The 10-year Australian Treasury bond yield fell consistently through the first week and a half of December before reversing course over the next week. It then trended sideways until the end of the month. By this point, the 3-year ACGB yield had lost 10bps to 3.81%, the 10-year yield had gained 5bps to 4.40% while the 20-year yield 11bps higher at 4.79%.
As a result, conditions facing fund managers in December were testing but still conducive to positive returns. The Bloomberg Ausbond Semi-Government Index was again the best performer after it returned 1.48% for the month. The Corporate Bond Index produced the second-highest return of 0.71% while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of 0.51%. The FRN Index ranked fourth after it produced a return of 0.43% while the Treasury Index, representing Commonwealth bonds, returned 0.37%.
All 31 funds in the YieldReport December survey for this segment produced positive results and the month’s median return was 0.54%.
The Realm Strategic Income (Enduring Units) Fund produced a return of 0.82%, making it the highest returning fund for the month. Realm’s High Income (Wholesale) Fund ranked second with a return of 0.76% while the PIMCO Australian Bond (Wholesale) Fund was third after it returned 0.72%.
On a 12-month basis, Realm’s Strategic Income Fund took over the title as the highest performing fund in this segment. The fund returned 10.49% over the year while the next-highest return came from Realm’s High Income Fund with a return of 10.07%. The Alexander Credit Opportunities Fund retained third place after it produced a 12-month return of 9.18%.
| FUND NAME | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 0.42 | -0.44 | 2.52 | -1.58 | -0.80 | |
| Alexander Credit Opportunities | 0.72 | 2.04 | 9.18 | 7.41 | 6.18 | |
| AMP Flex Lifetime S2-AMP Australian Bond | 0.34 | -0.53 | 2.34 | -1.61 | -0.72 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 0.47 | -0.41 | 2.34 | -1.49 | -1.05 | |
| Altius Sustainable Bond | 0.57 | 0.66 | 4.50 | 1.86 | 1.19 | |
| Artesian Corporate Bond | 0.63 | 1.76 | 7.09 | 4.46 | 3.36 | |
| Pendal Enhanced Credit (Wholesale) | 0.11 | 0.22 | 4.73 | 1.40 | 1.43 | |
| Pendal Fixed Interest (Wholesale) | 0.50 | -0.26 | 2.93 | -0.85 | -0.13 | |
| Pendal Government Bond | 0.43 | -0.53 | 2.42 | -1.13 | -0.26 | |
| CFS Aberdeen Australian Fixed Interest | 0.57 | -0.23 | 3.04 | -0.85 | -0.38 | |
| CFS Wholesale Australian Bond | 0.56 | -0.24 | 3.30 | -0.72 | 0.05 | |
| DDH Fixed Interest | 0.56 | -0.29 | 3.06 | -0.79 | -0.04 | |
| Spectrum Strategic Income | SPE01 | 0.59 | 1.66 | 6.40 | 4.13 | 3.15 |
| Jamieson Coote Bonds Active | 0.24 | -0.96 | 1.62 | -1.81 | -0.96 | |
| Legg Mason Western Asset Australian Bond | LMA04 | 0.54 | -0.19 | 3.45 | -0.58 | 0.04 |
| Macquarie Australian Fixed Interest | 0.49 | -0.28 | 3.13 | -0.48 | 0.09 | |
| Mercer Australian Sovereign Bond | 0.36 | -0.66 | 2.13 | -1.64 | -0.86 | |
| MLC Wholesale Horizon 1 Bond Portfolio | 0.42 | 1.11 | 6.32 | 3.40 | 2.23 | |
| Yarra Australian Bond | 0.64 | -0.18 | 3.41 | -0.47 | 0.06 | |
| Henderson Australian Fixed Interest (Inst) | 0.53 | -0.34 | 3.44 | -0.77 | 0.40 | |
| Henderson Tactical Income | 0.55 | 0.93 | 5.16 | 3.25 | 2.84 | |
| Perpetual WFIA-Schroder Fixed Income | 0.67 | -0.26 | 3.78 | -0.99 | -0.20 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 0.50 | -0.33 | 2.57 | -1.17 | -0.70 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 0.72 | 0.12 | 3.75 | -0.52 | -0.06 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.65 | 0.48 | 4.47 | 1.22 | 1.03 |
| Realm High Income (Wholesale) | 0.76 | 2.26 | 10.07 | 6.88 | 5.74 | |
| Realm Strategic Income - Enduring Units | 0.82 | 2.36 | 10.49 | 8.72 | n/a | |
| SSgA Australian Fixed Income | 0.43 | -0.34 | 2.77 | -0.93 | -0.32 | |
| UBS Australian Bond | 0.68 | -0.41 | 3.75 | -0.40 | -0.01 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 0.51 | -0.31 | 2.78 | -0.98 | -0.36 |
| Vanguard Australian Govt Bond Index | 0.46 | -0.51 | 2.24 | -1.51 | -0.73 | |
| Bloomberg AusBond Composite 0+YR AUD | 0.51 | -0.26 | 2.93 | -0.79 | -0.18 |
*End of December 2024. Return in AUD after fees