The 10-year Australian Treasury bond yield trended steadily upwards for much of the month, with only a short sideways period taking place in the second week. By the end of the month, the 3-year ACGB yield had gained 36bps to 4.09%, the 10-year yield had added 48bps to 4.50% while the 20-year yield finished 4bps higher 4.82%. 3-year A-rated non-financial corporate spreads (to ACGBs) tightened by 5bps while 10-year spreads tightened by 22bps.
As a result, conditions facing fund managers reverted to the trying times of May and June. The Bloomberg Ausbond FRN Index was the best performer after it returned 0.37% for the month. The Corporate Bond Index produced the second-highest return of -0.58%, while the Semi-Government Index was next with a return of -1.49%. The Composite Index, representing a mix of federal, state and corporate bonds, returned -1.53% while the Treasury Index, representing Commonwealth bonds, returned -1.88%.
Only six of the 31 funds in the YieldReport survey produced positive results and the month’s median return was -1.56%.
The Realm Strategic Income (Enduring Units) Fund produced a return of 0.80%, making it the highest returning fund for the month. The Alexander Credit Opportunities Fund was next with a return of 0.64% while the Spectrum Strategic Income Fund was ranked third with a return of 0.38%.
On a 12-month basis, Realm’s High Income (Wholesale) Fund retained its title as the highest performing fund. The fund returned 10.03% while the next highest return again came from Realm’s Strategic Income (Enduring Units) with a return of 9.51%. The Alexander Credit Opportunities Fund retained third place after producing a 12-month return of 7.53%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -2.01 | -0.66 | 1.16 | -4.77 | -0.70 | |
| AMP Capital Corporate Bond | ACA02 | 0.00 | 1.10 | 4.46 | 1.69 | 1.99 |
| Alexander Credit Opportunities Fund | 0.64 | 2.01 | 7.53 | 6.07 | n/a | |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.62 | -0.16 | 1.57 | -4.53 | -0.31 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.57 | -0.43 | 1.03 | -4.83 | -0.71 | |
| Altius Sustainable Bond Fund | -0.87 | 0.36 | 4.24 | -1.16 | 0.36 | |
| Artesian Corporate Bond Fund | 0.27 | 2.00 | 6.23 | 2.04 | 2.42 | |
| Pendal Enhanced Credit (Wholesale) | -0.54 | 1.35 | 4.64 | -1.44 | 1.41 | |
| Pendal Fixed Interest (Wholesale) | -1.59 | -0.33 | 1.93 | -4.25 | 0.16 | |
| Pendal Government Bond | -1.77 | -0.58 | 1.63 | -4.27 | 0.37 | |
| CFS Aberdeen Australian Fixed Interest | -1.43 | -0.19 | 2.00 | -4.18 | -0.43 | |
| CFS Wholesale Australian Bond | -1.48 | -0.04 | 2.05 | -3.96 | 0.43 | |
| DDH Fixed Interest | -1.62 | -0.18 | 1.84 | -3.92 | 0.28 | |
| Spectrum Strategic Income | SPE01 | 0.38 | 1.61 | 4.30 | 2.29 | 2.47 |
| Jamieson Coote Bonds Active | -1.87 | -0.82 | 0.50 | -4.99 | -0.09 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.63 | -0.22 | 2.40 | -3.89 | 0.39 |
| Macquarie Australian Fixed Interest | -1.62 | -0.12 | 2.37 | -3.76 | 0.53 | |
| Mercer Australian Sovereign Bond Fund | -1.86 | -0.87 | 0.39 | -4.90 | 0.03 | |
| Nikko AM Australian Bond | -1.56 | 0.13 | 3.13 | -3.83 | 0.50 | |
| Henderson Australian Fixed Interest (Inst) | -1.84 | -0.22 | 2.70 | -3.89 | 0.45 | |
| Henderson Tactical Income | -0.04 | 1.35 | 5.26 | 1.11 | 1.98 | |
| Perpetual WFIA-Schroder Fixed Income | -1.49 | -0.31 | 1.19 | -4.32 | -0.22 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.59 | -0.47 | 1.30 | -4.27 | -0.43 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.50 | -0.21 | 2.13 | -3.84 | 0.19 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -0.49 | 0.47 | 2.93 | -1.69 | 0.82 |
| Realm High Income (Wholesale) | 0.26 | 1.86 | 10.03 | 3.80 | 4.16 | |
| Realm Strategic Income - Enduring Units | 0.80 | 2.51 | 9.51 | 6.98 | n/a | |
| SSgA Australian Fixed Income | -1.55 | -0.34 | 1.48 | -4.09 | 0.19 | |
| UBS Australian Bond Fund | -1.79 | -0.13 | 1.92 | -4.08 | 0.10 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.60 | -0.41 | 1.45 | -4.09 | 0.14 |
| Vanguard Australian Govt Bond Index | -1.76 | -0.63 | 0.82 | -4.67 | -0.04 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.53 | -2.82 | 1.61 | -3.93 | 0.34 |
*End of September 2023. Return in AUD after fees