In Australia, the 10-year Treasury bond yield trended upwards across the month, with larger rises in the last week. By the end of it, the 3-year ACGB yield had shot up by 27bps to 0.48%, the 10-year yield had jumped 38bps to 1.52% while the 20-year yield finished 39bps higher at 2.16%.
Accordingly, conditions facing fund managers were demanding and the various benchmark indices reflected this. The FRN Index was the best performer after it returned -0.06% for the month. The Corporate Bond Index produced the second-highest return, -0.79% and the Semi-Government Index was next with a return of -1.40%. The Composite Index, representing a mix of federal, state and corporate bonds, returned -1.52 and the Treasury Index, representing Commonwealth bonds, returned -1.80%.
Only six out of 33 managers in the YieldReport survey produced positive results. The month’s median return was -1.50%.
The Alexander Credit Opportunities Fund produced a return of 0.37%, thus making it the highest performing fund in the September survey. The Realm Strategic Income (2018-1 units) Fund returned 0.32%, making it the second-best performer while the Henderson Tactical Income Fund took third place with a return of 0.18%.
On a 12-month basis, the Alexander Credit Opportunities Fund retained its title as the highest performing fund in September. The Alexander fund returned 6.20% over the 12 months to the end of September while the next highest return again came from the Realm Strategic Income (2018-1 units) Fund with a return of 5.11%. Realm’s High Income (Wholesale) Fund had the third-highest 12-month performance with a return of 4.33%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -1.52 | 0.10 | -1.74 | 3.19 | 1.95 | |
| AMP Capital Corporate Bond | ACA02 | 0.06 | 0.21 | 2.82 | 2.56 | 2.79 |
| Alexander Credit Opportunities Fund | 0.37 | 1.22 | 6.20 | 4.69 | 5.20 | |
| Alpha Enhanced Yield | IWM05 | -0.09 | -0.26 | 4.32 | 0.66 | 0.70 |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.55 | 0.23 | -1.48 | 3.68 | 2.42 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.59 | 0.05 | -2.65 | 2.90 | 1.87 | |
| Altius Bond Fund | -0.23 | 0.20 | -1.32 | 1.43 | 1.55 | |
| Artesian Corporate Bond Fund | -0.01 | 0.16 | 2.94 | 2.98 | n/a | |
| Pendal Enhanced Credit (Wholesale) | -0.80 | 0.37 | 0.83 | 4.15 | 3.48 | |
| BT Fixed Interest Retail | -1.44 | 0.16 | -1.99 | 3.20 | 1.98 | |
| Pendal Fixed Interest (Wholesale) | -1.57 | 0.30 | -2.35 | 3.89 | 2.66 | |
| Pendal Government Bond | -1.67 | 0.28 | -2.10 | 4.37 | 3.00 | |
| CFS Aberdeen Australian Fixed Interest | -1.53 | 0.11 | -1.57 | 3.07 | 1.92 | |
| CFS Wholesale Australian Bond | -1.50 | 0.16 | -1.83 | 4.23 | 2.79 | |
| DDH Fixed Interest | -1.50 | 0.21 | -1.13 | 4.17 | 2.97 | |
| Spectrum Strategic Income | SPE01 | 0.05 | 0.34 | 2.60 | 2.70 | 3.41 |
| Jamieson Coote Bonds Active | -1.79 | 0.23 | -2.62 | 4.17 | n/a | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.48 | 0.29 | -1.20 | 4.30 | 3.28 |
| Macquarie Australian Fixed Interest | -1.41 | 0.42 | -1.32 | 4.36 | 3.20 | |
| Mercer Australian Sovereign Bond Fund | -1.79 | 0.29 | -2.70 | 4.26 | 2.93 | |
| Nikko AM Australian Bond | -1.50 | 0.28 | -1.44 | 4.34 | 3.21 | |
| Henderson Australian Fixed Interest (Inst) | -1.34 | 0.53 | -0.44 | 4.68 | 3.50 | |
| Henderson Tactical Income | 0.18 | 0.23 | 1.27 | 2.62 | 2.61 | |
| Perpetual WFIA-Schroder Fixed Income | -1.66 | 0.09 | -0.45 | 3.97 | 2.57 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.55 | 0.20 | -1.95 | 3.05 | 1.88 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.51 | 0.14 | -0.97 | 3.98 | 2.91 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -0.89 | -0.15 | -0.72 | 2.86 | 2.42 |
| Realm High Income (Wholesale) | 0.10 | 0.84 | 4.33 | 4.58 | 4.32 | |
| Realm Strategic Income (2018-1) | 0.32 | 1.23 | 5.11 | 6.46 | n/a | |
| SSgA Australian Fixed Income | -1.52 | 0.29 | -1.71 | 4.00 | 2.92 | |
| UBS Australian Bond Fund | -1.49 | 0.25 | -1.56 | 3.88 | 2.99 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.54 | 0.28 | -1.67 | 3.93 | 2.83 |
| Vanguard Australian Govt Bond Index | -1.69 | 0.28 | -2.25 | 4.04 | 2.74 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.51 | 0.31 | -1.54 | 4.13 | 3.06 |
*End of September 2021. Return in AUD after fees