21
Morningstar FundInvestor
May 2
014
Bond-Market Snapshot
Interest-Rate Review
U.S. interest rates fell across the board in April, propelling longer-
duration government-related fare to the strongest gains for the
month. Taxable long-term bonds, as measured by the Barclays
U.S. Long Treasury Index, led the way with a 2.0% return, adding
to the fund’s impressive year-to-date showing of 9.2% through
April 30, 2014. April was also a strong month for municipal bonds
of all maturities, and both the Barclays Municipal Long 22+ Year
and Barclays Municipal Intermediate 5-10 Year indexes had solid
returns of 1.6% and 1.2%, respectively. U.S. TIPS notched a
strong 1.4% return, bringing that sector’s year-to-date perform-
ance to 3.3%.
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
(
04-30-14
)
p
One Year Ago
(
04-30-13
)
04-30-14
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
04-30-14
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 April
30,
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.
April 30, 2014
-0.34
High
1.73
Low
-1.83
Average
0.13
Last Month
(03-31-14)
-0.47
A Year Ago
(04-30-13)
-0.91
April 30, 2014
2.27
High
10.71
Low
2.01
Average
4.05
Last Month
(03-31-14)
2.42
A Year Ago
(04-30-13)
3.52
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
