April 2015

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Managed global bond funds were hard hit by the sharp spike in European bonds with many funds reporting negative returns for the month. The honour of best performer for April was shared between two Equity Trustees funds: the GAM Absolute Return Bond (AU) fund and the T. Rowe Price Dynamic Global Bond fund, both returning 1.50% for the month. The 12 month performance of both funds was therefore -0.77% and 4.38% respectively.
The GAM Absolute Return Bond (AU) fund aims to provide positive absolute returns over the medium term of the 3m BBSW plus 3-6% p.a. net of fees and expenses. It invests in the fully hedged AUD income class of the GAM Absolute Return Bond Master Fund. The master fund invests worldwide in bonds of varying maturities, credit ratings, and currencies that are issued in various countries, as well as in derivatives.
T. Rowe Price Dynamic Global Bond fund seeks to deliver a 2% return over the Bloomberg AusBond Bank Bill Index on an annual basis over a three- to five-year investment horizon, with income distributions paid quarterly.
In April the portfolio’s sensitivity to rising interest rates resulting from bond positioning was 0.26 years. The largest bond allocations in percentage terms are government bonds from Romania, Mexico and US inflation-linked government bonds. The portfolio also holds tactical allocations across a broad range of attractive sovereign markets, including Israel, Cyprus, Japan, Serbia, the Philippines, Iceland, China, Thailand, Brazil, and Malaysia. It also holds inflation-linked government bonds in Japan, Italy and Brazil. The fund holds an allocation of around 18% in investment-grade corporate bonds across the financial, industrial, and utility sectors. The fund also holds an allocation to high yield corporate bonds and securitized bonds. The fund is around 97% hedged back to the AUD.

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Managed Global Bond

GLOBAL BOND FUNDS1m (%) 3m (%) 1y (%) 3y (%) 5y (%)
Aberdeen Global Government Bond 16-0.81-0.668.766.246.88
Advance Int Fix Intr Multi-Blend 4-0.61-0.036.635.966.55
AMP Capital FD Intl Bond A 3-0.36-0.777.1766.6
AMP Capital International Bond 4-0.32-0.647.726.586.98
ANZ OA IP-CFS Global Credit Income EF 170.411.612.165.274.94
Bentham W/S Global Income 10.982.63.9810.84 9.86
Bentham W/S High Yield 211.214.125.6510.46 12.02
BlackRock Monthly Income C 170.591.744.039.787.63
BlackRock WS International Bond 7-0.490.28.377.57.93
BT Global Fixed Interest WS 16-1.53-1.1710.746.867.19
BT Institutional Enhanced Gbl Fixed Int 16-1.51-1.1210.937.027.99
CFS Wholesale Global Bond 15-0.61-0.217.666.266.53
CFS Wholesale Global Corporate Bond 4-0.250.367.798.8510.01
DDH Global Fixed Interest Alpha 171.032.11-2.753.941.84
Dimensional Five-Year Diversified F/I0.10.295.524.936.54
Dimensional Global Bond Trust 4-0.47-0.419.116.70
Dimensional Two-Year Diversified F/I0.150.612.923.324.22
Fidelity Global Strategic Bond 40.161.887.3200
Franklin Templeton Global Aggregate Bd W 4-1.44-0.7711.1500
Franklin Templeton Multisector Bond I 111.32.023.988.439.55
GAM Absolute Return Bond (AU) 121.51.8-0.773.15.06
Ibbotson Dynamic Defensive Trust 19 n/an/a n/a n/a n/a 
Legg Mason Brandywine Glbl Opp Fix Inc A 15-1.03-0.6313.6911.460
Legg Mason Brandywine Global Fixed Inc A 15-0.97-0.5915.8811.0811.09
Legg Mason WA Glb Multi Str Bd A0.882.378.427.128
Macquarie Global Bond 13** n/an/a n/a n/a n/a 
Macquarie Global Income Opportunities Fd 170.371.193.035.185.42
Mercer Global Credit Fund 2-0.20.27.998.349.43
Mercer Global Sovereign Bond Fund 16-0.99-0.2211.477.758.31
Nikko AM International Bond 16-0.39-0.089.177.287.27
Omega Global Corporate Bond 17-0.020.476.836.397.37
Omega Global Government Bond 16-0.360.017.724.466.57
PIMCO EQT Wholesale Global Bond B 9 n/an/a n/a n/a n/a 
PIMCO EQT Wholesale Global Credit B 20 n/an/a n/a n/a n/a 
PIMCO EQT Whlsl Diversified Fxd Interest B 1 n/an/a n/a n/a n/a 
PIMCO EQT Whlsl Unconstrained Bond B 17 n/an/a n/a n/a n/a 
Putnam Worldwide Income Fund 17 n/an/a n/a n/a n/a 
SSgA Global Broad Invest Grade Fixed Inc 14-0.380.017.966.37.54
SSgA Global Fixed Income 15-0.56-0.266.92.234.78
T.Rowe Price Dynamic Global Bond Fund1.51.444.3800
Templeton Global Bond Plus W 161.311.944.936.377.02
UBS Global Credit Fund 4-0.33-0.177.887.968.53
UBS International Bond 7-0.390.018.596.667.3
Vanguard International Crdt Secs Idx Hdg 8-0.42-0.127.846.958.11
Vanguard International Fxd Intr Idx Hdg 10 -0.54-0.199.36.857.69
 BENCHMARKS
150% BB AusBond Composite Bond Index /50% BB AusBond Bank Bill Index
260% Barclays Global Aggregate - Corporate Index in $A (Hedged) and 40% Barclays Capital Global Aggregate ex Government ex Treasuries Index ($AUD hedged)
3BarCap Gl Aggregate TR ($AUD hedged)
4Barclays Capital Global Aggregate Bond Index ($AUD Hedged)
5Barclays Capital World Government Inflation-Linked Bond Index ($AUD hedged)
6Barclays Glb Agg Corp ($AUD hedged)
7Barclays Global Aggregate 500 Index ($AUD hedged)
8Barclays Global Aggregate Government-Related and Corporate ($AUD hedged)
9Barclays Global Aggregate Index ($AUD hedged)
10Barclays Global Treasury Index ($AUD hedged)
11Barclays Multiverse Index is the primary benchmark
12Cash Index: AFMA 3-month bank bill swap rate BBSW (Hurdle)
13Citigroup (Customised Benchmark) M1 Global ex-Australia hedged to Australian dollars Index
14Citigroup World Broad Investment Grade ex-Australia Index ($AUD hedged)
15Citigroup World Government Bond Index ex Australia ($AUD hedged)
16JP Morgan Global Government Bond Index ($AUD hedged)
17BB AusBond Australia Bank Bill Index
18Credit Suisse Leverage Loan Index ($AUD hedged)
19Consumer Price Index increases by at least 0.5%
20BB AusBond Composite Bond Index
21Merrill Lynch High Yield Cash Pay Constrained ($AUD hedged)
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*End of April 2015. Returns in AUD after Fees.
Underlined Funds can be applied for and redeemed via the ASX mFund platform