The 10-year Australian Treasury bond yield traded sideways for the first three weeks of September, ranging between 3.57% and 3.76%. It then began moving up in the last week and hit 4.13% before partially falling back in the final couple of days of the month. By this point, the 3-year ACGB yield had gained 30bps to 3.67%*, the 10-year yield had added 28bps to 3.92%* while the 20-year yield finished 24bps higher at 4.13%*.
* December futures
As a result, conditions facing fund managers in September were not quite as woeful as those in August but they were still tough. The FRN Index again was the best performer after it returned 0.12% for the month. The Corporate Bond Index produced the second-highest return of -1.01%, while the Composite Index, representing a mix of federal, state and corporate bonds was next with a return of -1.36%. The Treasury Index, representing Commonwealth bonds, returned -1.42% and the Semi-Government Index returned -1.45%.
Of the 31 managers in the YieldReport survey, only 3 produced positive results and the month’s median return was -1.44%.
The Realm Strategic Income (Enduring Units) Fund produced a return of 0.58% in the September survey, making it the highest returning fund for the month. The Alexander Credit Opportunities Fund’s return of 0.54% was the next-highest while the Spectrum Strategic Income Fund was third with a return of 0.28%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund in September. The Realm fund returned 5.14% while the next highest return came from the Alexander Credit Opportunities Fund with a return of 4.49%. The Spectrum Strategic Income Fund had the third-highest 12-month performance with a return of 0.03%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -1.53 | -0.70 | -13.13 | -4.37 | -0.49 | |
| AMP Capital Corporate Bond | ACA02 | -0.05 | 0.46 | -2.08 | 0.85 | 1.67 |
| Alexander Credit Opportunities Fund | 0.54 | 1.39 | 4.49 | 4.37 | 4.80 | |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.54 | -0.79 | -13.04 | -4.22 | -0.11 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -1.46 | -0.94 | -12.36 | -4.49 | -0.42 | |
| Altius Sustainable Bond Fund | -0.79 | 0.22 | -6.08 | -2.06 | -0.06 | |
| Artesian Corporate Bond Fund | -0.20 | 0.74 | -2.88 | 0.59 | 1.87 | |
| Pendal Enhanced Credit (Wholesale) | -0.88 | -0.04 | -9.27 | -1.87 | 1.18 | |
| BT Fixed Interest Retail | n/a | 1.40 | -9.98 | -3.34 | 0.24 | |
| Pendal Fixed Interest (Wholesale) | -1.49 | -0.70 | -11.80 | -3.54 | 0.43 | |
| Pendal Government Bond | -1.52 | -0.64 | -11.84 | -3.60 | 0.74 | |
| CFS Aberdeen Australian Fixed Interest | -1.56 | -0.70 | -12.37 | -4.12 | -0.33 | |
| CFS Wholesale Australian Bond | -1.39 | -0.54 | -11.58 | -3.33 | 0.54 | |
| DDH Fixed Interest | -1.59 | -0.35 | -11.91 | -3.38 | 0.59 | |
| Spectrum Strategic Income | SPE01 | 0.28 | 0.67 | 0.03 | 1.06 | 2.43 |
| Jamieson Coote Bonds Active | -1.46 | -0.68 | -12.36 | -4.11 | 0.49 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.52 | -0.58 | -12.25 | -3.60 | 0.65 |
| Macquarie Australian Fixed Interest | -1.27 | -0.29 | -11.76 | -3.37 | 0.80 | |
| Mercer Australian Sovereign Bond Fund | -1.43 | -0.76 | -11.96 | -4.10 | 0.68 | |
| Nikko AM Australian Bond | -1.85 | -0.94 | -12.49 | -3.71 | 0.65 | |
| Henderson Australian Fixed Interest (Inst) | -1.65 | -0.38 | -13.16 | -3.19 | 0.65 | |
| Henderson Tactical Income | -0.54 | 0.98 | -3.03 | 0.56 | 1.53 | |
| Perpetual WFIA-Schroder Fixed Income | -1.53 | -0.91 | -13.04 | -3.80 | 0.02 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -1.51 | -0.82 | -11.68 | -4.13 | -0.22 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.48 | -0.45 | -12.09 | -3.58 | 0.44 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -1.18 | -0.29 | -7.04 | -1.78 | 0.75 |
| Realm High Income (Wholesale) | -1.18 | 0.66 | -2.58 | 2.02 | 2.81 | |
| Realm Strategic Income - Enduring Units | 0.58 | 1.53 | 5.14 | n/a | n/a | |
| SSgA Australian Fixed Income | -1.39 | -0.69 | -11.55 | -3.60 | 0.60 | |
| UBS Australian Bond Fund | -1.41 | -0.54 | -12.04 | -3.77 | 0.46 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -1.45 | -0.71 | -11.56 | -3.63 | 0.52 |
| Vanguard Australian Govt Bond Index | -1.44 | -0.78 | -12.10 | -3.98 | 0.48 | |
| Bloomberg AusBond Composite 0+YR AUD | -1.36 | -0.65 | -11.36 | -3.42 | 0.75 |
*End of September 2022. Return in AUD after fees