The 10-year Australian Treasury bond yield declined in trend terms over the first week or so of December before trending up over the remainder of the month. By the end of December, the 3-year ACGB yield had gained 25bps to 3.59%, the 10-year yield had added 31bps to 4.08% while the 20-year yield finished 26bps higher at 4.36%.
As a result, conditions facing fund managers in December were pretty tough. The FRN Index was the best performer after it returned 0.34% for the month. The Corporate Bond Index produced the second-highest return of -0.62%, while the Composite Index, representing a mix of federal, state and corporate bonds was next with a return of -2.06%. The Semi-Government Index returned -2.34% and The Treasury Index, representing Commonwealth bonds, returned -2.37%.
Of the 31 managers in the YieldReport survey, 10 produced positive results and the month’s median return was -2.37%.
The Henderson Tactical Income Fund produced a return of 1.65% in the December survey, making it the highest returning fund for the month. The Spectrum Strategic Income Fund’s return of 1.34% was the next-highest while the Realm High Income (Wholesale) Fund was third with a return of 1.29%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund in December. The Realm fund returned 5.62% while the next highest return again came from the Alexander Credit Opportunities Fund with a return of 5.03%. Spectrum’s Strategic Income Fund again had the third-highest 12-month performance with a return of 1.37%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -0.48 | -1.32 | -10.56 | -4.22 | -0.79 | |
| AMP Capital Corporate Bond | ACA02 | 0.95 | 1.05 | -0.49 | 1.07 | 1.73 |
| Alexander Credit Opportunities Fund | 0.61 | 1.61 | 5.03 | 4.59 | 4.83 | |
| AMP Flex Lifetime S2-AMP Australian Bond | -0.29 | -1.20 | -10.46 | -4.07 | -0.40 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -0.68 | -1.33 | -9.90 | -4.37 | -0.72 | |
| Altius Sustainable Bond Fund | -0.53 | 1.08 | -4.54 | -1.44 | 0.05 | |
| Artesian Corporate Bond Fund | 1.23 | 0.83 | -1.10 | 0.76 | 1.85 | |
| Pendal Enhanced Credit (Wholesale) | 0.62 | 0.22 | -6.05 | -1.58 | 1.06 | |
| Pendal Fixed Interest (Wholesale) | -0.31 | -0.91 | -9.18 | -3.35 | 0.19 | |
| Pendal Government Bond | -0.67 | -1.11 | -9.56 | -3.47 | 0.41 | |
| CFS Aberdeen Australian Fixed Interest | -0.20 | -1.12 | -9.50 | -3.95 | -0.61 | |
| CFS Wholesale Australian Bond | -0.32 | -0.97 | -9.23 | -3.16 | 0.27 | |
| DDH Fixed Interest | -0.47 | -1.34 | -9.45 | -3.31 | 0.22 | |
| Spectrum Strategic Income | SPE01 | 1.34 | 1.73 | 1.37 | 1.43 | 2.51 |
| Jamieson Coote Bonds Active | -2.37 | 0.10 | -10.69 | -3.48 | 0.21 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -0.39 | -1.15 | -9.66 | -3.48 | 0.32 |
| Macquarie Australian Fixed Interest | -0.27 | -0.72 | -8.92 | -3.22 | 0.51 | |
| Mercer Australian Sovereign Bond Fund | -0.96 | -1.23 | -9.66 | -3.99 | 0.26 | |
| Nikko AM Australian Bond | -0.13 | -0.79 | -9.36 | -3.41 | 0.44 | |
| Henderson Australian Fixed Interest (Inst) | 0.06 | -1.02 | -10.44 | -3.03 | 0.38 | |
| Henderson Tactical Income | 1.65 | 0.90 | -1.47 | 0.88 | 1.64 | |
| Perpetual WFIA-Schroder Fixed Income | -0.29 | -1.35 | -10.19 | -3.70 | -0.26 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -0.68 | -1.16 | -9.25 | -3.97 | -0.49 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -0.06 | -0.96 | -9.16 | -3.48 | 0.12 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.52 | -0.52 | -5.03 | -1.64 | 0.63 |
| Realm High Income (Wholesale) | 1.29 | 3.13 | 0.30 | 2.79 | 4.16 | |
| Realm Strategic Income - Enduring Units | 0.67 | 1.96 | 5.62 | n/a | n/a | |
| SSgA Australian Fixed Income | -0.56 | -1.04 | -9.07 | -3.49 | 0.27 | |
| UBS Australian Bond Fund | -0.26 | -1.15 | -9.45 | -3.69 | 0.10 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -0.59 | -1.08 | -9.11 | -3.53 | 0.21 |
| Vanguard Australian Govt Bond Index | -0.92 | -1.29 | -9.83 | -3.91 | 0.09 | |
| Bloomberg AusBond Composite 0+YR AUD | -2.06 | 0.38 | -9.71 | -2.87 | 0.54 |
*End of December 2022. Return in AUD after fees