The 10-year Australian Treasury bond yield ran up hard in the first few days of May. It then fluctuated sideways in a 20bps band for a week or so before trending down until the end of the month. By this point, the 3-year ACGB yield had added 7bps to 2.93%, the 10-year yield had gained 19bps to 3.36% while the 20-year yield finished 25bps higher at 3.69%. As a result, conditions facing fund managers in May remained challenging. The FRN Index was again the best performer after it returned -0.08% for the month. The Corporate Bond Index produced the second-highest return for a second consecutive month, -0.31%, while the Composite Index, representing a mix of federal, state and corporate bonds was next with a return of -0.89%. The return of the Semi-Government Index was not far behind at -0.94% while the Treasury Index, representing Commonwealth bonds, returned -1.00%.
Only 3 out of 32 managers in the YieldReport survey produced positive results and the month’s median return was -0.91%.
The Alexander Credit Opportunities Fund produced a return of 0.37% in the May survey to take the title as the best performing fund for the month. The Realm Strategic Income (Enduring Units) Fund produced a return of 0.34%, making it the second-highest returning fund in the sector while Spectrum’s Strategic Income Fund was next with a return of 0.06%.
On a 12-month basis, the Realm Strategic Income Fund (Enduring Units) retained its title as the highest performing fund in May. The Realm fund returned 5.32% while the next highest return again came from the Alexander Credit Opportunities Fund with a return of 4.50%. The Realm High Income (Wholesale) Fund had the third-highest 12-month performance (again) with a return of 0.14%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | -1.15 | -7.01 | -10.12 | -2.73 | -0.26 | |
| AMP Capital Corporate Bond | ACA02 | -0.12 | -1.10 | -1.67 | 1.17 | 1.88 |
| Alexander Credit Opportunities Fund | 0.37 | 0.87 | 4.50 | 4.36 | 4.85 | |
| Alpha Enhanced Yield | IWM05 | n/a | -2.44 | -6.11 | -1.96 | -0.94 |
| AMP Flex Lifetime S2-AMP Australian Bond | -1.21 | -7.03 | -9.73 | -2.42 | 0.17 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -0.98 | -6.28 | -9.56 | -2.86 | -0.18 | |
| Altius Bond Fund | n/a | n/a | n/a | n/a | n/a | |
| Artesian Corporate Bond Fund | -0.27 | -1.97 | -2.57 | 1.07 | 2.28 | |
| Pendal Enhanced Credit (Wholesale) | -0.58 | -4.80 | -7.39 | -0.57 | 1.47 | |
| BT Fixed Interest Retail | -0.90 | -6.27 | -8.98 | -2.41 | 0.03 | |
| Pendal Fixed Interest (Wholesale) | -0.85 | -6.34 | -8.83 | -1.67 | 0.69 | |
| Pendal Government Bond | -0.91 | -6.47 | -8.74 | -1.79 | 0.97 | |
| CFS Aberdeen Australian Fixed Interest | -0.96 | -6.33 | -9.63 | -2.53 | -0.14 | |
| CFS Wholesale Australian Bond | -0.95 | -6.15 | -8.73 | -1.51 | 0.82 | |
| DDH Fixed Interest | -1.06 | -6.40 | -9.29 | -1.76 | 0.78 | |
| Spectrum Strategic Income | SPE01 | 0.06 | -0.46 | 0.03 | 1.39 | 2.59 |
| Jamieson Coote Bonds Active | -1.13 | -6.62 | -9.43 | -2.35 | 0.72 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | -1.01 | -6.57 | -9.20 | -1.81 | 1.00 |
| Macquarie Australian Fixed Interest | -1.01 | -6.50 | -8.95 | -1.71 | 0.98 | |
| Mercer Australian Sovereign Bond Fund | -1.03 | -6.47 | -8.90 | -2.28 | 0.82 | |
| Nikko AM Australian Bond | -0.80 | -6.38 | -8.88 | -1.73 | 1.04 | |
| Henderson Australian Fixed Interest (Inst) | -1.15 | -7.41 | -9.78 | -1.56 | 0.98 | |
| Henderson Tactical Income | -0.49 | -2.61 | -2.52 | 0.87 | 1.70 | |
| Perpetual WFIA-Schroder Fixed Income | -1.30 | -6.70 | -10.07 | -2.12 | 0.24 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | -0.83 | -6.01 | -8.83 | -2.57 | -0.01 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | -1.04 | -6.35 | -9.36 | -1.92 | 0.70 |
| PIMCO Australian Focus (Wholesale) | PMF05 | -0.42 | -3.33 | -5.53 | -0.71 | 1.03 |
| Realm High Income (Wholesale) | -0.05 | -1.21 | 0.14 | 3.31 | 3.32 | |
| Realm Strategic Income - Enduring Units | 0.34 | 0.94 | 5.32 | n/a | n/a | |
| SSgA Australian Fixed Income | -0.90 | -6.08 | -8.70 | -1.93 | 0.85 | |
| UBS Australian Bond Fund | -1.09 | -6.39 | -9.08 | -2.08 | 0.75 | |
| Vanguard Australian Fixed Interest Index | UAM04 | -0.83 | -6.01 | -8.72 | -1.97 | 0.78 |
| Vanguard Australian Govt Bond Index | -0.99 | -6.38 | -9.13 | -2.22 | 0.68 | |
| Bloomberg AusBond Composite 0+YR AUD | -0.89 | -6.02 | -8.54 | -1.76 | 0.99 |
*End of May 2022. Return in AUD after fees