(PUB) Morningstar FundInvestor - page 169

21
Morningstar FundInvestor
April 2
014
Bond-Market Snapshot
Interest-Rate Review
March was a mixed bag. Local-currency and U.S.-dollar-denomi-
nated emerging-markets debt led the pack with monthly gains of
2.9% and 1.3%, respectively. Meanwhile, most areas of the muni-
cipal-bond sector continued to notch strong gains in March, making
up lost ground after 2013’s losses. For instance, the Barclays High
Yield Muni Index returned 0.5%, building on its strong year-to-date
gain of 5.9% as of March 31. Credit-related fare also rose slightly,
as bank loans gained an average 0.4% and U.S. high yield returned
0.2%. Intermediate-maturity U.S. Treasury securities realized the
biggest losses for the month: The Barclays U.S. Treasury 5-7 Year
Index dropped 0.8% and the Barclays U.S. Treasury 7-10 Year Index
dropped 0.6% as rates rose across the belly of the curve, while
short-term and long-term rates saw little movement.
Treasury Yield Curve (
%
)
Maturity
6.00
5.00
4.00
3.00
2.00
1.00
Yield to maturity of current bills, notes, and bonds
p
Current
(
03-31-14
)
p
One Year Ago
(
03-31-13
)
03-31-14
7.00
6.50
5.00
4.50
3.00
1.50
0.00
15.00
12.00
9.00
6.00
3.00
0.00
Treasury and Municipal-Bond Yields
High-Yield and Treasury-Bond Yields
Municipal-Bond Spread Snapshot
Unattractive
1.73
Attractive
-1.83
03-31-14
High-Yield Bond Spread Snapshot
Attractive
10.71
Unattractive
2.01
p
Vanguard Interm-Term Tax-Exempt
p
Vanguard Interm-Term
U.S.
Treasury
p
Vanguard High-Yield Corporate
p
Vanguard Interm-Term
U.S.
Treasury
Data as of March
31,
2014. Yield Spread: The difference between yields on differing debt instruments, calculated by deducting
the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by
each instrument. For municipal bonds, a smaller spread is attractive because munis typically pay smaller yields than Treasuries.
For high-yield bonds, a wider spread is more attractive because junk bonds typically pay higher yields than Treasuries.
March 31, 2014
-0.47
High
1.73
Low
-1.83
Average
0.13
Last Month
(02-28-14)
-0.64
A Year Ago
(03-31-13)
-0.79
March 31, 2014
2.42
High
10.71
Low
2.01
Average
4.05
Last Month
(02-28-14)
2.70
A Year Ago
(03-31-13)
3.54
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
1 mo 3
6
1 yr
2
3
5
7
10
20
30
1...,159,160,161,162,163,164,165,166,167,168 170,171,172,173,174,175,176,177,178,179,...1015
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