Population growth is supporting ASX earnings | Floating rate credit as an inflation hedge | Shopping malls a bright spot for A-REITs | Value in small caps
A growing population and the uneven impact of rising interest rates are two factors supporting company earnings right now. Pendal’s head of equities CRISPIN MURRAY explains
- Rising population supports company earnings
- Company earnings driven by nominal, not per capita, GDP
- Find out about Pendal Focus Australian Share fund
MOST people would be aware from the recent per-capita recession headlines that Australia’s population growth is outstripping economic growth.
But Australia’s rapidly growing population is also a key reason why corporate earnings are holding up, says Pendal’s head of equities Crispin Murray.
“All up, we’re probably looking at about a 3 per cent rise in the population today versus where we were a year ago,” says Murray.
Population growth has been supported by direct immigration as well as temporary visas, he says.
“That’s people coming to Australia with money in their pockets needing to spend when they arrive to set themselves up and needing to get accommodation, which is driving up rents.
“This is part of the reason that we’re seeing resilience in the top line of companies because they’re basically driven by nominal GDP, not per capita GDP.”
Population growth is also helping offset the effects of the so-called ‘mortgage cliff’ forcing households into higher, variable mortgage payments as low-rate fixed loans expire.
As Pendal’s head of bond strategies Tim Hext recently noted, we are about half-way through that step-up period – and so far most fixed-mortgage holders seem to be adjusting ok.
Likewise, the effects of the mortgage cliff have been muted in company reports this earnings season.
“The mortgage cliff is real – but what is offsetting it is population growth,” Murray said at his bi-annual Beyond The Numbers webinar last week.
“With each company we met over reporting season, we talked about the issues facing them and whether they were seeing the consequences of this mortgage cliff.
“But so far, the consequences are very limited.”
Uneven interest rate burden also supports earnings
The uneven impact of rising interest rates across the community is also holding up corporate earnings, points out Murray.
“Clearly, the concentration of mortgage debt is predominantly in the under-45s and particularly in the under-40s. That’s where the core pressure remains.
“As you get older, you see a big skew to savings and the people with the savings are clearly getting the benefit of higher interest rates.
“While we have seen some draw-down on savings overall, you’re actually still seeing everyone over the age of 35 adding to their savings pool.”
Data comparing spending patterns in the last three months to the last four weeks shows a distinct change in trend for under-35s – but little change for older groups.
“There is a quite complex set of trends happening in the economy, which is why I think we’ve proven to be more resilient.
“There’s a lot of focus on the pressures on people under 45, but less awareness of the spending which is happening in the older demographics.
“It’s an important thing to be aware of.”
About Crispin Murray and Pendal Focus Australian Share Fund
Crispin Murray is Pendal’s Head of Equities. He has more than 27 years of investment experience and leads one of the largest equities teams in Australia. Crispin’s Pendal Focus Australian Share Fund has beaten the benchmark in 12 years of its 16-year history (after fees), across a range of market conditions.
Pendal is a global investment management business focused on delivering superior investment returns for our clients through active management.
Pendal Concentrated Global Share Fund No.3 (APIR BTA0056AU) (ARSN 087 593 299) and
Pendal Concentrated Global Share Fund No.3 Class B (APIR BTA0270AU) (ARSN 087 593 299)
Delegated Investment Manager
As stated in our notice of 13 September 2023, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Funds’ delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
We wish to provide further details regarding the appointment and the potential impact to investors. This update should be read in conjunction with the notice of 13 September 2023.
Transaction costs
The appointment of Barrow Hanley will require the sale and purchase of securities within the Fund as we transition to the new portfolio. As is currently the case, there will be costs such as brokerage and transaction taxes involved in these transactions which will be borne by the Fund.
As a result of Barrow Hanley’s appointment, Pendal estimates that the Fund will incur total transaction costs of 0.12% (including brokerage, transaction taxes and fees). This will be a one-off cost that covers the sale of current securities and the purchase of securities selected by Barrow Hanley. This amount represents transaction costs incurred by the Fund and is not a fee paid to Pendal.
These costs were taken into account in assessing whether the proposed changes to the portfolio are in the best interests of investors.
