Managed Funds

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Global Bond Funds May 2017

Global fixed interest May performance

The median 1 month performance in the YieldReport survey of global bond funds was 0.60% (previously 0.70%) and the median return over the last 12 months was 3.21% (previously 3.55%). May was almost as favourable as April proved to be; bond yields dropped and the Aussie dollar was weaker against all other major currencies. Accordingly 43 of 45 funds in the YieldReport survey finished the month with a positive return.

Bond yields initially rose in the lead up to FOMC’s May meeting but this trend was soon reversed and yields then fell. European bond yields fell as the ECB squashed any suggestion of a plan to cut back on its bond-purchasing programme. In the second half of the month, U.S data were somewhat on the soft side and U.S politics provided little incentive for markets to expect anything fiscally expansionary, all of which was supportive of lower yields. By the end of the month, U.S. yields at the front of the curve rose a little on the back of hawkish comments which had emanated from the FOMC’s meeting but at the long end yields fell.  The 2 year yield rose 1bp to 1.28% while 10 year bond yields fell 7bps to 2.21%. and the 10 year bond yield fell 7bps.

10 year bond yields were consistently lower in all the major markets, except in Japan where they are anchored close to zero. German yields inched 2bps down to 0.30%, U.K. yields fell 4bps to 1.05%, U.S yields were 7bps lower at 2.21%, Italian yields fell 10bps to 2.18% and French yields dropped 11bps to 0.72%.

The best performing global fund for May in the YieldReport survey was the Legg Mason Western Asset Macro Opportunities Bond Fund. Its return of 1.45% follows an April performance almost as impressive. The second-highest return was produced by stablemate Legg Mason Western Asset Global Bond Fund which returned 1.41% and in third was the DDH Global Fixed Interest Alpha fund with a return of 1.15%.

Over the twelve months to May 2017, the Bentham Wholesale High Yield fund retained its top spot with a return of 14.41%. The fund has slightly increased its holdings of high yield bonds from around 93% at the end of April to just over 95% at the end of May. The rest of the portfolio comprises cash and derivatives.

GLOBAL BOND FUNDS

GLOBAL BOND FUNDSASX
mFund
1m (%)3m (%)1y (%)3y (%)5y (%)
Advance Australian Fixed Interest Multi-Blend Fund0.601.382.002.784.09
Alpha Diversified IncomemFund0.501.152.603.153.05
AMP Future Directions International Bond Fund0.691.462.313.704.46
AMP Capital International Bond0.741.582.834.235.02
ANZ-CFS Global Credit Income EF0.100.735.182.464.42
Bentham Professional Global IncomemFund0.701.6310.624.758.76
Bentham Wholesale High YieldmFund0.992.4514.416.649.37
Bentham Syndicated Loan ASX ClassmFund0.731.9110.936.097.92
Kapstream Wholesale Absolute Return IncomemFund0.360.903.153.184.20
BlackRock Monthly Income0.661.136.413.477.60
BlackRock Wholesale International Bond0.601.542.935.015.78
BT Global Fixed Interest Wholesale0.581.280.744.874.66
BT Institutional Enhanced Global Fixed Interest0.611.330.914.344.39
CFS Wholesale Global Bond0.501.040.534.274.61
CFS Wholesale Global Corporate Bond1.021.795.805.387.11
DDH Global Fixed Interest Alpha1.151.164.90-0.052.73
Dimensional Five-Year Diversified Fixed Interest0.411.152.773.954.20
Dimensional Global Bond Trust0.711.623.975.76
Dimensional Two-Year Diversified Fixed Interest0.230.732.332.582.94
Fidelity Global Strategic Bond0.06-0.444.63
Franklin Templeton Global Aggregate Bd W0.982.250.044.50
Franklin Templeton Multisector Bond I-1.121.2610.412.097.37
GAM Absolute Return Bond (AU)0.681.828.672.734.11
Invesco Wholesale Senior Secured IncomemFund0.430.928.104.994.23
Legg Mason Brandywine Global Opp Fixed Income AmFund0.421.687.365.117.04
Legg Mason Brandywine Global Fixed Income A0.411.425.645.917.02
Legg Mason Western Asset Global Bond Fund1.413.23
Legg Mason Western Asset Macro Opportunities Bond Fund1.454.52
Macquarie Global Bond0.481.020.654.694.72
Macquarie Global Income Opportunities Fd0.551.635.253.044.19
Mercer Global Credit Fund0.981.794.265.136.61
Mercer Global Sovereign Bond Fund0.852.133.006.396.14
Nikko AM International Bond0.561.051.955.175.54
Omega Global Corporate Bond0.821.643.424.525.28
PIMCO Global Bond WholesalemFund0.711.615.636.206.49
PIMCO Global Credi WholesalemFund0.872.064.785.535.92
PIMCO Diversified Fixed Interest WholesalemFund0.891.954.095.465.43
PIMCO Unconstrained Bond WholesalemFund0.411.407.623.69N/A
State Street SSgA Global Fixed Income0.541.161.284.412.42
T.Rowe Price Dynamic Global Bond Fund0.15-0.592.994.75
Templeton Global Bond Plus W-1.190.748.051.315.05
UBS Global Credit Fund1.011.995.805.356.51
UBS International Bond0.711.472.345.025.22
Vanguard International Credit Securities Index Hdg0.901.794.345.065.71
Vanguard International Fixed Interest Index Hdg0.491.091.315.265.22

*End of May 2017. Returns in AUD after fees.

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