-house ESG screens. It is designed to achieve strong performance and a measureable positive impact on social and environmental initiatives.

It’s managed by Pendal’s well-regarded fixed income boutique and backed by the resources of our equities, diversifieds and responsible investming teams including our wholly-owned sustainable investment business Regnan.

^^ One of only three Australian bond funds considered sustainable out of 33 funds in Zenith’s Australian bond universe.

A diverse range of investments

Pendal Sustainable Australian Fixed Interest Fund invests in a diverse range of securities including Australian government and semi-government bonds, sustainably-screened corporate bonds and ESG thematic impact bonds (climate, social and sustainable).

We apply active management techniques including an analysis of ESG factors on potential performance.

Opportunities are then identified at sector, issuer, security, duration and yield curve levels, supported by top-down and bottom-up research.

The fund features two ESG screening processes:

  • A negative screen which prevents the fund investing in businesses that earn more than 10 per cent of revenue from products such as tobacco, weapons, uranium, pornography, gaming or thermal coal.
  • A sustainability screen which leverages expertise within Pendal’s wholly owned responsible investing leader Regnan for Australian issuers and MSCI for global issuers. The fund is designed to benefit from the rise in social and green bond issuance through greater allocation to primary issuance compared to many vanilla investment funds.

Active tilt to impact bonds

About 40 per cent of the strategy is invested in “impact bonds” which aim to generate both a financial return and a positive impact on society.

Impact investing is among the latest developments in the evolution of responsible investing.

Ethical funds started by screening out businesses such as tobacco growers, casinos and weapon makers. Today most investors use Environmental, Social and Governance (ESG) factors as a standard form of analysis.

Impact investing goes further, recognising that portfolios can be biased towards securities that generate positive outcomes for the world, while also delivering strong returns.

Impact is recorded at the fund level, providing a tangible record of contribution.

Examples of recent Pendal SAFI investments in green or social bonds include:

  • NSW Treasury Corporation Green Bond — funds green projects across the State including low-carbon transport and buildings, renewable energy and land conservation.
  • International Finance Corporation Social Bond — supports projects such as the IFC’s Banking on Women and Inclusive Business programs which benefit people in emerging markets including women and low-income communities with limited access to essential services.
  • European Investment Bank Climate Awareness Bond — Helps fund renewable energy projects across Europe including as offshore wind farm in Portugal, a lithium-ion battery factory in Poland and an energy-efficient shopping centre and railway station in Finland.
  • Lendlease 2027 Green Bond — Proceeds support green buildings across Lendlease’s global portfolio including Barangaroo in Sydney and buildings in Chicago, London and Singapore.
Pendal’s Impact Bond Process

Assessment
of Issuer

  • Credit quality of issuer
  • Issuer is a sustainable leader and part of the investable universe
  • Valuation of the bond

Use of
proceeds

The underlying projects must meet our expectations and have targeted environmental and social outcomes in addition to financial returns.

Project
selection &
management

There is a sufficiently independent or qualified process for ensuring new projects fit within the scope of the bond and they are managed appropriately.

Independent
review

Independent verification or certification prior to issuance Third party auditing or review to confirm ongoing compliance

Impact
Reporting

We monitor and record impact reporting, engaging with issuers about our expectations

A seasoned team with a time-tested process

Co-portfolio managers Tim Hext and George Bishay have more than 50 years of combined experience in investment management.

Tim has extensive experience in banking, financial markets and funding and manages Australian bond portfolios for Pendal’s Bond, Income and Defensive Strategies (BIDS) team.

George Bishay manages credit, fixed interest and enhanced cash portfolios for the BIDS team, including Regnan Credit Impact Trust.

George was awarded “Alpha Manager” status in 2019 by Money Management publisher FE fundinfo. The award recognised George’s ability to create risk-adjusted alpha over his career-long track record in the asset management industry.

Led by Vimal Gor, Pendal’s 15-person BIDS boutique is one of the most experienced and well-regarded fixed income teams in Australia. The team manages more than $20 billion in assets.

In 2020 the BIDS team won the Australian Fixed Interest category in the Zenith awards.

In addition, Pendal has a strong pedigree in responsible investing. Our portfolio managers are supported by inhouse ESG experts including our wholly-owned Regnan sustainable investment business.

How are investments are mapped to
UN Sustainable Development Goals?
Here are some examples:

IFC Social Bond

IBRD Green Bond

IFC Social Bond

Australian Catholic University

Sustainable Bond

IFC Social Bond

Australian Catholic University

Sustainable Bond

IFC Social Bond

IADB EYE Social Bond

IFC Social Bond

IBRD Green Bond

Aquasure Vic Desalination (matured)

NAB Climate Bond

Westpac Climate Bond

IBRD Green Bond

Woolworths Green Bond

Mitsubishi UFJ Green

CBA Climate Bond

Australian Catholic

University Sustainable Bond

IADB EYE Social Bond

IFC Social Bond

Australian Catholic University

Sustainable Bond

NAB Climate Bond

Westpac Climate Bond

IBRD Green Bond

Woolworths Green Bond

Mitsubishi UFJ Green

CBA Climate Bond

NAB Climate Bond

Westpac Climate Bond

CBA Climate Bond

Australian Catholic University

Sustainable Bond

NAB Climate Bond

Westpac Climate Bond

IBRD Green Bond

Woolworths Green Bond

CBA Climate Bond

Australian Catholic University Sustainable Bond
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NAB Climate Bond
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Westpac Climate Bond
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IFC Social Bond
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IBRD Green Bond
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IADB EYE Social Bond
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Woolworths Green Bond
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Aquasure Vic Desalination (matured)
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Mitsubishi UFJ Green
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CBA Climate Bond
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Source: https://sustainabledevelopment.un.org/sdgs. These are 13 of the 17 SDGs. The others are: Life Below Water, Life on Land, Peace and Justice Strong Institutions, Partnerships to achieve the Goal

Our team

George Bishay

Portfolio Manager

                                   

Managing a mix of credit, fixed interest and enhanced cash portfolios, George holds a wealth of experience in portfolio management and credit analysis with a specific focus on Asset Back Securities, Industrials, Real Estate and Resources sectors.

