Money Management has analysed data from FE Analytics that shows bonds have managed to pick themselves up after a rocky start to the first and second quarters of the year.
There were no particular standout sectors, and each sector suffered dips below the line at the beginning of both quarters but proved their resilience by picking back up towards the end.
Australian bonds have remained consistent players, producing positive returns in February, March, May and June, after dropping into the negative at the beginning of both quarters.
Global strategic bonds roughed out a bad start to the year and remained above the line, but fell in March and April, and were the only sector to produce negative returns in June.
Global bonds hit a high in March but failed to produce positive returns in all other months bar June, and had the largest drawdown of all the sectors in May.
The Australia/global bond sector sat below the line at quarter beginnings, producing negative returns in January and April, and hitting their high in March.
April was a rough month for all bond sectors bar mortgages, which consistently produced positive returns across Q1 and Q2.
As it stands, inflation-linked bonds have produced the best returns over March, May and June, after sitting in the negative for January, February and April.
The chart below shows the performance of the five top-performing funds in the inflation-linked bonds sector, which hit the highest overall total returns for Q1 and Q2.
The one-Crown FE-rated Premier Australian Inflation Linked Bond fund was the top-performing fund with returns of 2.62 per cent, while the iShares Australian Government Inflation Linked Bond Fund came in a close second at 2.26 per cent.
Aberdeen’s three-Crown Inflation Linked Bond fund and Macquarie’s three-Crown Inflation Linked Bond fund sat in the top quartile of the sector, well above the sector average of 1.84 per cent, as did Vanguard’s unrated Australian Inflation Linked Bond fund.
True to nature it’s clear volatility was extremely low, and all funds held low FE Risk scores.
