The 10-year Australian Treasury bond yield trended downwards all through the month. By the end of December, 3-year, 10-year and 20-year ACGB yields had all shed 45bps to 3.57%, 3.97% and 4.25% respectively. 3-year BBB-rated non-financial corporate spreads (to ACGBs) tightened by 10bps while 10-year spreads tightened by 35bps.
As a result, conditions facing fund managers remained as buoyant as those of November. The Bloomberg Ausbond Semi-Government Index was the best performer after it returned 3.00% for the month. The Treasury Index, representing Commonwealth bonds, produced the second-highest return of 2.77%, while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of 2.69%. The Corporate Bond Index returned 2.10% while the FRN Index returned 0.51%.
All 31 funds in the YieldReport survey produced positive results and the month’s median return was 2.73%.
The UBS Australian Bond Fund produced a return of 3.68%, making it the highest returning fund for the month. The Henderson Australian Fixed Interest (Institutional) was next with a return of 3.33% while the Legg Mason Western Asset Australian Bond Trust was ranked third with a return of 3.11%.
On a 12-month basis, Realm High Income (Wholesale) Fund took the title as the highest performing fund. The fund returned 10.58% while the next highest return came from Realm Strategic Income (Enduring Units) fund with a return of 10.11%. The Alexander Credit Opportunities Fund took third place after it produced a 12-month return of 8.05%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 2.80 | 4.14 | 5.12 | -3.56 | -0.19 | |
| AMP Capital Corporate Bond | ACA02 | 0.62 | 1.51 | 4.88 | 1.66 | 2.24 |
| Alexander Credit Opportunities Fund | 0.74 | 2.10 | 8.05 | 6.08 | n/a | |
| AMP Flex Lifetime S2-AMP Australian Bond | 2.65 | 3.84 | 5.11 | -3.41 | 0.08 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 2.64 | 3.64 | 4.57 | -3.57 | -0.37 | |
| Altius Sustainable Bond Fund | 1.55 | 2.73 | 5.94 | -0.29 | 0.82 | |
| Artesian Corporate Bond Fund | 1.23 | 2.55 | 7.82 | 2.18 | 2.87 | |
| Pendal Enhanced Credit (Wholesale) | 1.97 | 3.13 | 6.73 | -0.81 | 1.75 | |
| Pendal Fixed Interest (Wholesale) | 2.77 | 4.01 | 5.40 | -2.96 | 0.66 | |
| Pendal Government Bond | 2.89 | 4.19 | 5.45 | -2.92 | 0.74 | |
| CFS Aberdeen Australian Fixed Interest | 2.88 | 3.99 | 5.61 | -3.03 | 0.05 | |
| CFS Wholesale Australian Bond | 2.66 | 3.64 | 5.32 | -2.79 | 0.72 | |
| DDH Fixed Interest | 2.82 | 3.98 | 5.62 | -2.80 | 0.73 | |
| Spectrum Strategic Income | SPE01 | 0.84 | 1.86 | 5.40 | 2.51 | 2.77 |
| Jamieson Coote Bonds Active | 2.75 | 3.88 | 4.30 | -3.58 | 0.23 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | 3.11 | 4.27 | 6.37 | -2.64 | 0.82 |
| Macquarie Australian Fixed Interest | 2.76 | 4.03 | 5.89 | -2.51 | 0.91 | |
| Mercer Australian Sovereign Bond Fund | 2.73 | 3.91 | 4.10 | -3.49 | 0.27 | |
| Nikko AM Australian Bond | 2.95 | 4.10 | 6.20 | -2.60 | 0.86 | |
| Henderson Australian Fixed Interest (Inst) | 3.33 | 4.55 | 6.68 | -2.71 | 0.98 | |
| Henderson Tactical Income | 1.60 | 2.57 | 6.42 | 1.54 | 2.39 | |
| Perpetual WFIA-Schroder Fixed Income | 3.01 | 4.23 | 5.28 | -3.17 | 0.28 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 2.65 | 3.73 | 4.70 | -3.01 | -0.09 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 2.92 | 4.03 | 5.69 | -2.73 | 0.65 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 1.85 | 2.98 | 5.29 | -0.80 | 1.15 |
| Realm High Income (Wholesale) | 1.67 | 3.66 | 10.58 | 4.49 | 4.59 | |
| Realm Strategic Income - Enduring Units | 0.80 | 2.51 | 10.11 | 7.18 | n/a | |
| SSgA Australian Fixed Income | 2.78 | 3.89 | 5.05 | -2.82 | 0.52 | |
| UBS Australian Bond Fund | 3.68 | 4.98 | 6.71 | -2.57 | 0.67 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 2.69 | 3.81 | 4.91 | -2.87 | 0.44 |
| Vanguard Australian Govt Bond Index | 2.82 | 3.93 | 4.62 | -3.31 | 0.25 | |
| Bloomberg AusBond Composite 0+YR AUD | 2.69 | 3.79 | 5.06 | -2.69 | 0.64 |
*End of December 2023. Return in AUD after fees