In Australia, the 10-year Treasury bond yield fell around 15bps over the first week, only to retrace this fall over two days at the start of the next week. It then fell away at a gentle pace for much of the remainder of the month before rising over the last few days of it. By this point, the 3-year ACGB yield had gained 14bps to 1.19%, the 10-year yield had added 2bps to 1.72% while the 20-year yield finished 14bps higher at 2.31%.
Conditions facing fund managers in December were not easy but at least there was room to keep returns above zero. The Semi-Government Index was the best performer after it returned 0.28% for the month. The Corporate Bond Index produced the second-highest return, 0.19%, while the Composite Index, representing a mix of federal, state and corporate bonds, was next with a return of 0.09%. The return of the FRN Index was about half this at 0.04% while the Treasury Index, representing Commonwealth bonds, returned -0.03%.
31 out of 33 managers in the YieldReport survey produced positive results and the month’s median return was 0.14%.
The Alpha Enhanced Yield Fund produced a return of 0.69%, thus making it the highest performing fund in the December survey. The Realm Strategic Income (Enduring Units) Fund’s return of 0.50% was the second highest for the month while Alexander Credit Opportunities Fund was next with a return of 0.36%.
On a 12-month basis, the Realm StrateOn a 12-month basis, the Realm Strategic Income Fund (Enduring Units) Fund retained its title as the highest performing fund in December. The Realm fund returned 5.86% while the next highest return came from the Alexander Credit Opportunities Fund with a return of 5.19%. The Realm High Income (Wholesale) Fund had the third-highest 12-month performance with a return of 2.86%.
| AUSTRALIAN FIXED INTEREST | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance Aus Fixed Intr Multi-Blend | 0.14 | -1.59 | -3.55 | 2.13 | 2.30 | |
| AMP Capital Corporate Bond | ACA02 | 0.01 | -0.46 | 0.72 | 2.32 | 2.56 |
| Alexander Credit Opportunities Fund | 0.36 | 1.08 | 5.19 | 4.50 | 5.03 | |
| Alpha Enhanced Yield | IWM05 | 0.69 | 1.55 | 2.68 | 1.31 | 1.10 |
| AMP Flex Lifetime S2-AMP Australian Bond | 0.16 | -1.46 | -3.19 | 2.55 | 2.73 | |
| AMP Generations BlackRock Aust Fixed Interest Index | -0.01 | -1.74 | -3.98 | 1.68 | 2.15 | |
| Altius Bond Fund | 0.06 | -1.26 | -2.64 | 0.98 | 1.48 | |
| Artesian Corporate Bond Fund | 0.10 | -0.60 | 0.25 | 2.67 | n/a | |
| Pendal Enhanced Credit (Wholesale) | 0.19 | -1.64 | -1.98 | 3.08 | 3.47 | |
| BT Fixed Interest Retail | 0.09 | -1.37 | -3.29 | 2.15 | 2.43 | |
| Pendal Fixed Interest (Wholesale) | 0.26 | -1.26 | -3.52 | 2.95 | 3.15 | |
| Pendal Government Bond | 0.18 | -1.08 | -3.06 | 3.20 | 3.57 | |
| CFS Aberdeen Australian Fixed Interest | 0.19 | -1.73 | -3.60 | 1.96 | 2.26 | |
| CFS Wholesale Australian Bond | 0.10 | -1.27 | -3.02 | 3.05 | 3.16 | |
| DDH Fixed Interest | 0.08 | -1.56 | -3.09 | 3.05 | 3.28 | |
| Spectrum Strategic Income | SPE01 | 0.14 | 0.13 | 1.51 | 2.60 | 3.25 |
| Jamieson Coote Bonds Active | -0.01 | -1.77 | -3.76 | 2.79 | 3.29 | |
| Legg Mason Western Asset Australian Bond Trust | LMA04 | 0.20 | -1.46 | -2.93 | 3.08 | 3.56 |
| Macquarie Australian Fixed Interest | 0.11 | -1.69 | -3.06 | 3.06 | 3.44 | |
| Mercer Australian Sovereign Bond Fund | 0.06 | -1.44 | -3.52 | 2.85 | 3.38 | |
| Nikko AM Australian Bond | 0.11 | -1.48 | -3.09 | 3.06 | 3.53 | |
| Henderson Australian Fixed Interest (Inst) | 0.22 | -1.29 | -2.51 | 3.59 | 3.79 | |
| Henderson Tactical Income | 0.04 | 0.01 | 0.02 | 2.44 | 2.67 | |
| Perpetual WFIA-Schroder Fixed Income | 0.19 | -1.92 | -2.91 | 2.74 | 2.64 | |
| Perpetual WFIA-Vanguard Aust Fixed Interest Index | 0.13 | -1.40 | -3.07 | 1.89 | 2.24 | |
| PIMCO Australian Bond (Wholesale) | PMF04 | 0.35 | -1.56 | -3.00 | 2.87 | 3.14 |
| PIMCO Australian Focus (Wholesale) | PMF05 | 0.31 | -0.73 | -1.67 | 2.18 | 2.56 |
| Realm High Income (Wholesale) | 0.23 | 0.18 | 2.86 | 4.79 | 4.00 | |
| Realm Strategic Income - Enduring Units | 0.50 | 1.50 | 5.86 | n/a | n/a | |
| SSgA Australian Fixed Income | 0.16 | -1.43 | -2.99 | 2.75 | 3.23 | |
| UBS Australian Bond Fund | 0.27 | -1.51 | -3.21 | 2.66 | 3.27 | |
| Vanguard Australian Fixed Interest Index | UAM04 | 0.14 | -1.39 | -2.97 | 2.68 | 3.16 |
| Vanguard Australian Govt Bond Index | 0.07 | -1.44 | -3.28 | 2.70 | 3.15 | |
| Bloomberg AusBond Composite 0+YR AUD | 2.18 | -1.46 | -2.88 | 2.87 | 3.36 |
*End of December 2021. Return in AUD after fees