December, 2020
The Fund returned a positive 0.53% (pre-fee) outperforming the cash benchmark of 0.01%. Both exposure to emerging market sovereign bonds and Australian corporate bonds generated positive returns. Australian physical credit spreads was the biggest contributor with positions in infrastructure and real estate being the primary drivers of return over the month. Expectation that state lockdowns were ending sooner than expected saw a rotation into names that had been hurt by travel restrictions.
On the emerging market side, sovereign spreads rallied strongly in the opening weeks of December on the back of Trump’s stimulus package. Following the announcement, we dialled back credit risk as spreads touched near pre-Covid lows. The portfolio’s duration exposure detracted from excess returns as market yields re-attempted to lift above their short term highs on the back of continued upgrades to growth and inflation. US and Australian 10-year treasuries climbed around seven basis points to 0.91% and 0.97% respectively.
While the reflation theme dominated moves in the opening weeks of December, it lost steam in the latter half as guidance from key central banks reaffirmed their dovish commitments, allowing the portfolio to claw back some performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/163562182.pdfticker: BTA8657AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://investmentcentre.moneymanagement.com.au/factsheets/mi/oy0g/pendal-dynamic-income
Right sidebar -> Quick Links -> Provider’s own factsheet
manager_contact_details: Array
asset_class: Fixed Income
asset_category: Bonds - Australia
peer_benchmark: Fixed Income - Bonds - Australia Index
broad_market_index: Australian Bond Composite 0-10Y Index
structure: Managed Fund
fund_features:
Pendal Dynamic Income aims to provide a return (before fees, costs and taxes) that exceeds the RBA Cash Rate by 2-3% p.a. over the medium term. The Fund is designed for investors who seek income from a portfolio of fixed income securities across a range of market conditions and are prepared to accept some variability of returns. The Fund is an actively managed portfolio that invests primarily in Australian issued investment grade corporate bonds.
- The Fund may also invest in Australian and global credit indices and emerging market sovereign issuers to provide portfolio diversification and enhance returns when we believe market conditions are supportive.
- The Fund also has the ability to decrease its allocation to credit and invest in cash and interest rate duration strategies when we expect volatility to increase.
- Manager Address : Level 14, The Chifley Tower 2 Chifley Square, Sydney NSW 2000, Australia
- Phone : +612 9220 2000
- Website : https://www.pendalgroup.com/
- Contact Email : David.Higgins@pendalgroup.com
- Contact Page : https://www.pendalgroup.com/contact/media-enquiries/