Tax implications
Pendal does not provide notice of the tax implications of transactions within the portfolio to investors. This was, however, a factor in our consideration of whether the appointment of Barrow Hanley is in the best interests of investors.
At 30 June 2023, the Fund had net assets of $40M of which $5.1M were net unrealised capital gains (before the application of the 50% CGT discount). The Fund has net capital losses brought forward from prior years of $503.3M, which will be applied to reduce any realised capital gains from the sale of securities as we transact to the new portfolio to nil.
Pendal Concentrated Global Share Fund No.2 (APIR RFA0821AU) (ARSN 089 938 492)
Delegated Investment Manager
As stated in our notice of 13 September 2023, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Funds’ delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
We wish to provide further details regarding the appointment and the potential impact to investors. This update should be read in conjunction with the notice of 13 September 2023.
Transaction costs
The appointment of Barrow Hanley will require the sale and purchase of securities within the Fund as we transition to the new portfolio. As is currently the case, there will be costs such as brokerage and transaction taxes involved in these transactions which will be borne by the Fund.
As a result of Barrow Hanley’s appointment, Pendal estimates that the Fund will incur total transaction costs of 0.12% (including brokerage, transaction taxes and fees). This will be a one-off cost that covers the sale of current securities and the purchase of securities selected by Barrow Hanley. This amount represents transaction costs incurred by the Fund and is not a fee paid to Pendal.
These costs were taken into account in assessing whether the proposed changes to the portfolio are in the best interests of investors.
Tax implications
Pendal does not provide notice of the tax implications of transactions within the portfolio to investors. This was, however, a factor in our consideration of whether the appointment of Barrow Hanley is in the best interests of investors.
At 30 June 2023, the Fund had net assets of $73.8M of which $10.3M were net unrealised capital gains (before the application of the 50% CGT discount). The Fund has no revenue or net capital losses brought forward from prior years to offset any realised capital gains from the sale of securities as we transact to the new portfolio.
Pendal Concentrated Global Share Fund Hedged Class R (APIR RFA0031AU) (ARSN 098 376 151)
Pendal Concentrated Global Share Fund Hedged Class Z (APIR PDL6836AU) (ARSN 098 376 151)
Delegated Investment Manager
As stated in our notice of 13 September 2023, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Funds’ delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
We wish to provide further details regarding the appointment and the potential impact to investors. This update should be read in conjunction with the notice of 13 September 2023.
Transaction costs
The appointment of Barrow Hanley will require the sale and purchase of securities within the Fund as we transition to the new portfolio. As is currently the case, there will be costs such as brokerage and transaction taxes involved in these transactions which will be borne by the Fund.
As a result of Barrow Hanley’s appointment, Pendal estimates that the Fund will incur total transaction costs of 0.12% (including brokerage, transaction taxes and fees). This will be a one-off cost that covers the sale of current securities and the purchase of securities selected by Barrow Hanley. This amount represents transaction costs incurred by the Fund and is not a fee paid to Pendal.
These costs were taken into account in assessing whether the proposed changes to the portfolio are in the best interests of investors.
Tax implications
Pendal does not provide notice of the tax implications of transactions within the portfolio to investors. This was, however, a factor in our consideration of whether the appointment of Barrow Hanley is in the best interests of investors.
At 30 June 2023, the Fund had net assets of $185.8M of which $32.6M were net unrealised capital gains (before the application of the 50% CGT discount). The Fund has no revenue or net capital losses brought forward from prior years to offset any realised capital gains from the sale of securities as we transact to the new portfolio.
Pendal Concentrated Global Share Fund (APIR BTA0503AU) (ARSN 613 608 085)
Delegated Investment Manager
As stated in our notice of 13 September 2023, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Funds’ delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
We wish to provide further details regarding the appointment and the potential impact to investors. This update should be read in conjunction with the notice of 13 September 2023.
Transaction costs
The appointment of Barrow Hanley will require the sale and purchase of securities within the Fund as we transition to the new portfolio. As is currently the case, there will be costs such as brokerage and transaction taxes involved in these transactions which will be borne by the Fund.
