The 10-year Australian Treasury bond yield trended sideways in the first week of March before starting a steep downtrend. This downtrend lasted through to the close to the last week of March and then levelled off over the remaining days. By the end of it, the 3-year ACGB yield had shed 70bps to 2.91%, the 10-year yield had lost 56bps to 3.30% while the 20-year yield finished 45bps lower at 3.72%.
As a result, conditions facing fund managers in March were extremely conducive to positive returns. The Bloomberg Ausbond Treasury Index, representing Commonwealth bonds, was the best performer after it returned 3.53% for the month. The Semi-Government Index produced the second-highest return of 3.20%, while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of 3.16%. The Corporate Bond Index also returned 3.16% while the FRN Index returned 0.26%.
Of the 31 funds in the YieldReport survey, 28 produced positive results and the month’s median return was 3.03%.
The Mercer Australian Sovereign Bond Fund produced a return of 3.55% in the survey, making it the highest returning fund for the month. The Jamieson Coote Bonds Active Fund’s return of 3.54% was the next-highest while the Pendal Government Bond Fund was third with a return of 3.52%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund. The Realm fund returned 6.91% while the next highest return again came from the Alexander Credit Opportunities Fund with a return of 5.86%. Realm’s High Income (Wholesale) Fund retained third position with a 12-month return of 3.06%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 2.98 | 4.87 | -0.63 | -2.97 | 0.09 | |
| AMP Capital Corporate Bond | ACA02 | 0.17 | 1.37 | 2.05 | 2.27 | 1.87 |
| Alexander Credit Opportunities Fund | 0.56 | 1.76 | 5.86 | 5.50 | 4.97 | |
| AMP Flex Lifetime S2-AMP Australian Bond | 3.11 | 4.87 | -0.60 | -2.39 | 0.56 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 3.11 | 4.50 | -0.55 | -3.31 | 0.15 | |
| Altius Sustainable Bond Fund | 1.32 | 2.74 | 1.37 | -0.42 | 0.60 | |
| Artesian Corporate Bond Fund | 0.25 | 2.03 | 2.16 | 2.36 | 2.09 | |
| Pendal Enhanced Credit (Wholesale) | 2.05 | 3.50 | 1.13 | -0.31 | 1.68 | |
| Pendal Fixed Interest (Wholesale) | 3.22 | 4.74 | 0.32 | -2.58 | 1.09 | |
| Pendal Government Bond | 3.52 | 5.10 | 0.47 | -2.57 | 1.38 | |
| CFS Aberdeen Australian Fixed Interest | 3.03 | 4.77 | 0.11 | -2.56 | 0.28 | |
| CFS Wholesale Australian Bond | 3.02 | 4.54 | -0.12 | -2.42 | 1.19 | |
| DDH Fixed Interest | 3.06 | 4.85 | 0.18 | -2.25 | 1.13 | |
| Spectrum Strategic Income | SPE01 | -0.14 | 0.72 | 1.94 | 1.73 | 2.34 |
| Jamieson Coote Bonds Active | 3.54 | 5.01 | 0.30 | -3.19 | 1.03 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | 3.17 | 5.16 | 0.26 | -2.07 | 1.26 |
| Macquarie Australian Fixed Interest | 3.22 | 5.01 | 0.87 | -1.93 | 1.43 | |
| Mercer Australian Sovereign Bond Fund | 3.55 | 4.92 | 0.33 | -3.19 | 1.18 | |
| Nikko AM Australian Bond | 3.40 | 5.14 | 0.75 | -2.09 | 1.38 | |
| Henderson Australian Fixed Interest (Inst) | 2.86 | 5.11 | 0.04 | -1.65 | 1.32 | |
| Henderson Tactical Income | -0.20 | 1.13 | 0.66 | 1.56 | 1.75 | |
| Perpetual WFIA-Schroder Fixed Income | 3.02 | 4.66 | -0.63 | -2.25 | 0.63 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 3.04 | 4.45 | -0.13 | -2.94 | 0.38 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 2.72 | 4.54 | 0.00 | -1.89 | 0.98 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 1.65 | 2.70 | 0.70 | -0.72 | 1.10 |
| Realm High Income (Wholesale) | -0.77 | 2.02 | 3.06 | 3.63 | 3.57 | |
| Realm Strategic Income - Enduring Units | 0.79 | 2.32 | 6.91 | 6.15 | n/a | |
| SSgA Australian Fixed Income | 3.15 | 4.56 | 0.19 | -2.56 | 1.12 | |
| UBS Australian Bond Fund | 3.31 | 5.16 | 0.35 | -2.21 | 1.03 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 3.10 | 4.54 | 0.13 | -2.59 | 1.06 |
| Vanguard Australian Govt Bond Index | 3.40 | 4.86 | -0.01 | -2.92 | 1.01 | |
| Bloomberg AusBond Composite 0+YR AUD | 3.16 | 4.60 | 0.35 | -2.37 | 1.27 |
*End of March 2023. Return in AUD after fees