The 10-year Australian Treasury bond yield moved about 10bps higher in the early part of July but then reversed course to be back to its starting point by the middle of the month. It then trading sideways in a 10bps band until it plunged on the last day of July. By this point, the 3-year ACGB yield had shed 33bps to 3.72%, the 10-year yield had lost 20bps to 4.12% while the 20-year yield finished 10bps lower at 4.51%.
As a result, conditions facing fund managers in July became even more favourable than those of June. The Bloomberg Ausbond Corporate Bond Index was the best performer after it returned 1.56% for the month. The Composite Index, representing a mix of federal, state and corporate bonds and the Treasury Index, representing Commonwealth bonds, both produced the second-highest return of 1.48%. The Semi-Government Index was not far behind with a return of 1.46% while the FRN Index returned 0.52%.
All 32 funds in the YieldReport survey for this segment produced positive results and the month’s median return was 1.48%.
The UBS Australian Bond Fund produced a return of 2.02%, making it the highest returning fund for the month. The Yarra (formerly Nikko AM) Australian Bond Fund was next with a return of 1.91% while the Henderson Australian Fixed Interest Fund was third with a return of 1.79%.
On a 12-month basis, Realm’s High Income Fund retained the title of highest performing fund in this segment. The fund returned 10.68% while the next-highest return came from Realm’s Strategic Income Fund with a return of 10.54%. The Alexander Credit Opportunities Fund retained third place after it produced a 12-month return of 8.95%.
| FUND NAME | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 1.48 | 2.67 | 4.47 | -2.94 | -1.18 | |
| AMP Capital Corporate Bond | ACA02 | 0.61 | 1.54 | 5.00 | 2.34 | 2.38 |
| Alexander Credit Opportunities | 0.75 | 2.10 | 8.95 | 6.78 | 5.77 | |
| AMP Flex Lifetime S2-AMP Australian Bond | 1.41 | 2.65 | 4.50 | -2.89 | -1.05 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 1.43 | 2.53 | 4.07 | -2.92 | -1.40 | |
| Altius Sustainable Bond | 1.09 | 2.33 | 5.16 | 0.87 | 0.68 | |
| Artesian Corporate Bond | 0.92 | 2.12 | 8.11 | 3.32 | 3.01 | |
| Pendal Enhanced Credit (Wholesale) | 1.50 | 2.60 | 6.87 | 0.05 | 1.15 | |
| Pendal Fixed Interest (Wholesale) | 1.57 | 2.68 | 4.74 | -2.19 | -0.47 | |
| Pendal Government Bond | 1.56 | 2.64 | 4.49 | -2.35 | -0.57 | |
| CFS Aberdeen Australian Fixed Interest | 1.52 | 2.76 | 5.05 | -2.32 | -0.85 | |
| CFS Wholesale Australian Bond | 1.46 | 2.77 | 5.12 | -2.04 | -0.33 | |
| DDH Fixed Interest | 1.58 | 2.78 | 5.07 | -2.17 | -0.36 | |
| Spectrum Strategic Income | SPE01 | 0.63 | 1.72 | 6.62 | 3.34 | 2.72 |
| Jamieson Coote Bonds Active | 1.59 | 2.67 | 3.87 | -3.03 | -1.15 | |
| Legg Mason Western Asset Australian Bond | LMA04 | 1.64 | 3.00 | 5.44 | -2.00 | -0.30 |
| Macquarie Australian Fixed Interest | 1.48 | 2.82 | 5.17 | -1.88 | -0.21 | |
| Mercer Australian Sovereign Bond | 1.56 | 2.64 | 4.08 | -2.86 | -1.12 | |
| MLC Wholesale Horizon 1 Bond Portfolio | 0.94 | 2.08 | 6.83 | 2.32 | 1.81 | |
| Yarra Australian Bond | 1.91 | 2.97 | 5.36 | -1.95 | -0.28 | |
| Henderson Australian Fixed Interest (Inst) | 1.79 | 3.24 | 5.82 | -2.09 | 0.03 | |
| Henderson Tactical Income | 1.05 | 2.11 | 6.36 | 2.55 | 2.49 | |
| Perpetual WFIA-Schroder Fixed Income | 1.71 | 2.93 | 5.86 | -2.60 | -0.62 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 1.48 | 2.51 | 4.22 | -2.51 | -1.11 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 1.57 | 2.83 | 5.36 | -2.07 | -0.41 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.93 | 2.45 | 5.94 | 0.11 | 0.78 |
| Realm High Income (Wholesale) | 0.86 | 2.49 | 10.68 | 5.78 | 5.30 | |
| Realm Strategic Income - Enduring Units | 0.75 | 2.39 | 10.54 | 8.17 | n/a | |
| SSgA Australian Fixed Income | 1.47 | 2.64 | 4.67 | -2.26 | -0.62 | |
| UBS Australian Bond | 2.02 | 3.46 | 6.04 | -1.88 | -0.40 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 1.54 | 2.63 | 4.50 | -2.33 | -0.69 |
| Vanguard Australian Govt Bond Index | 1.47 | 2.63 | 4.07 | -2.83 | -1.04 | |
| Bloomberg AusBond Composite 0+YR AUD | 1.48 | 2.67 | 4.67 | -2.15 | -0.49 |
*End of July 2024. Return in AUD after fees