As a result of Barrow Hanley’s appointment, Pendal estimates that the Fund will incur total transaction costs of 0.12% (including brokerage, transaction taxes and fees). This will be a one-off cost that covers the sale of current securities and the purchase of securities selected by Barrow Hanley. This amount represents transaction costs incurred by the Fund and is not a fee paid to Pendal.
These costs were taken into account in assessing whether the proposed changes to the portfolio are in the best interests of investors.
Tax implications
Pendal does not provide notice of the tax implications of transactions within the portfolio to investors. This was, however, a factor in our consideration of whether the appointment of Barrow Hanley is in the best interests of investors.
At 30 June 2023, the Fund had net assets of $602.5M of which $120.1M were net unrealised capital gains (before the application of the 50% CGT discount). The Fund has no revenue or net capital losses brought forward from prior years to offset any realised capital gains from the sale of securities as we transact to the new portfolio.
We are notifying you of some important changes relating to the Pendal Concentrated Global Share Fund No. 3 (Fund).
Following a strategic review of our global equity investment capabilities, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Fund’s delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
Why are we making the change?
As part of the broader Perpetual Group, we want to ensure our clients have exposure to competitive and differentiated strategies which utilise the investment management capabilities that we believe are best placed to meet the investment objectives of the Fund and are likely to deliver the best outcomes for investors, over the medium to long term.
Barrow Hanley, who are also part of the Perpetual Group, has a quality investment process, an experienced well-resourced team of more than 50 investment professionals, scale and depth of research and an aligned investment style to Pendal. As a result, we consider that Barrow Hanley is better placed to meet the Fund’s investment objectives, over the medium to long term.
What is changing?
Fund name
Effective on or around 31 October 2023, the Fund’s name will change (as set out below) to reflect the appointment of Barrow Hanley as the Fund’s delegated investment manager:
| Current Name | New Name |
| Pendal Concentrated Global Share Fund No. 3 | Barrow Hanley Concentrated Global Share Fund No. 3 |
Investment related changes
While the Fund will continue to operate in the same way, there will be some changes to the way the Fund is managed.
Effective from 31 October 2023, these changes include:
- Minimum and maximum number of stocks
The Fund will remain a concentrated portfolio of global shares. However, the minimum and maximum number of stocks held by the Fund will reduce from 35 – 55 stocks to 25 – 40 stocks.
- Asset allocation ranges
The Fund’s asset allocation ranges will change as follows:
| Current Asset Allocation Ranges | New Asset Allocation Ranges |
| • Global Shares 80-100% • Cash 0-20% | • Global Shares 90-100% • Cash 0-10% |
- Emerging markets exposure
The Fund will continue to primarily invest in companies domiciled in developed markets and a 20% maximum limit will be introduced for the Fund’s allocation to emerging markets.
- Labour, Environmental, Social and Ethical Considerations
Like Pendal, Barrow Hanley’s investment approach considers labour standards, environmental, social and ethical (ESG) risks to the extent that they are relevant to the current or future valuation of a stock, although Barrow Hanley’s investment approach does not consider ethical or moral judgements.
Effective from 31 October 2023, the Fund will no longer screen for companies involved in the following activities:
- uranium mining for the purpose of nuclear power generation;
- manufacture, ownership or operation of gambling facilities, gaming services or other forms of wagering;
- mining of thermal coal;
- factory animal farming; and
- weapons systems, components and support systems and services.
The Fund, however, will continue to screen for tobacco production and will not invest in companies that are directly involved in tobacco production, where tobacco production accounts for 10% or more of a company’s gross revenue.
- Buy-sell Spread
Effective from 31 October 2023, the Fund’s buy-sell spread will decrease from 0.40% (0.20% buy/0.20% sell) to 0.25% (0.15% buy/0.10% sell), reflecting lower brokerage costs that are expected to be incurred by the Fund following the appointment of Barrow Hanley.
What will stay the same?
Like Pendal, Barrow Hanley’s investment process for global shares strives to achieve the Fund’s investment objectives by adopting a bottom-up investment approach focused on in-depth fundamental company research to identify companies that temporarily trade below their intrinsic value and offer long term capital growth. Like Pendal, Barrow Hanley also applies a benchmark agnostic and high conviction approach to investing.
