InvestSMART Interest Income Portfolio - September 2018
The InvestSMART Interest Income Portfolio produced a return of 0.32%% (after fees) during the September Quarter.
• The InvestSMART Interest Income Portfolio produced a return of 0.32%% (after fees) during the September Quarter.
• No changes were made to the portfolio during the September quarter
• Estimated yield on the portfolio is currently 2.48%
• Since inception the Interest Income portfolio has returned 2.06% per annum (after fees)
iShares Treasury ETF (IGB) and the Vanguard Australian Government Bond Index ETF (VGB) added 0.12% and 0.14% respectively as the Australian bond market remained steadfast throughout the quarter.
The RBA made no major changes to rates or the outlook, and there were no changes to Australia's AAA credit rating.
The Interest Income portfolio remains domestically focused, and thus, is unlikely to be caught up in movements of the US fixed interest market which has been Increasing yields rapidly due to US Federal Reserve and signs of US inflation.
Looking to the floating notes and money market side of the portfolio, the Bank Bill Swap Rate (BBSW) moderated throughout the third quarter before Increasing rapidly in the final few weeks of September.
Yields moved back towards highs last seen in 2011. We expect further yield Increases in credit markets globally.