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Morningstar FundInvestor
May 2015
Bond-Market Snapshot
Interest-Rate Review
Foreign bonds rallied in April. The J.P. Morgan GBI Emerging
Markets Global Composite Index and the Barclays Global
Aggregate Index posted returns of 3.1% and 1.1%, respectively,
and the U.S. dollar weakened against a basket of foreign
currencies. However, U.S. high-quality bond markets declined in
April. The Barclays U.S. Aggregate Bond Index saw a 0.4%
loss, and longer-term indexes were hit harder, with Barclays U.S.
Treasury Long Index losing 3.1%. Not everything was gloomy
domestically, however. Bank of America Merrill Lynch US High
Yield Master II Index posted 1.2% gains, buoyed by stabilizing
oil prices.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
04-30-15
)
p
One Year Ago
(
04-30-14
)
Treasury and Municipal-Bond Yields
High-Yield and Treasury-Bond Yieldsv
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 April 30
, 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.
April 30, 2015
-0.36
High
1.73
Low
-1.83
Average
0.11
Last Month
(03-31-15)
-0.25
A Year Ago
(04-30-14)
-0.34
April 30, 2015
3.46
High
10.71
Low
2.01
Average
3.99
Last Month
(03-31-15)
3.60
A Year Ago
(04-30-14)
2.27
04-30-15
04-30-15
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