Conditions remained distressing for global fund managers in April. US Treasury bond yields again finished the month significantly higher while long-term yields also rose materially in the UK and in major euro-zone countries. However, the Aussie dollar was weaker against the USD, euro and sterling, softening the effects of higher yields. Just 2 out of 34 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 -2.71% (March: -1.88%) while the median return over the 12 months including April came to -7.30% (March: -4.23%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned -3.31% over the month and -8.09% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield gained 37bps to 2.71% over the month, the 10-year yield added 59bps to 2.93% while the 30-year yield finished 55bps higher at 3.00%. BBB spreads widened.
In other major bond markets, the German 10-year bond yield gained 30bps to 0.90% and the French 10-year increased by 38bps to 1.41%. The 10-year UK gilt yield finished the month 23bps higher at 1.85%.
The best performing global fund for the month in the YieldReport April survey was again the T. Rowe Price Dynamic Global Bond Fund. It produced a return of +1.06% for the month, following top-returning performances of 1.93% in March and 0.64% in February.
The second-highest return was produced by the Ardea Real Outcome Fund. Its return of 1.00% followed top-quartile returns of 0.46% in March and -0.97% in February.
In terms of fund performance for the twelve months to the end of April, the Invesco Wholesale Senior Secured Income Fund retained its title as the highest performing fund for a fourteenth consecutive month. The Invesco fund produced a 12-month return of 4.93%, while the Bentham Professional Global Income took over second place from a sibling fund after it produced a 12-month return of 3.44%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -1.82 | -7.24 | -8.87 | -1.85 | 0.19 | |
| AMP Capital Corporate Bond | ACA02 | -0.15 | -1.30 | -1.27 | 1.33 | 2.00 |
| Alexander Credit Opportunities Fund | 0.28 | 0.85 | 4.58 | 4.42 | 4.87 | |
| Alpha Enhanced Yield | IWM05 | -1.31 | -4.76 | -5.94 | -1.82 | -0.86 |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.76 | -7.15 | -8.42 | -1.50 | 0.63 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.57 | -6.57 | -8.51 | -2.03 | 0.23 | |
| Altius Bond Fund | n/a | n/a | n/a | n/a | n/a | |
| Artesian Corporate Bond Fund | -0.67 | -2.01 | -2.08 | 1.33 | 2.52 | |
| Pendal Enhanced Credit (Wholesale) | -1.36 | -5.20 | -6.66 | 0.00 | 1.78 | |
| BT Fixed Interest Retail | -1.68 | -6.74 | -7.99 | -1.59 | 0.45 | |
| Pendal Fixed Interest (Wholesale) | -1.65 | -6.94 | -7.89 | -0.71 | 1.12 | |
| Pendal Government Bond | -1.70 | -6.92 | -7.69 | -0.86 | 1.43 | |
| CFS Aberdeen Australian Fixed Interest | -1.56 | -6.68 | -8.54 | -1.74 | 0.27 | |
| CFS Wholesale Australian Bond | -1.50 | -6.30 | -7.71 | -0.64 | 1.24 | |
| DDH Fixed Interest | -1.67 | -6.70 | -8.13 | -0.86 | 1.24 | |
| Spectrum Strategic Income | SPE01 | -0.18 | -0.62 | 0.07 | 1.61 | 2.66 |
| Jamieson Coote Bonds Active | -1.45 | -6.87 | -8.17 | -1.27 | 1.16 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.70 | -6.81 | -8.03 | -0.92 | 1.44 |
| Macquarie Australian Fixed Interest | -1.60 | -6.69 | -7.79 | -0.82 | 1.41 | |
| Mercer Australian Sovereign Bond Fund | -1.47 | -6.76 | -7.70 | -1.19 | 1.29 | |
| Nikko AM Australian Bond | -1.64 | -6.85 | -7.90 | -0.90 | 1.45 | |
| Henderson Australian Fixed Interest (Inst) | -2.01 | -7.64 | -8.43 | -0.67 | 1.44 | |
| Henderson Tactical Income | -1.21 | -2.23 | -1.96 | 1.14 | 1.88 | |
| Perpetual WFIA-Schroder Fixed Income | -1.57 | -6.95 | -8.61 | -1.13 | 0.69 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.58 | -6.41 | -7.81 | -1.78 | 0.36 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.57 | -6.75 | -8.15 | -1.06 | 1.14 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -0.75 | -3.94 | -4.99 | -0.15 | 1.25 |
| Realm High Income (Wholesale) | -0.70 | -1.38 | 0.54 | 3.39 | 3.40 | |
| Realm Strategic Income - Enduring Units | 0.31 | 0.95 | 5.41 | n/a | n/a | |
| SSgA Australian Fixed Income | -1.49 | -6.37 | -7.65 | -1.07 | 1.26 | |
| UBS Australian Bond Fund | -1.53 | -6.58 | -7.87 | -1.15 | 1.21 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.57 | -6.41 | -7.69 | -1.15 | 1.18 |
| Vanguard Australian Govt Bond Index | -1.56 | -6.64 | -7.93 | -1.28 | 1.12 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.49 | -6.33 | -7.47 | -0.91 | 1.40 |