Aug 21

World Government Bonds perform best over last 5 years

The above table shows the returns for various subclasses of fixed interest from the perspective of the Australian investor (i.e. in Austrlaian dollars) through to the end of June 2009. As can be seen, the World Government Bond index hedged to Australian dollars has been the winner over the last 3 and 5 years. High Yield, as expected given the widening of credit spreads over the last 2 years, comes in last.

Disappointingly, the Morningstar index of bond fund managers fall quite short versus their respecitve indices. For example, Morningstar Australian Bond managers perform significanlty worse than the UBS Composite index and the Morningstar Global Bond managers perform well below the BarCap Global Aggregate index.

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