The Point: Professional investing in Australia with PendalThe Point: Professional investing in Australia with Pendal

Amy Xie Patrick: Prepare for likely recession with long-duration bonds

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An economic recession is highly likely in 2023, says Pendal’s head of income strategies Amy Xie Patrick. How should investors respond?


We think an economic recession is highly, highly likely in 2023.

How should investors be positioning their portfolios?

An easy decision is to consider long-duration government bonds, says Amy.

Regardless of whether your view is of a mild or a deep recession, bonds should rally when recessions hit.

This is why being in duration or government bonds should be the crux of your portfolio decision this year.

Compared to the beginning of 2022, government bonds are far more attractive now in terms of the income stream that they can provide, compared to other risky assets like equities.

But it shouldn't be a set-and-forget strategy.

We fear that 2023 will be just as volatile a market environment as 2022.

There will be new fears about whether inflation's really behind us, whether monetary policy tightening is closer to an end or not, and that will drive volatility in both equity and bonds this year.

So putting a larger weight to fixed income and putting it with an actively managed strategy that has proven to be tactical and agile through market volatility will be key.


Find out more about Pendal's fixed income strategies at

Pendal is an independent, global asset manager. Find out more at

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