The 10-year Australian Treasury bond yield moved up steadily in the first week of June and then trended sideways for the remainder of the month, trading in a 17bps range. By the end of the month, the 3-year ACGB yield had gained 62bps to 3.99%, the 10-year yield had added 41bps to 4.02% while the 20-year yield finished 27bps higher at 4.30%.
As a result, conditions facing fund managers stayed ugly. The Bloomberg Ausbond FRN Index again was the best performer after it returned 0.41% for the month. Likewise, the Corporate Bond Index again produced the second-highest return of -1.08%, while the Semi-Government Index was next with a return of -1.86%. The Composite Index, representing a mix of federal, state and corporate bonds, returned -1.95% while the Treasury Index, representing Commonwealth bonds, returned -2.28%.
Of the 30 funds in the YieldReport survey, only seven produced positive results and the month’s median return was -1.95%.
The Realm High Income (Wholesale) Fund produced a return of 1.52%, making it the highest returning fund for the month. The Realm Strategic Income Fund (Enduring Units) was next with a return of 0.81% while the Alexander Credit Opportunities Fund was third with a return of 0.64%.
On a 12-month basis, the Realm High Income (Wholesale) Fund took over the title as the highest performing fund. The Realm fund returned 8.73% while the next highest return came from Realm’s Strategic Income (Enduring Units) with a return of 8.47%. The Alexander Credit Opportunities Fund was pushed into third position after producing a 12-month return of 6.88%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -2.05 | -3.10 | 1.12 | -4.19 | -0.61 | |
| AMP Capital Corporate Bond | ACA02 | 0.18 | 0.81 | 3.79 | 1.76 | 1.94 |
| Alexander Credit Opportunities Fund | 0.64 | 1.94 | 6.88 | 5.68 | n/a | |
| AMP Flex Lifetime S2-AMP Australian Bond | -2.16 | -3.32 | 0.93 | -4.00 | -0.22 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.99 | -3.03 | 0.52 | -4.43 | -0.57 | |
| Altius Sustainable Bond Fund | n/a | n/a | n/a | n/a | n/a | |
| Artesian Corporate Bond Fund | 0.21 | 1.04 | 4.92 | 2.00 | 2.19 | |
| Pendal Enhanced Credit (Wholesale) | -1.14 | -1.34 | 3.20 | -1.44 | 1.28 | |
| Pendal Fixed Interest (Wholesale) | -2.11 | -3.02 | 1.55 | -3.76 | 0.20 | |
| Pendal Government Bond | -2.09 | -3.14 | 1.58 | -3.69 | 0.56 | |
| CFS Aberdeen Australian Fixed Interest | -1.87 | -2.89 | 1.48 | -3.67 | -0.39 | |
| CFS Wholesale Australian Bond | -1.93 | -2.75 | 1.55 | -3.59 | 0.49 | |
| DDH Fixed Interest | -2.06 | -2.94 | 1.67 | -3.44 | 0.42 | |
| Spectrum Strategic Income | SPE01 | 0.46 | 1.11 | 3.34 | 2.06 | 2.39 |
| Jamieson Coote Bonds Active | -2.46 | -3.60 | 0.63 | -4.41 | 0.16 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.91 | -2.78 | 2.02 | -3.38 | 0.54 |
| Macquarie Australian Fixed Interest | -2.02 | -2.95 | 2.20 | -3.33 | 0.65 | |
| Mercer Australian Sovereign Bond Fund | -2.34 | -3.67 | 0.50 | -4.33 | 0.29 | |
| Nikko AM Australian Bond | -2.10 | -3.09 | 2.02 | -3.46 | 0.57 | |
| Henderson Australian Fixed Interest (Inst) | -1.87 | -2.70 | 2.53 | -3.27 | 0.60 | |
| Henderson Tactical Income | 0.34 | 1.23 | 4.87 | 1.05 | 1.84 | |
| Perpetual WFIA-Schroder Fixed Income | -2.01 | -3.19 | 0.58 | -3.77 | -0.13 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.94 | -2.90 | 0.94 | -3.88 | -0.29 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.82 | -2.61 | 1.89 | -3.21 | 0.34 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -1.06 | -0.90 | 2.15 | -1.39 | 0.80 |
| Realm High Income (Wholesale) | 1.52 | 2.64 | 8.73 | 3.55 | 4.01 | |
| Realm Strategic Income - Enduring Units | 0.81 | 2.40 | 8.47 | 6.55 | n/a | |
| SSgA Australian Fixed Income | -1.95 | -2.96 | 1.12 | -3.66 | 0.36 | |
| UBS Australian Bond Fund | -2.23 | -3.22 | 1.49 | -3.65 | 0.22 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.97 | -2.93 | 1.15 | -3.63 | 0.32 |
| Vanguard Australian Govt Bond Index | -2.16 | -3.38 | 0.67 | -4.12 | 0.17 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.95 | -2.95 | 1.24 | -3.51 | 0.51 |
*End of June 2023. Return in AUD after fees