The Fund’s benchmark will continue to be the MSCI World ex Australia (Standard) Index (Net Dividends) in AUD and the Fund will still aim to provide a return (before fees, costs and taxes) that exceeds its benchmark over the medium to long term.
Fees and costs
The Fund’s management fee will remain at 0.90% p.a.
However, we estimate that the Fund will incur additional, one-off transaction costs of 0.12% (including brokerage, taxes and fees) as a result of Barrow Hanley’s appointment.
About Barrow Hanley
Based in Dallas, Texas (USA), Barrow Hanley is a diversified investment manager offering value-focused strategies spanning global equities and fixed income. With more than AUD$69 billion in assets under management as at 30 June 2023, Barrow Hanley has been providing quality client outcomes for more than 40 years.
Portfolio Manager Brad Kinkelaar will manage the Fund. Brad has more than 27 years’ industry experience and joined Barrow Hanley in 2017.
What do you need to do?
No action is required. You will be able to continue to invest or withdraw from the Fund in the same way.
An updated PDS reflecting the proposed appointment of Barrow Hanley and outlining the above changes, is available on www.pendalgroup.com. If you would like a hard copy of the PDS, please contact Pendal Customer Relations.
If you have any questions about your investment or would like further information regarding the changes, please contact us on 1300 346 821 (for Australian investors) or +612 9220 2499 (for overseas investors) from Monday to Friday, 8.00am to 5:30pm (Sydney time).
For any questions regarding how these changes may impact your own financial situation, we recommend that you speak to your financial advisor and/or tax accountant.
We are notifying you of some important changes relating to the Pendal Concentrated Global Share Fund No. 2 (Fund).
Following a strategic review of our global equity investment capabilities, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Fund’s delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
Why are we making the change?
As part of the broader Perpetual Group, we want to ensure our clients have exposure to competitive and differentiated strategies which utilise the investment management capabilities that we believe are best placed to meet the investment objectives of the Fund and are likely to deliver the best outcomes for investors, over the medium to long term.
Barrow Hanley, who are also part of the Perpetual Group, has a quality investment process, an experienced well-resourced team of more than 50 investment professionals, scale and depth of research and an aligned investment style to Pendal. As a result, we consider that Barrow Hanley is better placed to meet the Fund’s investment objectives, over the medium to long term.
What is changing?
Fund name
Effective on or around 31 October 2023, the Fund’s name will change (as set out below) to reflect the appointment of Barrow Hanley as the Fund’s delegated investment manager:
| Current Name | New Name |
| Pendal Concentrated Global Share Fund No. 2 | Barrow Hanley Concentrated Global Share Fund No. 2 |
Investment related changes
While the Fund will continue to operate in the same way, there will be some changes to the way the Fund is managed.
Effective from 31 October 2023, these changes include:
- Minimum and maximum number of stocks
The Fund will remain a concentrated portfolio of global shares. However, the minimum and maximum number of stocks held by the Fund will reduce from 35 – 55 stocks to 25 – 40 stocks.
- Asset allocation ranges
The Fund’s asset allocation ranges will change as follows:
| Current Asset Allocation Ranges | New Asset Allocation Ranges |
| • Global Shares 80-100% • Cash 0-20% | • Global Shares 90-100% • Cash 0-10% |
- Emerging markets exposure
The Fund will continue to primarily invest in companies domiciled in developed markets and a 20% maximum limit will be introduced for the Fund’s allocation to emerging markets.
- Labour, Environmental, Social and Ethical Considerations
Like Pendal, Barrow Hanley’s investment approach considers labour standards, environmental, social and ethical (ESG) risks to the extent that they are relevant to the current or future valuation of a stock, although Barrow Hanley’s investment approach does not consider ethical or moral judgements.
Effective from 31 October 2023, the Fund will no longer screen for companies involved in the following activities:
- uranium mining for the purpose of nuclear power generation;
- manufacture, ownership or operation of gambling facilities, gaming services or other forms of wagering;
- mining of thermal coal;
- factory animal farming; and
- weapons systems, components and support systems and services.
The Fund, however, will continue to screen for tobacco production and will not invest in companies that are directly involved in tobacco production, where tobacco production accounts for 10% or more of a company’s gross revenue.
