The 10-year Australian Treasury bond yield declined for the first couple of days in August before plunging about 20bps in a day and then bouncing back over the next two days. Yields then declined through to the middle of the month, closing to the month’s low which had been hit in the previous week. From there, yields trended sideways in a 10bps range through to the end of the month. By this point, the 3-year ACGB yield had shed 18bps to 3.54 while 10-year and 20-year yields both finished 15bps lower at 3.97% and 4.36% respectively.
As a result, conditions facing fund managers in August remained favourable. The Bloomberg Ausbond Semi-Government Index was the best performer after it returned 1.48% for the month. The Composite Index, representing a mix of federal, state and corporate bonds produced the second-highest return of 1.21% while the Treasury Index, representing Commonwealth bonds, was next with a return of 1.16%. The Corporate Bond Index ranked fourth after it produced a return of 0.93% while the FRN Index returned 0.43%.
All 32 funds in the YieldReport survey for this segment produced positive results and the month’s median return was 1.16%.
The UBS Australian Bond Fund produced a return of 1.48%, making it the highest returning fund for a second consecutive month. The Yarra (formerly Nikko AM) Australian Bond Fund was next (again) with a return of 1.44% while the Henderson Australian Fixed Interest Fund was third (again) with a return of 1.39%.
On a 12-month basis, Realm’s High Income Fund retained the title of highest performing fund in this segment. The fund returned 11.07% while the next-highest return came from Realm’s Strategic Income Fund with a return of 10.51%. The Alexander Credit Opportunities Fund retained third place after it produced a 12-month return of 9.12%.
| FUND NAME | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 1.21 | 3.55 | 4.84 | -2.53 | -1.20 | |
| AMP Capital Corporate Bond | ACA02 | 0.57 | 1.61 | 5.27 | 2.52 | 2.47 |
| Alexander Credit Opportunities | 0.84 | 2.27 | 9.12 | 6.94 | 5.84 | |
| AMP Flex Lifetime S2-AMP Australian Bond | 1.21 | 3.49 | 4.87 | -2.50 | -1.11 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 1.16 | 3.36 | 4.56 | -2.54 | -1.45 | |
| Altius Sustainable Bond | 0.80 | 2.70 | 5.30 | 1.23 | 0.68 | |
| Artesian Corporate Bond | 0.37 | 1.74 | 7.58 | 3.44 | 3.06 | |
| Pendal Enhanced Credit (Wholesale) | 0.90 | 2.80 | 6.71 | 0.35 | 1.16 | |
| Pendal Fixed Interest (Wholesale) | 1.30 | 3.60 | 5.30 | -1.80 | -0.56 | |
| Pendal Government Bond | 1.37 | 3.74 | 5.13 | -1.94 | -0.64 | |
| CFS Aberdeen Australian Fixed Interest | 1.17 | 3.42 | 5.57 | -1.95 | -0.87 | |
| CFS Wholesale Australian Bond | 1.16 | 2.44 | 9.03 | 4.13 | 3.24 | |
| DDH Fixed Interest | 1.17 | 3.59 | 5.40 | -1.81 | -0.43 | |
| Spectrum Strategic Income | SPE01 | 0.49 | 1.58 | 6.49 | 3.46 | 2.78 |
| Jamieson Coote Bonds Active | 1.13 | 3.44 | 4.40 | -2.73 | -1.30 | |
| Legg Mason Western Asset Australian Bond | LMA04 | 1.24 | 3.77 | 5.84 | -1.61 | -0.35 |
| Macquarie Australian Fixed Interest | 1.24 | 3.63 | 5.54 | -1.51 | -0.27 | |
| Mercer Australian Sovereign Bond | 1.10 | 3.41 | 4.59 | -2.57 | -1.30 | |
| MLC Wholesale Horizon 1 Bond Portfolio | 0.99 | 2.40 | 7.37 | 2.67 | 1.98 | |
| Yarra Australian Bond | 1.44 | 4.07 | 5.87 | -1.49 | -0.29 | |
| Henderson Australian Fixed Interest (Inst) | 1.39 | 4.18 | 6.16 | -1.64 | 0.08 | |
| Henderson Tactical Income | 0.83 | 2.45 | 6.41 | 2.87 | 2.66 | |
| Perpetual WFIA-Schroder Fixed Income | 1.14 | 3.66 | 6.26 | -2.27 | -0.71 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 1.16 | 3.41 | 4.73 | -2.13 | -1.16 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 1.18 | 3.47 | 5.86 | -1.68 | -0.40 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.62 | 2.30 | 6.11 | 0.37 | 0.76 |
| Realm High Income (Wholesale) | 0.64 | 2.04 | 11.07 | 5.93 | 5.37 | |
| Realm Strategic Income - Enduring Units | 0.80 | 2.37 | 10.51 | 8.24 | n/a | |
| SSgA Australian Fixed Income | 1.20 | 3.47 | 5.17 | -1.89 | -0.68 | |
| UBS Australian Bond | 1.48 | 4.49 | 6.54 | -1.42 | -0.41 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 1.19 | 3.53 | 5.00 | -1.95 | -0.75 |
| Vanguard Australian Govt Bond Index | 1.26 | 3.59 | 4.66 | -2.45 | -1.12 | |
| Bloomberg AusBond Composite 0+YR AUD | 1.21 | 3.50 | 5.15 | -1.79 | -0.55 |
*End of August 2024. Return in AUD after fees