The 10-year Australian Treasury bond yield trended sideways for much of the month except for the second week where yields rose about 30bps before retracing. By the end of the month, the 3-year ACGB yield had lost 13bps to 3.86%, the 10-year yield had added 4bps to 4.06% while the 20-year yield finished 6bps higher at 4.36%. 3-year non-financial corporate spreads (to ACGBs) fell by 14bps while 10-year spreads fell by 10bps.
As a result, conditions facing fund managers improved on the ugly environment of June. The Bloomberg Ausbond Corporate Bond Index was the best performer after it returned 0.85% for the month. The Composite Index, representing a mix of federal, state and corporate bonds, produced the second-highest return of 0.52%, while the Treasury Index, representing Commonwealth bonds, was next with a return of 0.49%. The FRN Index returned 0.46% while the Semi-Government Index returned 0.42%.
All 31 funds in the YieldReport survey produced positive results and the month’s median return was 0.58%.
The Realm High Income (Wholesale) Fund produced a return of 1.31%, making it the highest returning fund for a second consecutive month. Realm’s Strategic Income Fund (Enduring Units) was next, also for a second consecutive month, with a return of 0.86%. The Artesian Corporate Bond Fund was third with a return of 0.85%.
On a 12-month basis, Realm’s High Income (Wholesale) Fund retained its title as the highest performing fund. The Realm fund returned 8.92% while the next highest return again came from Realm’s Strategic Income (Enduring Units) with a return of 8.01%. The Alexander Credit Opportunities Fund retained third place after producing a 12-month return of 7.35%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 0.51 | -2.74 | -1.81 | -4.21 | -0.44 | |
| AMP Capital Corporate Bond | ACA02 | 0.79 | 1.20 | 4.25 | 1.80 | 2.03 |
| Alexander Credit Opportunities Fund | 0.68 | 1.96 | 7.35 | 5.88 | n/a | |
| AMP Flex Lifetime S2-AMP Australian Bond | 0.63 | -2.79 | -1.72 | -4.04 | -0.11 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 0.47 | -2.74 | -2.19 | -4.37 | -0.48 | |
| Altius Sustainable Bond Fund | 0.57 | -0.32 | 2.48 | 0.96 | 0.48 | |
| Artesian Corporate Bond Fund | 0.85 | 1.36 | 5.23 | 1.95 | 2.33 | |
| Pendal Enhanced Credit (Wholesale) | 0.84 | -0.83 | 1.83 | -1.40 | 1.41 | |
| Pendal Fixed Interest (Wholesale) | 0.51 | -2.76 | -1.28 | -3.77 | 0.33 | |
| Pendal Government Bond | 0.45 | -2.87 | -1.55 | -3.69 | 0.62 | |
| CFS Aberdeen Australian Fixed Interest | 0.59 | -2.42 | -1.32 | -3.68 | -0.28 | |
| CFS Wholesale Australian Bond | 0.51 | -2.52 | -1.37 | -3.57 | 0.57 | |
| DDH Fixed Interest | 0.61 | -2.66 | -1.68 | -3.45 | 0.51 | |
| Spectrum Strategic Income | SPE01 | 0.61 | 1.37 | 3.80 | 2.12 | 2.47 |
| Jamieson Coote Bonds Active | 0.45 | -3.27 | -2.42 | -4.44 | 0.22 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | 0.57 | -2.48 | -0.98 | -3.40 | 0.62 |
| Macquarie Australian Fixed Interest | 0.63 | -2.57 | -0.59 | -3.29 | 0.75 | |
| Mercer Australian Sovereign Bond Fund | 0.39 | -3.35 | -2.49 | -4.34 | 0.35 | |
| Nikko AM Australian Bond | 0.76 | -2.64 | -0.99 | -3.37 | 0.69 | |
| Henderson Australian Fixed Interest (Inst) | 0.58 | -2.47 | -0.83 | -3.35 | 0.69 | |
| Henderson Tactical Income | 0.61 | 1.27 | 3.46 | 1.05 | 1.92 | |
| Perpetual WFIA-Schroder Fixed Income | 0.44 | -2.98 | -2.32 | -3.87 | -0.06 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 0.47 | -2.65 | -1.83 | -3.85 | -0.22 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 0.60 | -2.35 | -1.02 | -3.26 | 0.41 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.50 | -0.89 | 0.08 | -1.42 | 0.87 |
| Realm High Income (Wholesale) | 1.31 | 3.50 | 8.01 | 3.91 | 4.54 | |
| Realm Strategic Income - Enduring Units | 0.86 | 2.48 | 8.92 | 6.71 | n/a | |
| SSgA Australian Fixed Income | 0.51 | -2.65 | -1.65 | -3.62 | 0.44 | |
| UBS Australian Bond Fund | 0.68 | -2.86 | -1.14 | -3.61 | 0.33 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 0.50 | -2.65 | -1.67 | -3.62 | 0.38 |
| Vanguard Australian Govt Bond Index | 0.46 | -3.10 | -2.32 | -4.09 | 0.23 | |
| Bloomberg AusBond Composite 0+YR AUD | 0.52 | -2.63 | -1.54 | -3.46 | 0.58 |
*End of July 2023. Return in AUD after fees