Conditions facing global fund managers were not nearly as bountiful in April as they were in March. Long-term US Treasury bond yields finished the month a little lower, although ultra-long yields rose modestly. Yields in major euro-zone countries moved inconsistently while UK yields moved moderately higher. The Aussie dollar was weaker against the USD, sterling and the euro but stronger against the yen. 26 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 April was 0.40% (March: 1.84%) while the median return over the 12 months including April came to -1.75% (March: -4.28%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 0.40% over the month and -2.98% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield lost 2bps to 4.00% over the month, the 10-year yield shed 5bps to 3.42% while the 30-year yield finished 3bps higher at 3.48%. BBB corporate spreads tightened modestly.
In other major bond markets, the German 10-year bund yield lost 2bps to 2.36% while the French 10-year OAT yield gained 4bps to 2.93%. The 10-year UK gilt yield finished the month 22bps higher at 3.85%.
The best performing global fund for the month in the YieldReport April survey was the Western Asset Macro Opportunities Bond Fund. It produced a return of 1.56% for the month, following a top quartile return of 3.04% in March and a worst-in-class performance of -5.71% in February.
The second-highest return for the month was produced by Bentham Professional Syndicated Loan Fund. Its return of 1.43% followed a near-worst-in-class performance of -0.64% in March and a top quartile return of 0.55% in February.
In terms of fund performance for the twelve months to the end of April, the Western Asset Macro Opportunities Bond Fund took over the titles of highest performing fund from the Ardea Real Outcome Fund. The Western Asset fund produced a 12-month return of 4.64% while the Ardea fund took second place with a 12-month return of 3.34%.
| GLOBAL BOND FUNDS | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 0.10 | -0.18 | -3.17 | -3.15 | -0.59 | |
| AMP Capital International Bond | n/a | -0.25 | -3.02 | -3.94 | -0.33 | |
| ANZ-CFS Global Credit Income EF | 0.43 | 0.44 | 1.99 | 1.38 | 0.03 | |
| Ardea Real Outcome Fund | -0.46 | 4.19 | 3.34 | 2.29 | 3.82 | |
| Bentham Professional Global Income | mFund | 0.91 | -0.08 | 1.94 | 6.94 | 3.05 |
| Bentham Wholesale High Yield | mFund | 1.18 | 1.82 | 1.06 | 4.26 | 2.01 |
| Bentham Syndicated Loan ASX Class | mFund | 1.43 | 1.34 | 0.79 | 6.68 | 2.05 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.39 | 1.22 | 1.84 | 1.27 | 1.45 |
| CFS Wholesale Global Corporate Bond | 0.70 | 0.12 | -1.75 | -2.77 | 0.93 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.25 | 0.79 | 0.62 | -1.92 | -0.05 | |
| Dimensional Global Bond Trust | 0.52 | 0.49 | -2.45 | -3.58 | 0.27 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.26 | 0.77 | 1.02 | -0.51 | 0.55 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | 0.57 | 0.68 | 0.32 | -1.96 | 0.47 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.80 | 0.80 | -0.38 | 7.27 | 2.48 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | -0.07 | -0.53 | -3.40 | 1.05 | 0.23 |
| Legg Mason Western Asset Global Bond Fund | 0.08 | 0.24 | -2.63 | -2.38 | 0.29 | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | 1.56 | -1.33 | 4.64 | -1.95 | -0.82 | |
| Macquarie Global Income Opportunities Fund | 0.42 | 0.55 | 1.78 | 1.45 | 1.61 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 0.11 | 1.63 | 1.78 | -1.94 | 1.61 | |
| Mercer Global Credit Fund | 0.64 | -0.35 | -2.76 | -2.30 | 0.39 | |
| Mercer Global Sovereign Bond Fund | -0.21 | 1.00 | -2.39 | -2.43 | 0.90 | |
| PIMCO Global Bond (Wholesale) | mFund | 0.44 | 0.04 | -2.90 | -1.93 | 0.49 |
| PIMCO Global Credi (Wholesale) | mFund | 0.44 | -0.26 | -2.67 | -1.97 | 0.36 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 0.30 | 0.94 | -0.51 | -1.96 | 0.80 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 0.36 | -0.07 | -2.60 | -0.06 | 0.28 |
| State Street SSgA Global Fixed Income Trust | 0.18 | 0.91 | -4.43 | -4.55 | -0.21 | |
| T.Rowe Price Dynamic Global Bond Fund | -0.19 | 1.45 | -0.85 | 2.72 | 2.45 | |
| UBS Global Credit Fund | 0.63 | -0.14 | -2.52 | -2.67 | 0.63 | |
| UBS International Bond | 0.37 | 0.33 | -2.70 | -2.88 | 0.30 | |
| Vanguard International Credit Securities Index (Hedged) | 0.58 | 0.17 | -2.47 | -2.85 | 0.27 | |
| Vanguard International Fixed Interest Index (Hedged) | 0.17 | 1.06 | -3.57 | -4.13 | -0.12 |
*End of April 2023. Return in AUD after fees