George has managed dedicated Sustainable fixed interest portfolios for a decade. He has also worked across numerous fixed income, credit and money market portfolios in portfolio management, credit analysis and dealing roles for over 20 years. Prior to this George worked in an accounting role for three years.

In 2019 George was awarded the Alpha Manager status by Money Management’s parent, FE fundinfo, in recognition of his career-long performance in the asset management industry. George was one out of 11 Australia-based investment professionals included in this list of esteemed professionals across multiple asset classes, after being assessed on his ability to create risk-adjusted alpha (outperformance) over his entire track record.

George obtained a Master’s degree in Business (Finance), a Bachelor’s degree in Business (Accounting & Finance) and a Graduate Diploma in Applied Finance and Investment. He has a Registered Representatives and Dealer Accreditation with the Australian Financial Markets Associations.

Tim Hext

Portfolio Manager

                                   

Tim joined Pendal Group in February 2017 with responsibility for managing Australian Bond portfolios. Tim has extensive experience in banking, financial markets and funding.

Tim joined Pendal Group from NSW Treasury Corporation (TCorp), where he was General Manager, Funding and Balance Sheet, with responsibility for defining and executing TCorp’s funding programme and strategy. Tim’s prior experience includes senior positions in Westpac Treasury, Commonwealth Bank of Australia, Deutsche Bank, Bain & Co and Swiss Bank Corporation.

Tim holds a Masters of Economics of Development from the Australian National University and a Bachelor of Commerce from the University of New South Wales

Sales

Tim North Ash

Head of Distribution

Nicki Ashton

Head of Institutional

Lee Hopperton

Head of High Net Worth Distribution

Matthew Rooney

Head of Bank & Insurance Distribution

Laurice Considine

Head of Independent Licensee Distribution

Jeremy Dean

Head of Regnan and Responsible Investment Distribution

Fund performance

                   
As at
31/08/21
1m 3m 1yr 3yr (p.a) 5yr (p.a) % since inception August 2016
Total return After fees 0.10 2.59 2.34 5.37 3.75 3.72
Distribution 0.00 0.33 0.91 3.61 2.66 2.62
Growth 0.10 2.26 1.43 1.76 1.09 1.10
Total return (Before fees and tax) 0.14 2.70 2.75 5.79 4.16 4.13
Benchmark: Bloomberg AusBond Composite 0+ Yr Index 0.09 2.55 1.05 4.52 3.33 3.30

Source of fund performance data: Pendal. Past performance is not a reliable indicator of future performance.

This information is for general information and is not to be regarded as a securities recommendation. Where performance returns are quoted “After fees” then this assumes reinvestment of distributions and is calculated using exit prices which take into account management costs but not tax you may pay as an investor. Where “Growth” returns are shown, these represent the percentage change in the value of units in the fund excluding any distributions paid. “Distribution” returns equal the difference between the “Total return (After fees)”, and the Growth return. Where performance returns are quoted “After fees and tax”, they are calculated using exit prices which take into account management costs and taxes paid within the trust up to a maximum of 15%. Where performance returns are quoted “Before fees and tax”, they exclude the effects of management costs and any taxes. You can view our Unit Pricing Discretions Policy here.

Apply for the Pendal Sustainable Australian Fixed Interest Fund
Apply online via Mainstream or download the form.

Fund information

Entry price

$1.0543 (23/09/2021)

Exit price

$1.0527 (23/09/2021)

History View history
Significant features

The Pendal Sustainable Australian Fixed Interest Fund is an actively managed portfolio of Australian cash and fixed interest securities. The Fund aims to generate excess returns by investing in assets with superior sustainability credentials.

Fund objective

The Fund aims to provide a return (before fees, costs and taxes) that exceeds the Bloomberg AusBond Composite 0+ Yr Index by 0.75% p.a. over rolling 3 year periods.

Pendal Fund Services Limited is the responsible entity and issuer of units in the Pendal Sustainable Australian Fixed Interest Fund (Fund) ARSN: 612 664 730. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1800 813 886 or visiting www.pendalgroup.com. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. The information on this website is for general information purposes only and 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 and, if necessary, seek professional advice. This information is not to be regarded as a securities recommendation. Where performance returns are quoted “After fees” then this assumes reinvestment of distributions and is calculated using exit prices which take into account management costs but not tax you may pay as an investor. Where “Growth” returns are shown, these represent the percentage change in the value of units in the Fund excluding any distributions paid. “Distribution” returns equal the difference between the “Total return (After fees)”, and the Growth return. Where performance returns are quoted “After fees and tax”, they are calculated using exit prices which take into account management costs and taxes paid within the trust up to a maximum of 15%. Where performance returns are quoted “Before fees and tax”, they exclude the effects of management costs and any taxes. You can view our Unit Pricing Discretions Policy here.