Close
Leave Feedback
Welcome to the new btim.com.auTake a two minute tour to see what we've changed
Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.
Mainstream Online Web Portal
LoginInvestors 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.
Pendal’s head of income reveals a high-conviction call and a non-consensus view for 2024
November 29, 2023
Markets are pricing in a soft landing, but in a new Bloomberg webinar, Pendal’s head of income strategies AMY XIE PATRICK argues a US recession is not off the table
- Why bonds, why now? Pendal’s income and fixed interest experts explain
- Browse Pendal’s fixed interest funds
- Watch the full Bloomberg 2024 Market Outlook webinar featuring Amy Xie Patrick
THIS week I was asked about my highest conviction call for 2024 in a Bloomberg webinar discussing key market views for the coming year.
While markets are pricing in a soft landing, I argued there would likely be a US recession in 2024.
A lag in the impact of policy tightening has been evident in the slowdown of inflation and wages in recent months.
This can be seen particularly in shifting trends in the labour market.
The most obvious signal is a falling “quits rate”, signalling workers are becoming less confident about alternative job prospects.
In my view, lagged effects will continue to appear in the data next year — and as we all know from history, recessions happen slowly, then suddenly.
We will likely find a moment in the second half of next year where markets realise disinflation is no longer immaculate — and is being caused by recessionary forces.
A non-consensus view
When asked about my most non-consensus view, I can’t resist pointing out clear signals that the Fed’s Senior Loan Officer survey has been sending.
This survey asks US loan officers if they are tightening or loosening lending standards.
The data points to US default rates likely hitting double digits by the second half of 2024.
Find out about
Pendal’s Income and Fixed Interest funds
Unlike the interest rate charged on borrowings, lending standards refer to the criteria and restrictions placed on borrowers seeking finance.
The tighter those standards, the harder it is for marginal borrowers to access funding.
When small businesses can no longer access funding for every-day business needs, bankruptcies and defaults start to happen.
Rising default rates are already evident, yet high-yield credit spreads are still glued to the floor.
Even if my default rate outlook is overly pessimistic, the risk-reward doesn’t seem to be there for continuing to stretch down the quality ladder for that extra bit of yield.
Especially not when considering two-year US government bonds are now yielding almost 5%.
Listen to the full Bloomberg webinar featuring Amy Xie Patrick
About Amy Xie Patrick and Pendal’s Income and Fixed Interest team
Amy is Pendal’s Head of Income Strategies. She has extensive experience and expertise in emerging markets, global high yield and investment grade credit and holds an honours degree in economics from Cambridge University.
Pendal’s Income and Fixed Interest boutique is one of the most experienced and well-regarded fixed income teams in Australia. Pendal won the 2023 Sustainable and Responsible Investments (Income) category in the Zenith awards. In 2021 the team won Lonsec’s Active Fixed Income Fund of the Year Award.
The team oversees some $20 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 a global investment management business focused on delivering superior investment returns for our clients through active management.
This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current at November 28, 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 Funds and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Funds 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 Funds.
An investment in the Funds 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. While 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