Australian Bond Funds December 2015


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Australian Fixed Interest December Performance
Global bond yields generally rose through December as the FOMC’s mid-December meeting approached and then they were reasonably steady for the rest of the month. US 10 year bond yields rose 6bps over their end of November yields to 2.27%, which was mild in comparison with the rise in European yields which typically rose between 13bps (U.K) and 27bps (Italy).

Australian 10 year bonds went the other way, along with Japanese bond yields. Over the month, the yield on Australian bonds fell from 2.86% to 2.81%. The benchmark Bloomberg AusBond Composite (0+ years) bond index returned 0.33% for the month, clawing back a part of November’s loss, to produce a 12 month rolling return of 2.59%.

Spectrum’s Strategic Income Fund, which outperformed the benchmark in November (ranked 7 out of 34 funds in the survey) was the December survey’s top performer, returning 0.46% for the month, which is more than double the average return (0.22%) of the other funds. The Strategic Income Fund also had a solid 12 months, returning 3.31%, beating the benchmark by over 0.70% and comfortably in excess of the average funds 12 month return of 2.03%.

The Strategic Income Fund holds a diversified portfolio of debt and hybrid securities from government bodies, corporations and, to a limited extent, specialist financing vehicles, with limits placed security type, credit risk, industry and issuers in order to maintain portfolio diversity. Its 5 year performance is about 0.5% per annum more than the benchmark and about 1.25% more than the average of funds in the survey.

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AUSTRALIAN FIXED INTEREST1m (%)3m (%)1y (%)3y (%)5y (%)
Aberdeen Australian Fixed Income0.35-0.252.624.586.40
Advance Aus Fixed Intr Multi-Blend0.19-0.630.913.254.72
AMP Capital Corporate Bond0.
Alpha Enhanced Yield-0.730.55-1.272.303.37
AMP FLI S2-AMP Australian Bond0.21-0.740.994.016.18
AMP Gen-BlackRock Aust Fixed Int Ind0.24-0.511.453.525.40
Altius Bond0.330.481.763.490.00
BT Enhanced Credit WS0.15-0.142.714.946.88
BT Fixed Interest Retail0.09-0.780.763.335.34
BT Fixed Interest WS-0.32-1.391.574.546.55
BT Government Bond0.20-0.661.634.366.49
CFS FC Inv-Aberdeen Aus Fixed Inc0.25-0.521.503.395.24
CFS FC W Inv-CFS W Australian Bondn/an/an/an/an/a
DDH Fixed Interest0.34-
Spectrum Strategic Income Fund0.460.643.315.797.15
Jamieson Coote Bonds Active0.240.314.29
Legg Mason Western Asset Australian Bond Trust A0.27-0.232.595.207.26
Macquarie Australian Fixed Interest0.37-0.323.944.706.87
Mercer Australian Sovereign Bond Fund0.42-0.622.194.306.18
Nikko AM Australian Bond0.29-0.422.164.686.34
OnePath OA FR IP-Optimix Aus Fixed Int0.31-0.151.734.156.06
Henderson Australian Fixed Interest inst0.320.002.734.956.88
Henderson Australian Fixed Interest0.320.002.644.846.78
Henderson Tactical Income0.250.622.594.035.27
Perpetual WFIA-Schroder Fixed Income0.34-0.190.442.994.99
Perpetual WFIA-Vanguard Aust FI Idx0.10-0.621.193.375.19
PIMCO EQT Wholesale Australian Bond B0.380.112.794.606.75
PIMCO EQT Wholesale Australian Focus B0.260.262.313.475.07
SSgA Australian Fixed Income0.34-0.252.404.526.41
UBS Australian Bond0.26-0.342.134.406.29
Vanguard Australian Fixed Interest Index0.19-0.372.264.496.38
Vanguard Australian Govt Bond Index0.35-0.382.254.426.39
Bloomberg AusBond Composite 0+Y TR AUD0.33-0.252.594.736.62

*End of December 2015. Return in AUD after fees
Underlined funds can be applied for and redeemed via the ASX mFund platform