Conditions facing global fund managers in July turned from favourable to downright lucrative. Long-term US Treasury bond yields finished significantly lower following falls in the previous two months, yields in major euro-zone countries decreased again while UK yields also moved lower. The Aussie dollar was weaker against all the major currencies. All 29 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 July was 1.73% (June: 0.60%) while the median return over the 12 months including July was 5.17% (June: 4.30%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 2.03% over the month and 4.41% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield shed 50bps to 4.26%, the 10-year yield lost 37bps to 4.03% while the 30-year yield finished 25bps lower at 4.31%. BBB corporate spreads widened a touch.
In other major bond markets, the German 10-year bund yield lost 20bps to 2.30% while the French 10-year OAT yield fell 24bbps to 3.01%. The 10-year UK gilt yield finished the month 19bps lower at 4.08%.
The best performing global fund for the month in the YieldReport July survey was the Western Asset Macro Opportunities Bond Fund which produced a return of 3.19%. The second-highest return for the month, 2.52%, was produced by the Bentham Professional Global Income Fund. The Western Asset Global Bond Fund was ranked third with a return of 2.26%.
In terms of fund performance for the twelve months to the end of July, the Bentham Professional Global Income Fund took over the title as highest performing fund. It produced 12-month return of 10.85% while the Bentham Wholesale High Yield Fund retained second place with a return of 9.89%. The Invesco Wholesale Senior Secured Income Fund took third position after it returned 8.00%.
| FUND NAME | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 1.90 | 3.39 | 5.17 | -2.83 | -0.87 | |
| ANZ-CFS Global Credit Income EF | 1.05 | 1.25 | 5.13 | 2.05 | 1.29 | |
| Ardea Real Outcome Fund | 0.16 | -0.66 | -0.45 | 0.99 | 2.22 | |
| Bentham Professional Global Income | mFund | 2.52 | 4.05 | 10.85 | 4.16 | 4.47 |
| Bentham Wholesale High Yield | mFund | 1.71 | 3.79 | 9.89 | 2.15 | 2.94 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.93 | 2.27 | 6.60 | 2.80 | 2.12 |
| CFS Wholesale Global Corporate Bond | n/a | -1.33 | 0.21 | -4.88 | -0.81 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.45 | 1.15 | 4.50 | -0.99 | -0.17 | |
| Dimensional Global Bond Trust | 1.76 | 3.17 | 6.03 | -3.40 | -0.84 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.44 | 1.15 | 4.60 | 0.78 | 0.82 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | 2.24 | 3.84 | 3.62 | -2.28 | -0.64 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.77 | 1.83 | 8.00 | 4.22 | 4.01 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | 2.00 | 3.77 | -1.74 | -3.22 | -0.41 |
| Legg Mason Western Asset Global Bond Fund | 2.26 | 3.99 | 3.35 | -3.59 | -0.53 | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | 3.19 | 5.76 | -0.48 | -6.16 | -1.69 | |
| Macquarie Global Income Opportunities Fund | 1.29 | 2.48 | 6.32 | 1.12 | 1.69 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 2.17 | 3.79 | 5.90 | -3.02 | -0.69 | |
| Mercer Global Credit Fund | 2.02 | 4.04 | 5.85 | -3.31 | -0.31 | |
| Mercer Global Sovereign Bond Fund | 1.68 | 2.97 | 2.87 | -2.91 | -0.73 | |
| PIMCO Global Bond (Wholesale) | mFund | 1.68 | 3.27 | 5.89 | -2.18 | 0.11 |
| PIMCO Global Credi (Wholesale) | mFund | 2.12 | 4.34 | 5.64 | -2.65 | -0.17 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 1.62 | 3.05 | 5.61 | -2.13 | -0.15 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 1.23 | 2.42 | 6.41 | -0.68 | 0.91 |
| State Street SSgA Global Fixed Income Trust | 1.65 | 2.91 | 3.22 | -3.96 | -1.45 | |
| T.Rowe Price Dynamic Global Bond Fund | 0.33 | -0.26 | 1.00 | -0.35 | 1.53 | |
| UBS Global Credit Fund | 1.86 | 4.10 | 6.08 | -3.66 | -0.22 | |
| UBS International Bond | 1.80 | 3.65 | 4.42 | -2.91 | -0.60 | |
| Vanguard International Credit Securities Index (Hedged) | 2.05 | 3.73 | 5.51 | -3.28 | -0.57 | |
| Vanguard International Fixed Interest Index (Hedged) | 1.81 | 2.86 | 3.19 | -3.43 | -1.31 |
*End of July 2024. Return in AUD after fees