Conditions were just as bountiful for global fund managers in November as they were tough in October. Longer-term US Treasury bond yields finished the month noticeably lower, as did yields in the UK and major euro-zone economies. The Aussie dollar was weaker against the USD, euro, sterling and yen. 23 out of 34 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 November was 0.19% (October: -0.47%) while the median return over the 12 months including November came to -0.95% (October: +0.05%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned -0.01% in November and -1.18% over the rolling year (when hedged into Australian dollars).
In US markets, the 2-year Treasury yield gained 6bps to 0.56% over the month while the 10-year yield lost 11bps to 1.45% and the 30-year yield shed 14bps to 1.79%. BBB spreads finished moderately higher.
In other major bond markets, the German 10-year bond yield fell by 24bps to -0.34% and the French 10-year shed 23bps to +0.03%. The 10-year UK gilt yield finished the month 20bps lower at 0.77%.
The best performing global fund for the month in the YieldReport November survey was the Macquarie Core Australian Fixed Interest Plus Fund. It produced a return of +2.05% for the month following a “worst-in-class” return of -3.60% in October and a near worst-in-class return of -1.61% in September.
The second-highest return was produced by the State Street Global Fixed Income Index Trust. Its return of +1.23% followed a top-quartile return of -0.14% in October and a bottom-quartile return of -1.21% in September.
In terms of fund performance for the twelve months to the end of November, the Invesco Wholesale Senior Secured Income Fund retained its title as the highest performing fund for a ninth consecutive month. The Invesco fund produced a 12-month return of 9.06%, while the Bentham Professional Syndicated Loan Fund was next after it produced a 12-month return of 5.79%.
| GLOBAL BOND FUNDS | ASX mFund | 1m (%) | 3m (%) | 1y (%) | 3y (%) | 5y (%) |
|---|---|---|---|---|---|---|
| Advance International Fixed Interest Multi-Blend | 0.16 | -1.33 | -1.96 | 3.30 | 2.18 | |
| Alpha Diversified Income | mFund | n/a | -0.15 | -0.31 | 2.09 | 1.84 |
| AMP Future Directions International Bond Fund | 0.59 | -1.10 | -2.61 | 3.26 | 2.41 | |
| AMP Capital International Bond | 0.63 | -0.99 | -2.09 | 3.79 | 2.94 | |
| ANZ-CFS Global Credit Income EF | -0.68 | -0.67 | 0.63 | 0.41 | 0.75 | |
| Ardea Real Outcome Fund | 0.08 | -1.11 | -1.13 | 4.42 | 4.43 | |
| Bentham Professional Global Income | mFund | -0.20 | 0.47 | 5.17 | 3.74 | 4.64 |
| Bentham Wholesale High Yield | mFund | -0.44 | -1.01 | 4.59 | 5.17 | 5.16 |
| Bentham Syndicated Loan ASX Class | mFund | 0.15 | 0.43 | 5.79 | 2.71 | 3.80 |
| Kapstream Wholesale Absolute Return Income | mFund | -0.19 | -0.34 | 0.08 | 1.61 | 2.07 |
| BlackRock Wholesale International Bond | 0.63 | -0.73 | -0.68 | 4.72 | 3.50 | |
| Pendal Enhanced Global Fixed Interest (Wholesale) | n/a | -2.43 | -4.32 | 3.04 | 2.20 | |
| CFS Wholesale Global Corporate Bond | 0.03 | -1.10 | -1.66 | 6.42 | 4.65 | |
| Dimensional Five-Year Diversified Fixed Interest | 0.52 | -2.05 | -1.39 | 1.18 | 1.47 | |
| Dimensional Global Bond Trust | 1.01 | -1.68 | -2.06 | 4.56 | 3.72 | |
| Dimensional Two-Year Diversified Fixed Interest | 0.23 | -0.95 | -0.82 | 1.06 | 1.23 | |
| Franklin Templeton Global Aggregate Bond Fund (W Class) | -0.17 | -1.75 | -3.19 | 4.28 | 2.73 | |
| Franklin Templeton Multisector Bond (Institutional) | -2.40 | -5.24 | -5.41 | -5.31 | -2.01 | |
| Invesco Wholesale Senior Secured Income | mFund | 0.03 | 0.96 | 9.06 | 3.99 | 4.02 |
| Legg Mason Brandywine Global Opp Fixed Income A | mFund | 0.34 | -1.56 | 0.76 | 4.81 | 3.70 |
| Legg Mason Western Asset Global Bond Fund | -0.29 | -1.26 | -0.81 | 5.10 | n/a | |
| Legg Mason Western Asset Macro Opportunities Bond Fund | -1.66 | 3.02 | -1.47 | 7.18 | 5.61 | |
| Macquarie Global Income Opportunities Fund | 0.26 | -0.96 | 0.47 | 3.33 | 3.09 | |
| Macquarie Core Australian Fixed Interest Plus Fund | 2.05 | -3.21 | -2.29 | 5.08 | 4.32 | |
| Mercer Global Credit Fund | -0.05 | -1.22 | -0.81 | 5.49 | 3.97 | |
| Mercer Global Sovereign Bond Fund | 0.79 | -0.67 | -1.61 | 4.63 | 3.83 | |
| Omega Global Corporate Bond | n/a | -4.57 | -5.98 | 2.91 | 2.40 | |
| PIMCO Global Bond (Wholesale) | mFund | 0.41 | -1.03 | -0.55 | 4.44 | 3.82 |
| PIMCO Global Credi (Wholesale) | mFund | 0.23 | -1.10 | -0.09 | 4.49 | 3.71 |
| PIMCO Diversified Fixed Interest Wholesale | mFund | 1.06 | -2.20 | -2.12 | 3.79 | 3.42 |
| PIMCO Unconstrained Bond (Wholesale) | mFund | -0.26 | -1.42 | 0.51 | 2.72 | 3.10 |
| State Street SSgA Global Fixed Income Trust | 1.23 | -0.14 | -1.43 | 4.05 | 3.09 | |
| T.Rowe Price Dynamic Global Bond Fund | -0.79 | -1.54 | 0.78 | 2.69 | 1.82 | |
| UBS Global Credit Fund | 0.10 | -1.56 | -0.89 | 6.38 | 4.61 | |
| UBS International Bond | 0.42 | -1.02 | -1.11 | 4.07 | 3.21 | |
| Vanguard International Credit Securities Index (Hedged) | 0.40 | -0.88 | -0.95 | 5.02 | 3.87 | |
| Vanguard International Fixed Interest Index (Hedged) | 1.17 | -0.35 | -1.53 | 3.53 | 2.84 |