The Income Fund rose +0.3% during April, ahead of its benchmark which rose +0.1%.

UBS bonds rose over 1% during the month after a favourable ruling from the Swiss banking regulator regarding the future of bank capital rules. In the aftermath of the Credit Suisse collapse, and subsequent acquisition by UBS, Swiss regulators and politicians have debated at length about the correct way to govern the giant bank. During April, scenarios that would have been negative for UBS bond positions were agreed to be too punitive – helping prices to rally. The runway now looks clear for UBS to regain its position as one of the world’s highest quality banks.

Verizon subordinated bonds also rallied during April as credit spreads rallied, driving yields lower. The newly issued Australian dollar hybrid notes had suffered from market malaise during March but found solid footing in April after strong results from the US cellular carrier. In a market concerned with AI, software exposure and an Iranian conflict, the relative safety of a mobile provider proved popular.

NextDC bonds were added to the portfolio in April, returning the issuer to the fund after years of absence. The data centre operator has recently won a tidal wave of new contracts from hyperscale customers to deploy AI compute. To deliver on this ambitious plan the company has raised capital across equity and three different types of debt. This will enable a capital investment program multiple times larger than anything it has embarked on previously. With demand for compute at such a premium, the yield on offer is well above the average for the fund, which made for a pleasing addition.