Conditions facing global fund managers in September remained favourable. Long-term US Treasury bond yields finished lower for a fifth consecutive month while yields in major European countries also generally finished lower. 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 September was 0.88% (August: 0.98%) while the median return over the 12 months including September was 8.92% (August: 6.36%). The Barclays Global Aggregate Bond Index, a widely-used index in this sector, returned 1.01% over the month and 9.34% over the rolling year (when hedged into Australian dollars).

In US markets, the 2-year Treasury yield shed 27bps to 3.64%, the 10-year yield lost 12bps to 3.78% while the 30-year yield finished 7bps lower at 4.12%. BBB corporate spreads tightened slightly again.

In other major bond markets, the German 10-year bund yield lost 18bps to 2.12% while the French 10-year OAT yield finished 8bps lower at 2.93%. The 10-year UK gilt yield finished the month unchanged at 4.09%.

The best performing global fund for the month in the YieldReport September survey was the Western Asset Global Bond Fund which produced a return of 1.46%. The second-highest return for the month, 1.44%, was produced by the Legg Mason Brandywine Global Opportunistic Fixed Income Fund. The UBS Global Credit Fund ranked third with a return of 1.35%.

In terms of fund performance for the twelve months to the end of September, the Bentham Wholesale High Yield Fund took over the title as highest performing fund from sibling fund Bentham Professional Global Income. The former produced a 12-month return of 12.78% and the latter was next with a return of 12.40%. The UBS Global Credit Fund retained third position after it returned 12.15%.

FUND NAME	ASX mFund	1m (%)	3m (%)	1y (%)	3y (%)	5y (%)
Advance International Fixed Interest Multi-Blend		0.98	3.60	9.65	-1.90	-0.81
ANZ-CFS Global Credit Income EF		0.32	1.96	6.23	2.35	1.49
Ardea Real Outcome Fund		0.28	0.21	-1.05	1.27	1.93
Bentham Professional Global Income	mFund	0.54	4.25	12.40	4.44	4.78
Bentham Wholesale High Yield	mFund	0.57	3.66	12.78	2.58	3.12
Kapstream Wholesale Absolute Return Income	mFund	0.68	2.34	7.16	3.27	2.35
Dimensional Five-Year Diversified Fixed Interest		0.49	1.37	6.25	3.67	3.02
Dimensional Global Bond Trust		1.06	2.75	7.48	3.73	3.65
Dimensional Two-Year Diversified Fixed Interest		0.31	3.09	7.47	-1.21	-0.26
Franklin Templeton Global Aggregate Bond Fund (W Class)		1.29	4.48	9.12	-1.35	-0.49
Invesco Wholesale Senior Secured Income	mFund	0.90	1.99	7.56	4.09	4.27
Legg Mason Brandywine Global Opp Fixed Income A	mFund	1.44	5.22	10.19	-1.78	0.18
Macquarie Global Income Opportunities Fund		1.46	4.94	10.14	-2.50	-0.39
Macquarie Core Australian Fixed Interest Plus Fund		0.81	3.10	8.71	1.67	1.91
Mercer Global Credit Fund		0.78	4.56	10.66	-1.88	-0.53
Mercer Global Sovereign Bond Fund		1.29	4.36	11.55	-2.20	-0.16
PIMCO Global Bond (Wholesale)	mFund	0.74	3.48	5.78	-1.94	-0.94
PIMCO Global Credi (Wholesale)	mFund	1.25	3.39	9.69	-1.32	0.22
PIMCO Diversified Fixed Interest Wholesale	mFund	1.20	4.39	10.76	-1.58	0.07
PIMCO Unconstrained Bond (Wholesale)	mFund	0.78	3.23	8.72	-1.20	-0.02
State Street SSgA Global Fixed Income Trust		0.86	3.64	7.71	-2.83	-1.48
T.Rowe Price Dynamic Global Bond Fund		-0.26	0.46	1.06	-0.42	1.94
UBS Global Credit Fund		1.35	4.59	12.15	-2.37	0.05
UBS International Bond		1.09	4.14	9.85	-1.80	-0.43
Vanguard International Credit Securities Index (Hedged)		1.33	4.43	10.57	-2.06	-0.41
Vanguard International Fixed Interest Index (Hedged)		1.08	3.81	7.55	-2.28	-1.30

^{*End of September 2024. Return in AUD after fees}