Conditions facing global fund managers in January were challenging. Long-term US Treasury bond yields finished the month moderately higher, as did yields in major euro-zone countries and UK yields. However, the Aussie dollar was weaker against the major currencies with the exception of yen. 13 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 January was 0.13% while the median return over the 12 months including January was 3.12%. The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned -0.44% over the month and 2.43% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield added 8bps to 4.33%, the 10-year yield had gained 15bps to 4.03% while the 30-year yield finished 22bps higher at 4.25%. BBB corporate spreads tightened a little.
In other major bond markets, the German 10-year bund yield gained 24bps to 2.17% while the French 10-year OAT yield rose by 18bps to 2.65%. The 10-year UK gilt yield finished the month 33bps higher at 4.01%.
The best performing global fund for the month in the YieldReport January survey was the Bentham Professional Syndicated Loan Fund which produced a return of 1.22% for the month. The second-highest return for the month, 0.72%, was produced by the Invesco Wholesale Senior Secured Income Fund while the Kapstream Wholesale Absolute Return Income Fund was next with a return of 0.50%.
In terms of fund performance for the twelve months to the end of January, the Bentham Professional Syndicated Loan Fund and the Bentham Wholesale High Yield Fund shared the title as the highest performing fund. They produced 12-month return of 9.95% while the Invesco Wholesale Senior Secured Income was next with a return of 8.88%.
| GLOBAL BOND FUNDS | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | -0.27 | 7.74 | 2.86 | -3.31 | -0.20 | |
| ANZ-CFS Global Credit Income EF | 0.41 | 2.74 | 5.16 | 1.44 | 1.09 | |
| Ardea Real Outcome Fund | -0.07 | -2.03 | 4.35 | 0.99 | 3.29 | |
| Bentham Professional Global Income | mFund | 0.21 | 8.34 | 4.06 | 3.68 | 4.00 |
| Bentham Wholesale High Yield | mFund | 0.15 | 7.78 | 9.95 | 1.73 | 3.26 |
| Bentham Syndicated Loan ASX Class | mFund | 1.22 | 3.58 | 9.96 | 4.24 | 6.24 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.50 | 2.01 | 5.75 | 1.82 | 2.02 |
| CFS Wholesale Global Corporate Bond | -0.20 | 7.91 | 3.55 | -3.50 | 1.22 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.35 | 1.32 | 3.39 | -1.45 | -0.11 | |
| Dimensional Global Bond Trust | -0.25 | 7.32 | 4.32 | -3.75 | 0.30 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.38 | 1.29 | 3.74 | 0.07 | 0.68 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | -0.36 | 5.94 | 2.73 | -3.08 | 0.43 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.72 | 2.69 | 8.88 | 4.39 | 4.02 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | -1.63 | 10.61 | 0.68 | -2.49 | 0.57 |
| Legg Mason Western Asset Global Bond Fund | -0.91 | 7.47 | 2.31 | -3.69 | 0.32 | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | -2.06 | 16.80 | 1.88 | -4.92 | -0.40 | |
| Macquarie Global Income Opportunities Fund | 0.46 | 4.98 | 4.16 | 0.55 | 2.00 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 0.26 | 8.71 | 2.07 | -3.28 | 0.71 | |
| Mercer Global Credit Fund | -0.40 | 7.78 | 2.24 | -3.77 | 0.48 | |
| Mercer Global Sovereign Bond Fund | -0.67 | 3.33 | 0.68 | -3.38 | 0.23 | |
| PIMCO Global Bond (Wholesale) | mFund | -0.28 | 6.46 | 3.22 | -2.88 | 0.63 |
| PIMCO Global Credi (Wholesale) | mFund | -0.18 | 7.21 | 2.60 | -3.04 | 0.38 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | -0.02 | 6.44 | 3.04 | -2.76 | 0.59 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 0.44 | 5.57 | 4.41 | -1.34 | 0.75 |
| State Street SSgA Global Fixed Income Trust | -0.59 | 5.34 | 1.87 | -4.32 | -0.61 | |
| T.Rowe Price Dynamic Global Bond Fund | 0.08 | -0.94 | -3.48 | -0.57 | 1.44 | |
| UBS Global Credit Fund | 0.00 | 8.59 | 3.05 | -3.86 | 0.84 | |
| UBS International Bond | -0.30 | 6.75 | 2.10 | -3.26 | 0.08 | |
| Vanguard International Credit Securities Index (Hedged) | -0.27 | 7.13 | 3.19 | -3.60 | 0.33 | |
| Vanguard International Fixed Interest Index (Hedged) | -0.45 | 5.36 | 2.11 | -3.80 | -0.51 |
*End of January 2024. Return in AUD after fees