Rates, AI and Bonds: Where the opportunities are emerging | Pendal Group

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Rates, AI and Bonds: Where the opportunities are emerging

July 29, 2026

In this video podcast, Pendal head of government bond strategies TIM HEXT explores how shifting interest rates, accelerating AI investment and evolving macroeconomic conditions are creating opportunities across fixed income markets

An excerpt from this interview with Pendal’s head of government bond strategies Tim Hext:

“Australia’s had two great investment booms this century,” says Hext.

“The first one was the mining boom, and that was huge. In fact, in terms of scale, it’s bigger than the current IT boom we’re seeing now.

“But in the US, the current IT boom, particularly around the well-known story of data centres and AI, is bigger than anything they’ve had, and of course that puts pressure on capital.

“The promise of high returns means people borrowing the money are happy to pay more, so you start to get this term premium increase, and real interest rates go up. It’s a great spot for investors.”

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Pendal Government Bond Fund


About Tim Hext and Pendal’s Income & Fixed Interest boutique

Tim Hext is a Pendal portfolio manager and head of government bond strategies in our Income and Fixed Interest team.

Tim has extensive experience in banking, financial markets and funding including senior positions with NSW Treasury Corporation (TCorp), Westpac Treasury, Commonwealth Bank of Australia, Deutsche Bank, Bain & Co and Swiss Bank Corporation.

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

Find out more about Pendal’s fixed interest strategies here


About Pendal

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.

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This video has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332 AFSL 431426.

It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider whether the information is suitable for your circumstances and we recommend that you seek professional advice.

The product disclosure statement (PDS) for the relevant Pendal Income and Fixed Interest fund, issued by PFSL, should be considered before deciding whether to acquire, dispose, or hold units in the relevant fund. The relevant PDS and Target Market Determination can be obtained by calling 1300 346 821 or visiting our website www.pendalgroup.com.

To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. No company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital. All investing involves risk including the possible loss of principal.

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