- Buy-sell Spread
Effective from 31 October 2023, the Fund’s buy-sell spread will decrease from 0.40% (0.20% buy/0.20% sell) to 0.25% (0.15% buy/0.10% sell), reflecting lower brokerage costs that are expected to be incurred by the Fund following the appointment of Barrow Hanley.
What will stay the same?
Like Pendal, Barrow Hanley’s investment process for global shares strives to achieve the Fund’s investment objectives by adopting a bottom-up investment approach focused on in-depth fundamental company research to identify companies that temporarily trade below their intrinsic value and offer long term capital growth. Like Pendal, Barrow Hanley also applies a benchmark agnostic and high conviction approach to investing.
The Fund’s benchmark will continue to be the MSCI World ex Australia (Standard) Index (Net Dividends) in AUD and the Fund will still aim to provide a return (before fees, costs and taxes) that exceeds its benchmark over the medium to long term.
Fees and costs
The Fund’s management fee will remain at 0.90% p.a.
However, we estimate that the Fund will incur additional, one-off transaction costs of 0.12% (including brokerage, taxes and fees) as a result of Barrow Hanley’s appointment.
About Barrow Hanley
Based in Dallas, Texas (USA), Barrow Hanley is a diversified investment manager offering value-focused strategies spanning global equities and fixed income. With more than AUD$69 billion in assets under management as at 30 June 2023, Barrow Hanley has been providing quality client outcomes for more than 40 years.
Portfolio Manager Brad Kinkelaar will manage the Fund. Brad has more than 27 years’ industry experience and joined Barrow Hanley in 2017.
What do you need to do?
No action is required. You will be able to continue to invest or withdraw from the Fund in the same way.
An updated PDS reflecting the proposed appointment of Barrow Hanley and outlining the above changes, is available on www.pendalgroup.com. If you would like a hard copy of the PDS, please contact Pendal Customer Relations.
If you have any questions about your investment or would like further information regarding the changes, please contact us on 1300 346 821 (for Australian investors) or +612 9220 2499 (for overseas investors) from Monday to Friday, 8.00am to 5:30pm (Sydney time).
For any questions regarding how these changes may impact your own financial situation, we recommend that you speak to your financial advisor and/or tax accountant.
We are notifying you of some important changes relating to the Pendal Concentrated Global Share Fund Hedged (Fund).
Following a strategic review of our global equity investment capabilities, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Fund’s delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
Why are we making the change?
As part of the broader Perpetual Group, we want to ensure our clients have exposure to competitive and differentiated strategies which utilise the investment management capabilities that we believe are best placed to meet the investment objectives of the Fund and are likely to deliver the best outcomes for investors, over the medium to long term.
Barrow Hanley, who are also part of the Perpetual Group, has a quality investment process, an experienced well-resourced team of more than 50 investment professionals, scale and depth of research and an aligned investment style to Pendal. As a result, we consider that Barrow Hanley is better placed to meet the Fund’s investment objectives, over the medium to long term.
What is changing?
Fund name
Effective on or around 31 October 2023, the Fund’s name will change (as set out below) to reflect the appointment of Barrow Hanley as the Fund’s delegated investment manager:
| Current Name | New Name |
| Pendal Concentrated Global Share Fund Hedged | Barrow Hanley Concentrated Global Share Fund Hedged |
Investment related changes
While the Fund will continue to operate in the same way, there will be some changes to the way the Fund is managed.
Effective from 31 October 2023, these changes include:
- Minimum and maximum number of stocks
The Fund will remain a concentrated portfolio of global shares. However, the minimum and maximum number of stocks held by the Fund will reduce from 35 – 55 stocks to 25 – 40 stocks.
- Asset allocation ranges
The Fund’s asset allocation ranges will change as follows:
| Current Asset Allocation Ranges | New Asset Allocation Ranges |
| • Global Shares 80-100% • Cash 0-20% | • Global Shares 90-100% • Cash 0-10% |
- Emerging markets exposure
The Fund will continue to primarily invest in companies domiciled in developed markets and a 20% maximum limit will be introduced for the Fund’s allocation to emerging markets.
