Conditions facing global fund managers in August remained favourable, although not quite as lucrative as they had been in July. Long-term US Treasury bond yields finished lower following falls in the previous three months while yields in major European countries finished largely unchanged. However, the Aussie dollar was stronger against all the major currencies with the exception of the yen. All bar one of the 27 funds in the YieldReport survey finished the month with a positive return.
The median 1 month performance in the YieldReport survey of global bond funds in August was 0.98% (July: 1.73%) while the median return over the 12 months including August was 6.36% (July: 5.17%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 1.01% over the month and 5.86% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield shed 35bps to 3.91%, the 10-year yield lost 13bps to 3.90% while the 30-year yield finished 12bps lower at 4.19%. BBB corporate spreads tightened slightly.
In other major bond markets, the German 10-year bund yield returned to its starting point at 2.30% while the French 10-year OAT yield also finished unchanged, at 3.01%. The 10-year UK gilt yield finished the month 1bp higher at 4.09%.
The best performing global fund for the month in the YieldReport August survey was the Legg Mason Brandywine Global Opportunistic Fixed Income Fund which produced a return of 1.70%. The second-highest return for the month, 1.54%, was produced by the Macquarie Core Australian Fixed Interest Plus Fund. The Bentham Wholesale High Yield Fund ranked third with a return of 1.34%.
In terms of fund performance for the twelve months to the end of August, the Bentham Professional Global Income Fund retained the title as highest performing fund. It produced 12-month return of 11.26% while the Bentham Wholesale High Yield Fund retained second place with a return of 11.14%. The UBS Global Credit Fund took third position after it returned 8.24%.
| FUND NAME | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 0.68 | 3.22 | 6.52 | -2.55 | -1.11 | |
| ANZ-CFS Global Credit Income EF | 0.59 | 1.47 | 5.88 | 2.27 | 1.47 | |
| Ardea Real Outcome Fund | -0.23 | 0.02 | -1.14 | 1.00 | 1.93 | |
| Bentham Professional Global Income | mFund | 1.14 | 4.68 | 11.26 | 4.43 | 4.72 |
| Bentham Wholesale High Yield | mFund | 1.34 | 3.97 | 11.14 | 2.39 | 3.08 |
| Kapstream Wholesale Absolute Return Income | mFund | 0.71 | 2.31 | 6.75 | 3.04 | 2.20 |
| Dimensional Five-Year Diversified Fixed Interest | 0.37 | 1.14 | 4.40 | -0.81 | -0.19 | |
| Dimensional Global Bond Trust | 1.22 | 3.67 | 7.20 | -2.91 | -0.98 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.37 | 1.14 | 4.54 | 0.91 | 0.84 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | 0.89 | 3.72 | 4.96 | -2.02 | -0.81 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.30 | 1.60 | 7.17 | 4.06 | 4.12 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | 1.70 | 3.88 | 3.69 | -2.78 | -0.01 |
| Macquarie Global Income Opportunities Fund | 1.15 | 4.13 | 5.29 | -3.28 | -0.68 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 0.97 | 2.66 | 7.06 | 1.34 | 1.79 | |
| Mercer Global Credit Fund | 1.54 | 4.48 | 6.98 | -2.66 | -0.78 | |
| Mercer Global Sovereign Bond Fund | 1.00 | 3.93 | 7.71 | -2.94 | -0.51 | |
| PIMCO Global Bond (Wholesale) | mFund | 1.03 | 3.25 | 4.30 | -2.52 | -1.06 |
| PIMCO Global Credi (Wholesale) | mFund | 0.43 | 2.69 | 6.70 | -2.01 | -0.15 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 1.01 | 3.86 | 7.25 | -2.28 | -0.23 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | 0.80 | 3.07 | 6.26 | -1.85 | -0.28 |
| State Street SSgA Global Fixed Income Trust | 1.08 | 3.58 | 4.62 | -3.50 | -1.79 | |
| T.Rowe Price Dynamic Global Bond Fund | 0.40 | 0.20 | 1.92 | -0.14 | 1.99 | |
| UBS Global Credit Fund | 1.32 | 4.10 | 8.24 | -3.20 | -0.32 | |
| UBS International Bond | 1.20 | 3.91 | 6.36 | -2.46 | -0.78 | |
| Vanguard International Credit Securities Index (Hedged) | 0.99 | 3.67 | 6.97 | -2.84 | -0.84 | |
| Vanguard International Fixed Interest Index (Hedged) | 0.87 | 3.48 | 4.45 | -3.06 | -1.64 |
*End of August 2024. Return in AUD after fees