Bond Indice performance August


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Bond markets were very volatile during August as China’s equity market plunge rattled world markets. Equity markets experienced their worst month since the GFC. Bonds were the beneficiary of the volatility although initial bond market rallies were reversed as we moved towards the end of the month. The yield curve steepened as 3y bonds rallied 14bps to 1.77 and 10y bonds rallied 11bps to 2.69%. Government bonds were the best performer with the index returning 0.741% followed by the composite bond index returning 0.637%. The corporate bond index returned 0.543%just shading the semi government bond index with 0.504%. The FRN index failed to beat the bank bill index with 0.181% against 0.185%. Over the past 12 months the major bond categories have returned between 6.25% and 6.50% as can be seen in the chart below.


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Security1m Return (%)12m Rolling Return (%)
Bank Bill0.1812.51
Composite Bond0.6376.29
Government Bond0.7416.55
Semi-Govt Bond0.5046.50
Corporate Bond0.5435.68