- Labour, Environmental, Social and Ethical Considerations
Like Pendal, Barrow Hanley’s investment approach considers labour standards, environmental, social and ethical (ESG) risks to the extent that they are relevant to the current or future valuation of a stock, although Barrow Hanley’s investment approach does not consider ethical or moral judgements.
Effective from 31 October 2023, the Fund will no longer screen for companies involved in the following activities:
• uranium mining for the purpose of nuclear power generation;
• manufacture, ownership or operation of gambling facilities, gaming services or other forms of wagering;
• mining of thermal coal;
• factory animal farming; and
• weapons systems, components and support systems and services.
The Fund, however, will continue to screen for tobacco production and will not invest in companies that are directly involved in tobacco production, where tobacco production accounts for 10% or more of a company’s gross revenue.
- Buy-sell Spread
Effective from 31 October 2023, the Fund’s buy-sell spread will decrease from 0.40% (0.20% buy/0.20% sell) to 0.25% (0.15% buy/0.10% sell), reflecting lower brokerage costs that are expected to be incurred by the Fund following the appointment of Barrow Hanley.
What will stay the same?
Like Pendal, Barrow Hanley’s investment process for global shares strives to achieve the Fund’s investment objectives by adopting a bottom-up investment approach focused on in-depth fundamental company research to identify companies that temporarily trade below their intrinsic value and offer long term capital growth. Like Pendal, Barrow Hanley also applies a benchmark agnostic and high conviction approach to investing.
The Fund’s benchmark will continue to be the MSCI World ex Australia (Standard) Index (Net Dividends) in AUD and the Fund will still aim to provide a return (before fees, costs and taxes) that exceeds its benchmark over the medium to long term.
Pendal will continue to manage the Fund’s foreign currency exposure and may use derivatives for portfolio management purposes.
Fees and costs
The Fund’s management fee will remain at 0.90% p.a.
However, we estimate that the Fund will incur additional, one-off transaction costs of 0.12% (including brokerage, taxes and fees) as a result of Barrow Hanley’s appointment.
About Barrow Hanley
Based in Dallas, Texas (USA), Barrow Hanley is a diversified investment manager offering value-focused strategies spanning global equities and fixed income. With more than AUD$69 billion in assets under management as at 30 June 2023, Barrow Hanley has been providing quality client outcomes for more than 40 years.
Portfolio Manager Brad Kinkelaar will manage the Fund. Brad has more than 27 years’ industry experience and joined Barrow Hanley in 2017.
What do you need to do?
No action is required. You will be able to continue to invest or withdraw from the Fund in the same way.
An updated PDS reflecting the proposed appointment of Barrow Hanley and outlining the above changes, is available on www.pendalgroup.com. If you would like a hard copy of the PDS, please contact Pendal Customer Relations.
If you have any questions about your investment or would like further information regarding the changes, please contact us on 1300 346 821 (for Australian investors) or +612 9220 2499 (for overseas investors) from Monday to Friday, 8.00am to 5:30pm (Sydney time).
For any questions regarding how these changes may impact your own financial situation, we recommend that you speak to your financial advisor and/or tax accountant.
We are notifying you of some important changes relating to the Pendal Concentrated Global Share Fund (Fund).
Following a strategic review of our global equity investment capabilities, we have decided to appoint Barrow, Hanley, Mewhinney & Strauss, LLC (Barrow Hanley) as the Fund’s delegated investment manager. As the Fund’s delegated investment manager, Barrow Hanley will have responsibility for the day-to-day investment management of the Fund.
Barrow Hanley’s appointment will take effect from 31 October 2023.
Pendal Institutional Limited (Pendal) will continue to act as the investment manager of the Fund.
Why are we making the change?
As part of the broader Perpetual Group, we want to ensure our clients have exposure to competitive and differentiated strategies which utilise the investment management capabilities that we believe are best placed to meet the investment objectives of the Fund and are likely to deliver the best outcomes for investors, over the medium to long term.
Barrow Hanley, who are also part of the Perpetual Group, has a quality investment process, an experienced well-resourced team of more than 50 investment professionals, scale and depth of research and an aligned investment style to Pendal. As a result, we consider that Barrow Hanley is better placed to meet the Fund’s investment objectives, over the medium to long term.
