Aussie fixed income outshines Aussie equities


There has been much better performance among Australian fixed interest funds compared to their equity peers in the first half of 2020, especially from funds focused on government bonds.
According to FE Analytics, within the Australian Core Strategies universe, out of 97 funds in the Australian bond sector, only six funds in the whole sector had seen losses in the first half of 2020.
This was in sharp contrast to the Australian equity sector where only six funds in the sector had reported positive returns and over 100 saw double-digit losses.
The best-performing Aussie bond fund over the six months to 30 June, 2020, was Russell Australian Bond which returned over 8%.
Other top-performing Australian bond funds over the period included QIC Australian Fixed Interest which returned 7.4%, GAM FCM ILS Yield which returned 5.6% and Pendal Fixed Interest which returned 5.4%.
The worst-performing fund was Yarra Enhanced Income Direct which lost 3.1%. However, this was far less than the worst-performing Australian equity fund which lost more than 50%.
The Yarra Enhanced Income fund also saw losses of 2.7% as well as the Pendal Dynamic Income fund, VanEck Vectors Australian Subordinated Debt ETF, DDH Preferred Income and BetaShares Active Australian Hybrids. These lost 1.7%, 1%, 0.8% and 0.08% respectively.
It was mixed results for BetaShares where its Australian Government Bond ETF was one of the best-performing funds over the period with returns of 5.1% but the Active Australian Hybrids fund was one of the worst with losses of 0.08%. Its Australian Bank Senior Floating Rate Bond ETF returned 1% and the BetaShares Legg Mason Australian Bond fund returned 3.2%.
Last month, it was reported market share for fixed income exchange traded products declined from 30% in 2019 to just 3% in 2020 with investors favouring equity vehicles instead.
However, several ETFs in the sector reported returns above the Australian bond sector average of 2.5% including Russell Australian Government Bond ETF (4.6%), Vanguard Australian Government Bond Index ETF (3.7%) and BlackRock iShares Treasury ETF (3.7%).
Recommended for you
Bfinance Australia has shared five questions to ask when considering a semi-liquid private equity fund as their assets under management reach US$30 billion.
GQG Partners has announced its funds under management for February, but reported lower net flows during the month.
The days of “lunch and a handshake” are long gone for alternative fund managers, Bain & Company has said, as a slick sales organisation is needed if they are to benefit from the huge source of capital in private investors.
Ares Management is the latest fund manager to enact alternatives M&A, completing the acquisition of the international business of GLP Capital Partners to create a firm with US$525 billion in assets under management.