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21
Morningstar FundInvestor
April
2015
Bond-Market Snapshot
Interest-Rate Review
Risky assets took a step back again in March as high-yield bonds
took a hit, as did global bonds, and U.S. Treasuries rallied.
Barclays US Treasury Long Index returned a strong 1.2% followed
by Barclays US Treasury 5-7 Year and Barclays US Treasury 7-10
Year indexes both returning roughly 0.9% for the month of March.
The worst performers for the month were global bonds, as the
Barclays Global Aggregate Index lost almost 1%. High-yield bonds
also struggled in March, as the Barclays US Corporate High Yield
and Bank of America Merrill Lynch US High Yield Master II indexes
lost 0.6% and 0.5%, respectively.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
03-31-15
)
p
One Year Ago
(
03-31-14
)
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 March 31
, 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.
March 31, 2015
-0.25
High
1.73
Low
-1.83
Average
0.11
Last Month
(02-28-15)
-0.15
A Year Ago
(03-31-14)
-0.47
March 31, 2015
3.60
High
10.71
Low
2.01
Average
4.00
Last Month
(02-28-15)
3.34
A Year Ago
(03-31-14)
2.42
03-31-15
03-31-15
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