Managed Funds

The 10-year Australian Treasury bond yield started trending higher early in February, hitting a peak around the middle of the month. It then dropped back and trended lower at a modest pace until over the next two weeks. By the end of February, the 3-year ACGB yield had gained 16bps to 3.70%, the 10-year yield had increased by 12bps to 4.15% while the 20-year finished 11bps higher at 4.44%. The average 3-year BBB-rated non-financial corporate spread (to ACGBs) tightened by 9bps and the average 10-year spread tightened by 14bps.

As a result, conditions facing fund managers remained challenging. The Bloomberg Ausbond FRN Index was the best performer again after it returned 0.53% for the month. The Corporate Bond Index produced the second-highest return of 0.05%, while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of -0.30%. The Treasury Index, representing Commonwealth bonds, returned -0.36% while the Semi-Government Index returned -0.41%.

Nine of the 31 funds in the YieldReport survey produced positive results and the month’s median return was -0.28%.

The Alexander Credit Opportunities Fund produced a return of 0.91%, making it the highest returning fund for the month. The Realm Strategic Income (Enduring Units) was just behind it with a return of 0.90% while the Realm High Income (Wholesale) Fund was ranked third with a return of 0.71%.

On a 12-month basis, Realm’s Strategic Income (Enduring Units) Fund retained the title of highest performing fund. The fund returned 10.37% while the next highest return again came from Realm High Income (Wholesale) Fund with a return of 9.22%. The Alexander Credit Opportunities Fund retained third place after it produced a 12-month return of 8.49%.

AUSTRALIAN FIXED INTEREST	ASX mFund	1m (%)	3m (%)	1y (%)	3y (%)	5y (%)
Advance Aus Fixed Intr Multi-Blend		-0.34	2.68	3.11	-2.17	-0.48
AMP Capital Corporate Bond	ACA02	0.58	1.73	4.78	1.93	2.33
Alexander Credit Opportunities Fund		0.91	2.36	8.49	6.31	5.52
AMP Flex Lifetime S2-AMP Australian Bond		-0.30	2.53	3.23	-2.04	-0.23
AMP Generations BlackRock Aust Fixed Interest Index		-0.34	2.47	3.01	-2.24	-0.67
Altius Sustainable Bond Fund		0.14	1.96	4.49	0.57	0.78
Artesian Corporate Bond Fund		0.64	2.35	7.11	2.55	2.94
Pendal Enhanced Credit (Wholesale)		0.09	2.51	5.78	-0.09	1.60
Pendal Fixed Interest (Wholesale)		-0.24	2.68	3.78	-1.29	0.41
Pendal Government Bond		-0.31	2.77	3.73	-1.27	0.39
CFS Aberdeen Australian Fixed Interest		-0.28	2.79	3.77	-1.71	-0.23
CFS Wholesale Australian Bond		-0.35	2.40	3.53	-1.61	0.38
DDH Fixed Interest		-0.24	2.75	3.75	-1.51	0.39
Spectrum Strategic Income	SPE01	0.55	1.80	5.50	2.68	2.72
Jamieson Coote Bonds Active		-0.45	2.43	2.52	-2.04	-0.16
Legg Mason Western Asset Australian Bond Trust	LMA04	-0.29	2.94	4.19	-1.34	0.47
Macquarie Australian Fixed Interest		-0.27	2.72	4.05	-1.07	0.59
Mercer Australian Sovereign Bond Fund		-0.40	2.49	2.50	-1.87	-0.09
Nikko AM Australian Bond		-0.33	2.86	4.36	-1.15	0.53
Henderson Australian Fixed Interest (Inst)		-0.31	3.31	4.38	-1.21	0.69
Henderson Tactical Income		0.23	2.29	5.74	2.09	2.40
Perpetual WFIA-Schroder Fixed Income		-0.26	3.00	3.61	-2.06	0.00
Perpetual WFIA-Vanguard Aust Fixed Interest Index		-0.33	2.52	3.16	-1.77	-0.39
PIMCO Australian Bond (Wholesale)	PMF04	-0.18	2.98	3.91	-1.43	0.32
PIMCO Australian Focus (Wholesale)	PMF05	-0.01	2.21	4.59	-0.01	1.05
Realm High Income (Wholesale)		0.71	3.58	9.22	4.87	4.68
Realm Strategic Income - Enduring Units		0.90	2.58	10.37	7.48	n/a
SSgA Australian Fixed Income		-0.31	2.67	3.53	-1.52	0.18
UBS Australian Bond Fund		-0.47	3.12	4.27	-1.36	0.26
Vanguard Australian Fixed Interest Index	UAM04	-0.32	2.58	3.35	-1.58	0.11
Vanguard Australian Govt Bond Index		-0.39	2.59	2.94	-1.87	-0.13
Bloomberg AusBond Composite 0+YR AUD		-0.30	2.59	3.51	-1.40	0.31

^{*End of February 2024. Return in AUD after fees}