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Morningstar FundInvestor
July 2015
Bond-Market Snapshot
Interest-Rate Review
Bond yields continued to rise across the yield curve in June 2015,
putting downward pressure on bond prices. Investment-grade
and high-yield corporate bonds suffered the largest underperform-
ance as investors sold risky assets amid fear of a Greek exit
from the eurozone. The Barclays U.S. Corporate Investment Grade
and Barclays U.S. Corporate High Yield indexes were down 1.8%
and 1.5% in June, respectively. The investor flight to safety helped
keep short-term U.S. Treasury indexes relatively flat for the
month. The Barclays Treasury 1-5 Year Index was down only 0.1.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
06-30-15
)
p
One Year Ago
(
06-30-14
)
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 June 3
0, 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.
June 30, 2015
-0.31
High
1.73
Low
-1.83
Average
0.10
Last Month
(05-31-15)
-0.40
A Year Ago
(06-30-14)
-0.23
June 30, 2015
3.52
High
10.71
Low
2.01
Average
3.99
Last Month
(05-31-15)
3.44
A Year Ago
(06-30-14)
2.30
06-30-15
06-30-15
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