Managed Funds

The 10-year Australian Treasury bond yield see-sawed up, down and then up again, hitting a peak about 25bps above its starting point in the middle of the month. From there, it trended lower through the remainder of the month. By this point, the 3-year ACGB yield had lost another 13bps to 3.73%, the 10-year yield had shed another 4bps to 4.02% while the 20-year yield finished unchanged at 4.36%. 3-year non-financial corporate spreads (to ACGBs) slipped 1bp while 10-year spreads fell by 2bps.

As a result, conditions facing fund managers proved to be quite productive. The Bloomberg Ausbond Corporate Bond Index was the best performer again after it returned 0.99% for the month. The Semi-Government Index produced the second-highest return of 0.86%, while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of 0.74%. The Treasury Index, representing Commonwealth bonds, returned 0.61% while the FRN Index returned 0.46%.

All 31 funds in the YieldReport survey produced positive results and the month’s median return was 0.76%.

The Henderson Australian Fixed Interest (Institutional) Fund produced a return of 1.07%, making it the highest returning fund for the month. The Pendal Enhanced Credit (Wholesale) Fund was next, with a return of 1.05% while the UBS Australian Bond Fund was ranked third with a return of 1.00%.

On a 12-month basis, Realm’s High Income (Wholesale) Fund retained its title as the highest performing fund. The fund returned 9.28% while the next highest return again came from Realm’s Strategic Income (Enduring Units) with a return of 8.04%. The Alexander Credit Opportunities Fund retained third place after producing a 12-month return of 7.43%.

AUSTRALIAN FIXED INTEREST	ASX mFund	1m (%)	3m (%)	1y (%)	3y (%)	5y (%)
Advance Aus Fixed Intr Multi-Blend		0.85	-0.71	1.65	-3.81	-0.40
AMP Capital Corporate Bond	ACA02	0.31	1.28	4.40	1.77	2.04
Alexander Credit Opportunities Fund		0.69	2.02	7.43	5.97	n/a
AMP Flex Lifetime S2-AMP Australian Bond		0.85	-0.70	1.65	-3.64	-0.09
AMP Generations BlackRock Aust Fixed Interest Index		0.68	-0.85	1.14	-4.02	-0.49
Altius Sustainable Bond Fund		0.67	0.47	4.33	-0.69	0.59
Artesian Corporate Bond Fund		0.86	1.94	5.73	1.99	2.41
Pendal Enhanced Credit (Wholesale)		1.05	0.73	4.28	-1.08	1.48
Pendal Fixed Interest (Wholesale)		0.76	-0.86	2.04	-3.32	0.34
Pendal Government Bond		0.76	-0.90	1.89	-3.27	0.63
CFS Aberdeen Australian Fixed Interest		0.67	-0.63	1.87	-3.39	-0.26
CFS Wholesale Australian Bond		0.95	-0.50	2.15	-3.15	0.63
DDH Fixed Interest		0.85	-0.63	1.87	-3.09	0.52
Spectrum Strategic Income	SPE01	0.62	1.70	4.20	2.24	2.45
Jamieson Coote Bonds Active		0.62	-1.47	0.92	-3.98	0.18
Legg Mason Western Asset Australian Bond Trust	LMA04	0.86	-0.50	2.51	-3.02	0.63
Macquarie Australian Fixed Interest		0.88	-0.53	2.72	-2.86	0.77
Mercer Australian Sovereign Bond Fund		0.61	-1.36	0.83	-3.87	0.30
Nikko AM Australian Bond		0.95	-0.42	2.82	-2.94	0.72
Henderson Australian Fixed Interest (Inst)		1.07	-0.25	2.90	-2.93	0.75
Henderson Tactical Income		0.77	1.74	4.73	1.18	2.02
Perpetual WFIA-Schroder Fixed Income		0.76	-0.83	1.15	-3.51	-0.02
Perpetual WFIA-Vanguard Aust Fixed Interest Index		0.66	-0.83	1.38	-3.50	-0.23
PIMCO Australian Bond (Wholesale)	PMF04	0.70	-0.54	2.14	-3.03	0.42
PIMCO Australian Focus (Wholesale)	PMF05	0.46	-0.11	2.22	-1.34	0.87
Realm High Income (Wholesale)		0.25	3.04	8.04	3.46	3.74
Realm Strategic Income - Enduring Units		0.83	2.52	9.28	6.87	n/a
SSgA Australian Fixed Income		0.72	-0.74	1.65	-3.24	0.42
UBS Australian Bond Fund		1.00	-0.57	2.30	-3.14	0.37
Vanguard Australian Fixed Interest Index	UAM04	0.70	-0.78	1.60	-3.28	0.36
Vanguard Australian Govt Bond Index		0.69	-1.04	1.15	-3.68	0.21
Bloomberg AusBond Composite 0+YR AUD		0.74	-0.72	1.78	-3.09	0.56

^{*End of August 2023. Return in AUD after fees}