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Morningstar FundInvestor
March
2015
Bond-Market Snapshot
Interest-Rate Review
Risky assets were rewarded for a change in February, while safe-
haven investments, including U.S. Treasuries, took a back seat.
The Barclays U.S. Corporate High Yield Index rose 2.4%. Bargain-
hunters came back in droves as worries about falling oil prices
had depressed prices (and raised yields) in prior months. Mean-
while, the Barclays U.S. Treasury Long Index fell 5.4%, and the
Barclays U.S. Treasury 7–10 Year Index dropped 2.3%.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
02-28-15
)
p
One Year Ago
(
02-28-14
)
Treasury and Municipal-Bond Yields
High-Yield and Treasury-Bond Yields
Municipal-Bond Spread Snapshot
Unattractive
1.73
Attractive
-1.83
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 Feb. 28
, 2015
. 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.
Feb. 28, 2015
-0.15
High
1.73
Low
-1.83
Average
0.11
Last Month
(01-31-15)
-0.19
A Year Ago
(02-28-14)
-0.64
Feb. 28, 2015
3.34
High
10.71
Low
2.01
Average
4.00
Last Month
(01-31-15)
3.73
A Year Ago
(02-28-14)
2.70
02-28-15
02-28-15
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
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Maturity
6.00
5.00
4.00
3.00
2.00
1.00
1 mo 3
6
1 yr
2
3
5
7
10
20
30