The top-performing global income funds for FY25 – Stephanie Gardner

In a volatile market, the question arises of where to find yield. With geopolitical tensions creating a strained backdrop, sticky inflation and shifting expectations around bank cuts, bond yields have understandably fluctuated over the past 12 months.

Despite these challenges, several global income funds managed to deliver strong, consistent returns. From high-yield credit to capital securities, these top five funds found opportunity amidst the uncertainty.

How we compiled these lists

These global equity funds are all listed on the Livewire ‘Find Funds‘ menu (top right-hand side of your page). It should be noted that this is not an exhaustive list of all the global equities funds domiciled in Australia – there are others not listed in Livewire’s ‘Find Funds’ marketplace.

The filters we used were:

• In the “Fund type” box, select “Managed Funds”
• In “Asset Class”, select “fixed income – global”
• We then manually filtered results based on 1-year returns.

NOTE: While it is an interesting exercise to examine fund performance over a one-year period, most funds recommend minimum investment periods of five years or more. As such, it would be worthwhile to consider longer-term performance across cycles when researching funds or making investment decisions. Past performance is not a reliable indicator of future return.

The Results:

#1 – Neuberger Berman Global High Yield Fund

Managed Fund

Neuberger Berman Global High Yield Fund

Global Fixed Income

Fund profile: The Fund’s investment objective is to provide a consistent monthly income stream, while achieving an attractive level of total return (income plus capital appreciation) over a full market cycle.

The fund maintains a “recommended” rating from both Lonsec and Zenith research houses while boasting average portfolio manager experience of 24 years.

The fund is managed by four senior portfolio managers: Chris Kocinski, Joseph Lind, Nish Popat, and Jennifer Gorgoll. The table below highlights the top 10 issuers in the fund as per the May factsheet. 

#2 – PIMCO Capital Securities Fund

Managed Fund

PIMCO Capital Securities Fund

Global Fixed Income

Fund profile: To seek to provide focused exposure to attractively priced Capital Securities together with a maximum total return, consistent with the preservation of capital and prudent investment management.

This fund offers investors the opportunity to diversify their concentrated Australian bank exposure by leveraging a diversified global investment opportunity set. Management is on an unconstrained basis, allowing allocation across capital structure based on relative value, emphasising their high conviction within the global financial sector.

The fund is managed by Philippe Bodereau, Matthieu Loriferne and Michael Bogecho.

According to PIMCO’s May performance report, the top contributors to the fund included “exposure to Additional Tier 1 bonds, in particular from select UK, Dutch, French and Spanish issuers; exposure to senior financial debt; and exposure to select non-financial debt contributed to performance”.

The graph below shows the fund’s capital structure positioning, as per the May monthly commentary. 

#3 – T. Rowe Price Global High Income Fund – S Class

Managed Fund

T. Rowe Price Global High Income Fund – S class

Global Fixed Income

Fund profile: The T. Rowe Price Global High Income Fund seeks high income and capital appreciation by investing primarily in global, below-investment-grade corporate debt securities.

The fund primarily targets high-yield corporate issuers in North American, European, and emerging markets as part of their global diversification strategy. Managed by Mike Della Vedova, Michael Connelly and Samy Muaddi and has been in operation since 2020.

The table below shows the fund’s top 10 issue exposure as per the May monthly update.

 

Outlook

The excerpt below is from the T. Rowe fund monthly update

Despite signs of slowing growth, fundamental conditions remain strong in the sub-investment-grade space. Due to tighter financial conditions, we expect the default rate to pick up but remain concentrated in known distressed names that have been priced in by the market. 

Despite mediocre spreads, the asset class continues to provide attractive yields. 

Our research-based approach will be crucial as we seek to identify companies with strong fundamentals that can potentially withstand volatility and economic slowdowns.

#4 – Realm Global High Income AUD

Managed Fund

Realm Global High Income AUD

Global Fixed Income

Fund profile: The Realm Global High Income Fund AUD is a fixed income strategy that invests in global asset-backed securities, bank-issued securities and corporate bonds. The objective of the Fund is to deliver investors a consistent return (net of fees and gross of franking) of 2.5 – 3.5% over the RBA cash rate through a market cycle.

The chart below illustrates the funds sector allocation, as per the June fund update.

 

Fund commentary

Risk assets extended their rally in June, brushing off geopolitical shocks such as the brief Israel-Iran conflict. The S&P 500 surged 5% to record highs, while volatility stayed contained and credit markets tightened.

Trade optimism lifted sentiment, with the US striking deals with the UK, China, and Vietnam. Meanwhile, softer economic data and falling Treasury yields pushed the US dollar to three-year lows.

Oil spiked amid Middle East tensions but quickly retreated as supply fears eased. Against this backdrop, the fund delivered a solid 0.95% return in June, well ahead of the RBA Cash Rate (0.31%).

Since its November 2023 inception, it has returned 12.83% annually, with performance driven by Corporate Bonds and Structured Credit. The fund added to high-quality, short-duration corporate debt while paring back hybrids and subordinated exposures.

With strong starting yields and elevated cash reserves, the portfolio remains positioned to navigate further volatility while capturing selective opportunities.

#5 – Neuberger Berman Strategic Income Fund

Managed Fund

Neuberger Berman Strategic Income Fund

Global Fixed Income

Fund profile: The Fund aims to maximise total return from high current income and long-term capital appreciation by opportunistically investing in a diversified mix of fixed-rate and floating-rate debt securities under varying market environments.

Seeking high income and attractive total return, the diversified multi-sector fixed-income strategy aims to exploit mispriced sectors using a relative value approach with a focus on downside protection.

The fund maintains “Recommended” ratings from Lonsec and Zenith research houses and was a finalist in the Money Management Fund Manager of the Year Awards in 2025.

The fund is managed by Senior Portfolio Managers Thanos Bardas, David M. Brown, Adam Grotzinger, Robert Dishner and Thomas Sobanski.