The 10-year Australian Treasury bond yield dropped noticeably in the first few days of February before reversing course and trending higher for the remainder of the month. By the end of it, the 3-year ACGB yield had gained 42bps to 3.61%, the 10-year yield had added 30bps to 3.86% while the 20-year yield finished 23bps higher at 4.17%.
As a result, conditions facing fund managers in February reverted back to the trying times of December. The Bloomberg Ausbond FRN Index was the best performer after it returned 0.43% for the month. The Corporate Bond Index produced the second-highest return of -0.62%, while the Semi-Government Index was next with a return of -1.20%. The Composite Index, representing a mix of federal, state and corporate bonds, returned -1.33% and the Treasury Index, representing Commonwealth bonds, returned -1.58%.
Of the 31 funds in the YieldReport survey, only seven produced positive results and the month’s median return was -1.13%.
The Realm Strategic Income (Enduring Units) Fund produced a return of 0.78% in the survey, making it the highest returning fund for the month. The Realm High Income (Wholesale) Fund’s return of 0.68% was the next-highest while the Artesian Corporate Bond Fund was third with a return of 0.66%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund. The Realm fund returned 6.38% while the next highest return again came from the Alexander Credit Opportunities Fund with a return of 5.51%. Realm’s High Income (Wholesale) Fund retained third position with a 12-month return of 3.37%.
AUSTRALIAN FIXED INTEREST FUNDS
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -1.11 | -0.23 | -7.54 | -4.15 | -0.28 | |
| AMP Capital Corporate Bond | ACA02 | 0.41 | 1.70 | 1.12 | 1.30 | 1.84 |
| Alexander Credit Opportunities Fund | 0.60 | 1.81 | 5.51 | 4.71 | 4.95 | |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.03 | -0.45 | -7.66 | -4.05 | 0.08 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.34 | -0.78 | -7.25 | -4.46 | -0.32 | |
| Altius Sustainable Bond Fund | -0.12 | 1.26 | -1.89 | -1.46 | 0.27 | |
| Artesian Corporate Bond Fund | 0.66 | 2.11 | 0.86 | 1.09 | 2.00 | |
| Pendal Enhanced Credit (Wholesale) | -0.64 | 0.78 | -3.79 | -1.55 | 1.35 | |
| Pendal Fixed Interest (Wholesale) | -1.33 | -0.57 | -6.66 | -3.57 | 0.58 | |
| Pendal Government Bond | -1.41 | -0.87 | -6.81 | -3.65 | 0.85 | |
| CFS Aberdeen Australian Fixed Interest | -1.13 | -0.23 | -6.65 | -3.90 | -0.18 | |
| CFS Wholesale Australian Bond | -1.13 | -0.54 | -6.74 | -3.31 | 0.68 | |
| DDH Fixed Interest | -1.18 | -0.34 | -6.48 | -3.33 | 0.68 | |
| Spectrum Strategic Income | SPE01 | 0.44 | 1.20 | 1.75 | 1.34 | 2.39 |
| Jamieson Coote Bonds Active | -1.43 | -0.99 | -7.16 | -4.27 | 0.51 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.25 | -0.23 | -6.68 | -3.46 | 0.79 |
| Macquarie Australian Fixed Interest | -1.06 | -0.34 | -6.20 | -3.24 | 0.95 | |
| Mercer Australian Sovereign Bond Fund | -1.58 | -1.06 | -7.07 | -4.22 | 0.71 | |
| Nikko AM Australian Bond | -1.38 | -0.40 | -6.50 | -3.44 | 0.87 | |
| Henderson Australian Fixed Interest (Inst) | -0.97 | 0.26 | -7.05 | -2.88 | 0.89 | |
| Henderson Tactical Income | 0.64 | 1.96 | -0.08 | 1.21 | 1.82 | |
| Perpetual WFIA-Schroder Fixed Income | -1.42 | -0.36 | -7.36 | -3.67 | 0.12 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.34 | -0.78 | -6.66 | -4.01 | -0.07 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.20 | -0.11 | -6.40 | -3.48 | 0.58 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -0.83 | 0.32 | -3.11 | -1.71 | 0.84 |
| Realm High Income (Wholesale) | 0.68 | 4.16 | 3.37 | 3.50 | 3.74 | |
| Realm Strategic Income - Enduring Units | 0.78 | 2.20 | 6.38 | n/a | n/a | |
| SSgA Australian Fixed Income | -1.33 | -0.71 | -6.55 | -3.62 | 0.67 | |
| UBS Australian Bond Fund | -1.30 | -0.28 | -6.66 | -3.72 | 0.54 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.34 | -0.73 | -6.49 | -3.63 | 0.61 |
| Vanguard Australian Govt Bond Index | -1.48 | -1.02 | -7.12 | -4.08 | 0.53 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.33 | -0.69 | -6.37 | -3.44 | 0.82 |
*End of February 2023. Return in AUD after fees