The former Westpac-owned Pendal Group has been amongst the few investment houses to navigate the COVID-19 pandemic and, at the same time, reward shareholders with a dividend and the secret, according to its chief executive, Emilio Gonzalez is being well diversified and true to label.
What is more he points to advisers leaning on the firm to get a clear picture for their clients about what is happening at the coalface.
“The level of detail they are wanting to relay back is significant,” he said.
Speaking to Money Management following the release of the firm’s half-year result, Gonzalez said that the company’s strategy of diversification across the key risks around asset classes, around style and then around channel and then around different geographies for different reasons.
“The point is that while markets have been quite volatile when you combine our approach together it generates a much more stable revenue stream,” he said.
Gonzalez said that, as with any diversification, it was not fully appreciated until you hit times of need such as that being generated by COVI-19.
“It’s when things get tough that diversification demonstrates its worth,” he said. “We saw that in the March quarter when there was a drop in the market of between 21% and 25% and we were only down 15% for various reasons such as funds under management, the benefit of different currency exposures across our various portfolios and the benefit of the $A going down.”
“Those have always been important parts of our thinking,” Gonzalez said.
He said that where COVID-19 had been concerned, it had been a case of responding but not predicting and in some cases it had been a case of holding ground and remaining true to label on the basis that that was what the clients had brought into.
“Over the next six months there will continue to be elements of uncertainty and elements of market volatility but where we can be agile and change we will, while in other circumstances we will wait for strategies to again play through and have their time in the sun,” Gonzalez said.