The 10-year Australian Treasury bond yield trended lower at a fairly gradual pace over the first three weeks of July before dropping away at a faster pace over the remainder of the month at a quicker pace. By the end of it, the 3-year ACGB yield had shed 59bps to 2.77%, the 10-year yield had lost 64bps to 3.08% while the 20-year yield finished 49bps lower at 3.43%.
As a result, conditions facing fund managers in July switched from famine to feast. The Semi-Government Index was the best performer after it returned 3.61% for the month. The Treasury Index, representing Commonwealth bonds, produced the second-highest return of 3.55%, while the Composite Index, representing a mix of federal, state and corporate bonds was next with a return of 3.36%. The Corporate Bond Index returned 2.40% and the FRN Index returned 0.24%.
All 32 managers in the YieldReport survey produced positive results and the month’s median return was 3.37%.
The DDH Fixed interest Fund produced a return of 4.04% in the July survey, the highest return in the survey for the month. The Henderson Australian Fixed Interest (Institutional) Fund’s return was just behind it after producing a return of 3.99%, making it the second-highest returning fund in the sector. The Nikko AM Australian Bond Fund was next with a return of 3.82%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund in July. The Realm fund returned 5.12% while the next highest return came from the Altius Sustainable Bond Fund with a return of 4.76%. The Alexander Credit Opportunities Fund had the third-highest 12-month performance with a return of 4.09%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 3.51 | 0.39 | -10.85 | -2.79 | 0.22 | |
| AMP Capital Corporate Bond | ACA02 | 0.34 | -0.29 | -2.09 | 0.91 | 1.74 |
| Alexander Credit Opportunities Fund | 0.24 | 0.94 | 4.09 | 4.21 | 4.73 | |
| AMP Flex Lifetime S2-AMP Australian Bond | 3.34 | 0.15 | -10.85 | -2.62 | 0.60 | |
| AMP Generations BlackRock Aust Fixed Interest Index | 3.26 | 0.64 | -10.10 | -2.90 | 0.31 | |
| Altius Sustainable Bond Fund | 2.15 | 0.13 | 4.76 | 1.39 | 0.34 | |
| Artesian Corporate Bond Fund | 0.56 | -0.40 | -3.05 | 0.65 | 2.00 | |
| Pendal Enhanced Credit (Wholesale) | 2.20 | 0.17 | -7.97 | -0.91 | 1.65 | |
| BT Fixed Interest Retail | 1.40 | -1.12 | -11.27 | -3.07 | 0.14 | |
| Pendal Fixed Interest (Wholesale) | 3.39 | 0.81 | -9.51 | -1.89 | 1.19 | |
| Pendal Government Bond | 3.63 | 1.00 | -9.50 | -1.89 | 1.52 | |
| CFS Aberdeen Australian Fixed Interest | 3.45 | 0.67 | -10.08 | -2.58 | 0.37 | |
| CFS Wholesale Australian Bond | 3.48 | 0.49 | -9.35 | -1.75 | 1.26 | |
| DDH Fixed Interest | 4.04 | 1.18 | -9.36 | -1.67 | 1.38 | |
| Spectrum Strategic Income | SPE01 | 0.16 | 0.10 | -0.26 | 1.02 | 2.45 |
| Jamieson Coote Bonds Active | 3.60 | 1.01 | -10.05 | -2.36 | 1.29 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | 3.62 | 0.72 | -9.85 | -1.92 | 1.45 |
| Macquarie Australian Fixed Interest | 3.45 | 0.71 | -9.63 | -1.81 | 1.47 | |
| Mercer Australian Sovereign Bond Fund | 3.47 | 0.98 | -9.70 | -2.34 | 1.42 | |
| Nikko AM Australian Bond | 3.82 | 1.02 | -9.65 | -1.86 | 1.53 | |
| Henderson Australian Fixed Interest (Inst) | 3.99 | 0.74 | -10.56 | -1.55 | 1.47 | |
| Henderson Tactical Income | 1.99 | 0.31 | -1.98 | 0.91 | 1.79 | |
| Perpetual WFIA-Schroder Fixed Income | 3.42 | 0.50 | -10.63 | -2.13 | 0.76 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 3.31 | 0.84 | -9.44 | -2.59 | 0.49 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 3.56 | 0.56 | -9.95 | -2.06 | 1.15 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 2.58 | 0.96 | -5.36 | -0.66 | 1.32 |
| Realm High Income (Wholesale) | 1.99 | -0.07 | -0.98 | 2.70 | 3.17 | |
| Realm Strategic Income - Enduring Units | 0.44 | 1.06 | 5.12 | n/a | n/a | |
| SSgA Australian Fixed Income | 3.33 | 0.85 | -9.32 | -1.99 | 1.33 | |
| UBS Australian Bond Fund | 3.36 | 0.44 | -9.90 | -2.22 | 1.18 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 3.38 | 0.92 | -9.33 | -2.04 | 1.27 |
| Vanguard Australian Govt Bond Index | 3.54 | 0.93 | -9.75 | -2.26 | 1.24 | |
| Bloomberg AusBond Composite 0+YR AUD | 3.36 | 0.93 | -9.10 | -1.81 | 1.49 |
*End of July 2022. Return in AUD after fees