Australian Bond Funds August 2021

In Australia, the 10-year Treasury bond yield traded sideways for much of the month, with a week-long dip a little after the middle of the month. By the end of it, the 3-year ACGB yield had shed 2bps to 0.26% while 10-year and 20-year yields had each lost 4bps to 1.14% and 1.77% respectively.

Accordingly, conditions facing fund managers were mildly favourable and the various benchmark indices reflected this. The Treasury Index, representing Commonwealth bonds, was the best performer again after it returned 0.20% for the month. The Composite Index, representing a mix of federal, state and corporate bonds, produced the second-highest return, 0.09%, while the Corporate Bond Index was not far behind it with a return of 0.06%. The FRN Index returned 0.05% and the Semi-Government Index returned -0.12%.

25 out of 33 managers in the YieldReport survey produced positive results. The month’s median return was 0.04%.

Realm’s Strategic Income (2018-1 units) Fund produced a return of 0.52%, thus making it the highest performing fund in the August survey. The Alexander Credit Opportunities Fund returned 0.39%, making it the second-best performer while Realm’s High Income (Wholesale) Fund took third place with a return of 0.22%.

On a 12-month basis, the Alexander Credit Opportunities Fund retained its title as the highest performing fund in August. The Alexander fund returned 6.18% over the 12 months to the end of August while the next highest return again came from the Realm Strategic Income (2018-1 units) Fund with a return of 5.33%. The Realm’s High Income (Wholesale) Fund had the third-highest 12-month performance with a return of 4.78%.

AUSTRALIAN FIXED INTEREST FUNDS

AUSTRALIAN FIXED INTEREST	ASX mFund	1m (%)	3m (%)	1y (%)	3y (%)	5y (%)
Advance Aus Fixed Intr Multi-Blend		-0.04	2.36	0.78	3.54	2.21
AMP Capital Corporate Bond	ACA02	0.04	0.29	2.97	2.62	2.84
Alexander Credit Opportunities Fund		0.39	1.36	6.18	4.68	5.28
Alpha Enhanced Yield	IWM05	-0.09	0.00	4.61	0.84	0.71
AMP Flex Lifetime S2-AMP Australian Bond		-0.02	2.63	1.22	4.04	2.68
AMP Generations BlackRock Aust Fixed Interest Index		0.00	2.25	-0.12	3.30	2.13
Altius Bond Fund		-0.28	0.27	-0.51	1.58	1.62
Artesian Corporate Bond Fund		0.02	0.40	3.09	3.05	n/a
Pendal Enhanced Credit (Wholesale)		0.00	1.40	2.23	4.36	3.65
BT Fixed Interest Retail		0.00	2.36	0.51	3.53	2.21
Pendal Fixed Interest (Wholesale)		0.09	2.54	0.49	4.18	2.92
Pendal Government Bond		0.09	2.87	0.92	4.78	3.27
CFS Aberdeen Australian Fixed Interest		0.04	2.20	1.00	3.40	2.20
CFS Wholesale Australian Bond		0.05	2.19	0.70	4.58	3.07
DDH Fixed Interest		0.06	2.40	1.32	4.55	3.23
Spectrum Strategic Income	SPE01	0.17	0.50	2.77	2.77	3.42
Jamieson Coote Bonds Active		0.18	3.05	0.44	4.61	n/a
Legg Mason Western Asset Australian Bond Trust	LMA04	0.05	2.54	1.37	4.67	3.54
Macquarie Australian Fixed Interest		0.11	2.62	1.25	4.70	3.44
Mercer Australian Sovereign Bond Fund		0.18	3.12	0.45	4.70	3.15
Nikko AM Australian Bond		0.02	2.72	1.27	4.71	3.49
Henderson Australian Fixed Interest (Inst)		0.00	2.80	2.05	5.02	3.74
Henderson Tactical Income		-0.09	0.15	1.28	2.61	2.60
Perpetual WFIA-Schroder Fixed Income		0.13	2.60	2.26	4.38	2.83
Perpetual WFIA-Vanguard Aust Fixed Interest Index		-0.01	2.37	0.42	3.37	2.13
PIMCO Australian Bond (Wholesale)	PMF04	-0.02	2.27	1.57	4.38	3.16
PIMCO Australian Focus (Wholesale)	PMF05	-0.15	1.05	0.78	3.09	2.60
Realm High Income (Wholesale)		0.22	1.33	4.78	4.66	4.35
Realm Strategic Income (2018-1)		0.52	1.19	5.33	6.53	n/a
SSgA Australian Fixed Income		0.06	2.52	0.89	4.38	3.19
UBS Australian Bond Fund		0.05	2.52	1.06	4.25	3.25
Vanguard Australian Fixed Interest Index	UAM04	0.01	2.45	0.79	4.28	3.10
Vanguard Australian Govt Bond Index		0.08	2.72	0.75	4.44	3.03
Bloomberg AusBond Composite 0+YR AUD		0.09	2.55	1.05	4.52	3.33

^{*End of August 2021. Return in AUD after fees}