Conditions facing global fund managers in March were much improved on the tough conditions faced in February. Long-term US Treasury bond yields finished the month modestly lower, as did yields in major euro-zone countries. UK yields fell a little ore substantially. The Aussie dollar was weaker against the US dollar but stronger other major currencies. All bar one of the 30 funds in the YieldReport survey finished the month with a positive return.
The median 1 month performance in the YieldReport survey of global bond funds in March was 0.89% (February: -0.64%) while the median return over the 12 months including March was 3.52% (February: 4.29%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 0.87% over the month and 2.10% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield finished unchanged at 4.62%, the 10-year yield lost 6bps to 4.20% while the 30-year yield finished 4bps lower at 4.34%. BBB corporate spreads tightened modestly.
In other major bond markets, the German 10-year bund yield lost 11bps to 2.30% while the French 10-year OAT yield fell 7bbps to 2.80%. The 10-year UK gilt yield finished the month 19bps lower at 4.03%.
The best performing global fund for the month in the YieldReport March survey was the Bentham Professional Global Income Fund which produced a return of 1.74% for the month. The second-highest return for the month, 1.47%, was produced by the Macquarie Core Australian Fixed Interest Plus Fund while the UBS Global Credit Fund was next with a return of 1.29%.
In terms of fund performance for the twelve months to the end of March, the Bentham Professional Syndicated Loan Fund took over the title as the highest performing fund from sibling Bentham Wholesale High Yield Fund. It produced 12-month return of 11.57% while the Bentham Wholesale High Yield Fund was second with a return of 10.69%. The Invesco Wholesale Senior Secured Income was next with a return of 10.35%.
| GLOBAL BOND FUNDS | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 0.90 | -0.41 | 3.00 | -2.68 | -0.52 | |
| ANZ-CFS Global Credit Income EF | 0.62 | 1.26 | 6.05 | 1.60 | 1.10 | |
| Ardea Real Outcome Fund | -1.11 | -0.49 | -0.73 | 0.67 | 2.72 | |
| Bentham Professional Global Income | mFund | 1.74 | 1.60 | 6.54 | 3.36 | 4.19 |
| Bentham Wholesale High Yield | mFund | 1.16 | 1.46 | 10.69 | 2.00 | 3.01 |
| Bentham Syndicated Loan ASX Class | mFund | 0.65 | 2.61 | 11.57 | 4.48 | 3.76 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.54 | 1.08 | 5.48 | 2.10 | 1.93 |
| CFS Wholesale Global Corporate Bond | 1.20 | -0.39 | 3.95 | -2.65 | 0.70 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.33 | 1.02 | 3.52 | -1.20 | -0.17 | |
| Dimensional Global Bond Trust | 1.16 | -0.14 | 4.47 | -2.60 | -0.20 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.35 | 1.07 | 3.92 | 0.31 | 0.69 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | 0.79 | -0.54 | 2.42 | -2.14 | 0.04 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.63 | 2.08 | 10.35 | 4.34 | 3.98 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | 0.23 | -3.18 | -0.44 | -2.90 | 0.07 |
| Legg Mason Western Asset Global Bond Fund | 0.64 | -1.77 | 1.27 | -3.14 | -0.12 | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | 1.05 | -3.33 | 3.51 | -3.15 | -0.77 | |
| Macquarie Global Income Opportunities Fund | 0.91 | 1.33 | 4.92 | 1.14 | 1.86 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 1.47 | 1.10 | 1.39 | -1.95 | 0.10 | |
| Mercer Global Credit Fund | 1.28 | -0.12 | 3.55 | -2.89 | 0.04 | |
| Mercer Global Sovereign Bond Fund | 0.47 | -0.75 | -0.60 | -2.61 | -0.13 | |
| PIMCO Global Bond (Wholesale) | mFund | 1.24 | 0.29 | 4.22 | -2.16 | 0.42 |
| PIMCO Global Credi (Wholesale) | mFund | 0.99 | -0.21 | 3.29 | -2.50 | 0.02 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 1.25 | 0.79 | 3.31 | -1.72 | 0.33 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 0.87 | 1.24 | 5.69 | -1.13 | 0.78 |
| State Street SSgA Global Fixed Income Trust | 0.74 | -0.70 | 1.03 | -3.59 | -0.96 | |
| T.Rowe Price Dynamic Global Bond Fund | 0.20 | 0.18 | -4.94 | -1.24 | 1.49 | |
| UBS Global Credit Fund | 1.29 | 0.04 | 3.88 | -2.98 | 0.31 | |
| UBS International Bond | 0.93 | -0.36 | 2.08 | -2.65 | -0.28 | |
| Vanguard International Credit Securities Index (Hedged) | 0.99 | -0.39 | 3.48 | -2.85 | -0.15 | |
| Vanguard International Fixed Interest Index (Hedged) | 0.72 | -0.61 | 1.05 | -3.13 | -0.85 |
*End of March 2024. Return in AUD after fees