What is changing?
Fund name
Effective on or around 31 October 2023, the Fund’s name will change (as set out below) to reflect the appointment of Barrow Hanley as the Fund’s delegated investment manager:
| Current Name | New Name |
| Pendal Concentrated Global Share Fund | Barrow Hanley Concentrated Global Share Fund |
Investment related changes
While the Fund will continue to operate in the same way, there will be some changes to the way the Fund is managed.
Effective from 31 October 2023, these changes include:
- Minimum and maximum number of stocks
The Fund will remain a concentrated portfolio of global shares. However, the minimum and maximum number of stocks held by the Fund will reduce from 35 – 55 stocks to 25 – 40 stocks.
- Asset allocation ranges
The Fund’s asset allocation ranges will change as follows:
| Current Asset Allocation Ranges | New Asset Allocation Ranges |
| • Global Shares 80-100% • Cash 0-20% | • Global Shares 90-100% • Cash 0-10% |
- Emerging markets exposure
The Fund will continue to primarily invest in companies domiciled in developed markets and a 20% maximum limit will be introduced for the Fund’s allocation to emerging markets.
- Labour, Environmental, Social and Ethical Considerations
Like Pendal, Barrow Hanley’s investment approach considers labour standards, environmental, social and ethical (ESG) risks to the extent that they are relevant to the current or future valuation of a stock, although Barrow Hanley’s investment approach does not consider ethical or moral judgements.
Effective from 31 October 2023, the Fund will no longer screen for companies involved in the following activities:
- uranium mining for the purpose of nuclear power generation;
- manufacture, ownership or operation of gambling facilities, gaming services or other forms of wagering;
- mining of thermal coal;
- factory animal farming; and
- weapons systems, components and support systems and services.
The Fund, however, will continue to screen for tobacco production and will not invest in companies that are directly involved in tobacco production, where tobacco production accounts for 10% or more of a company’s gross revenue.
- Buy-sell Spread
Effective from 31 October 2023, the Fund’s buy-sell spread will decrease from 0.40% (0.20% buy/0.20% sell) to 0.25% (0.15% buy/0.10% sell), reflecting lower brokerage costs that are expected to be incurred by the Fund following the appointment of Barrow Hanley.
What will stay the same?
Like Pendal, Barrow Hanley’s investment process for global shares strives to achieve the Fund’s investment objectives by adopting a bottom-up investment approach focused on in-depth fundamental company research to identify companies that temporarily trade below their intrinsic value and offer long term capital growth. Like Pendal, Barrow Hanley also applies a benchmark agnostic and high conviction approach to investing.
The Fund’s benchmark will continue to be the MSCI World ex Australia (Standard) Index (Net Dividends) in AUD and the Fund will still aim to provide a return (before fees, costs and taxes) that exceeds its benchmark over the medium to long term.
Fees and costs
The Fund’s management fee will remain at 0.90% p.a.
However, we estimate that the Fund will incur additional, one-off transaction costs of 0.12% (including brokerage, taxes and fees) as a result of Barrow Hanley’s appointment.
About Barrow Hanley
Based in Dallas, Texas (USA), Barrow Hanley is a diversified investment manager offering value-focused strategies spanning global equities and fixed income. With more than AUD$69 billion in assets under management as at 30 June 2023, Barrow Hanley has been providing quality client outcomes for more than 40 years.
Portfolio Manager Brad Kinkelaar will manage the Fund. Brad has more than 27 years’ industry experience and joined Barrow Hanley in 2017.
What do you need to do?
No action is required. You will be able to continue to invest or withdraw from the Fund in the same way.
An updated PDS reflecting the proposed appointment of Barrow Hanley and outlining the above changes, is available on www.pendalgroup.com. If you would like a hard copy of the PDS, please contact Pendal Customer Relations.
If you have any questions about your investment or would like further information regarding the changes, please contact us on 1300 346 821 (for Australian investors) or +612 9220 2499 (for overseas investors) from Monday to Friday, 8.00am to 5:30pm (Sydney time).
For any questions regarding how these changes may impact your own financial situation, we recommend that you speak to your financial advisor and/or tax accountant.