Conditions facing global fund managers in December remained particularly friendly. Long-term US Treasury bond yields again finished the month considerably lower, as did yields in major euro-zone countries and the UK yields. However, the Aussie dollar was stronger against the major currencies with the exception of yen. All but 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 December was 3.29% while the median return over the 12 months including December was 5.88%. The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 3.28% over the month and 5.33% over the rolling year (when hedged into Australian dollars).
In US markets, 2-year and 10-year Treasury yields both lost 45bps to 4.25% and 3.88% respectively over the month, while the 30-year yield finished 47bps lower at 4.03%. BBB corporate spreads tightened.
In other major bond markets, the German 10-year bund yield lost 46bps to 1.93% while the French 10-year OAT yield shed 49bps to 2.47%. The 10-year UK gilt yield finished the month 58bps lower at 3.68%.
The best performing global fund for the month in the YieldReport December survey was the Western Asset Macro Opportunities Bond Fund which produced a return of 8.99% for the month.
The second-highest return for the month, 5.82%, was produced by the Legg Mason Brandywine Global Opportunistic Fixed Income Fund.
In terms of fund performance for the twelve months to the end of December, the Bentham Wholesale High Yield Fund took the title as the highest performing fund. It produced a 12-month return of 13.40% while the Western Asset Macro Opportunities Bond Fund was next with a return of 11.41%.
| GLOBAL BOND FUNDS | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 4.21 | 6.85 | 5.41 | -3.44 | 0.08 | |
| ANZ-CFS Global Credit Income EF | 1.20 | 2.35 | 5.82 | 1.38 | 1.24 | |
| Ardea Real Outcome Fund | -1.87 | -1.27 | 2.82 | 1.05 | 3.43 | |
| Bentham Professional Global Income | mFund | 4.26 | 6.59 | 8.09 | 3.94 | 4.15 |
| Bentham Wholesale High Yield | mFund | 3.67 | 6.07 | 13.40 | 1.87 | 3.93 |
| Bentham Syndicated Loan ASX Class | mFund | 1.14 | 2.26 | 11.03 | 4.27 | 3.80 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.87 | 2.04 | 5.70 | 1.69 | 1.98 |
| CFS Wholesale Global Corporate Bond | 3.76 | 6.94 | 6.70 | -3.86 | 1.59 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.46 | 1.22 | 3.91 | -1.55 | -0.07 | |
| Dimensional Global Bond Trust | 3.54 | 6.61 | 7.40 | -3.87 | 0.59 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.44 | 1.25 | 4.00 | -0.04 | 0.68 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | 3.21 | 5.56 | 5.37 | -3.24 | 0.85 | |
| Invesco Wholesale Senior Secured Income | mFund | 1.10 | 2.28 | 10.29 | 4.81 | 4.32 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | 5.82 | 10.16 | 6.30 | -2.23 | 1.55 |
| Legg Mason Western Asset Global Bond Fund | 3.99 | 7.91 | 6.02 | -3.62 | 0.78 | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | 8.99 | 15.59 | 11.41 | -5.17 | 0.84 | |
| Macquarie Global Income Opportunities Fund | 1.98 | 3.82 | 5.75 | 0.39 | 2.19 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 3.82 | 5.88 | 5.89 | -3.53 | 0.95 | |
| Mercer Global Credit Fund | 3.61 | 6.91 | 5.94 | -3.89 | 0.84 | |
| Mercer Global Sovereign Bond Fund | 2.47 | 3.36 | 2.25 | -3.48 | 0.51 | |
| PIMCO Global Bond (Wholesale) | mFund | 3.42 | 5.70 | 6.19 | -2.89 | 0.94 |
| PIMCO Global Credi (Wholesale) | mFund | 3.50 | 6.11 | 5.87 | -3.11 | 0.68 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 3.17 | 4.85 | 5.93 | -2.86 | 0.79 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 2.02 | 4.09 | 5.46 | -1.36 | 0.86 |
| State Street SSgA Global Fixed Income Trust | 3.00 | 5.34 | 4.05 | -4.37 | -0.32 | |
| T.Rowe Price Dynamic Global Bond Fund | 0.05 | -0.41 | -5.09 | -0.45 | 1.26 | |
| UBS Global Credit Fund | 3.78 | 7.22 | 6.43 | -4.16 | 1.25 | |
| UBS International Bond | 3.38 | 6.08 | 4.78 | -3.35 | 0.36 | |
| Vanguard International Credit Securities Index (Hedged) | 3.37 | 6.45 | 6.44 | -3.78 | 0.67 | |
| Vanguard International Fixed Interest Index (Hedged) | 2.77 | 5.04 | 4.59 | -3.88 | -0.25 |
*End of December 2023. Return in AUD after fees