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21
Morningstar FundInvestor
October 2015
Bond-Market Snapshot
Interest-Rate Review
The U.S. bond markets improved in September, with the Barclays
U.S. Aggregate Bond Index returning 0.68% and the Barclays
Municipal Index returning 0.72%. High yield declined but not as
much as emerging-markets bonds. With the Fed maintaining
low interest rates for the time being and significantly slowed growth
in primary emerging-markets engine economies—China, Brazil,
and Russia—the JP Morgan Emerging Market Bond Index has lost
16.9% for the year to date.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
09-30-15
)
p
One Year Ago
(
09-30-14
)
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 Sept.
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.
Sept. 30, 2015
-0.38
High
1.73
Low
-1.83
Average
0.09
Last Month
(08-31-15)
-0.34
A Year Ago
(09-30-14)
-0.01
Sept. 30, 2015
4.40
High
10.71
Low
2.01
Average
4.00
Last Month
(08-31-15)
4.16
A Year Ago
(09-30-14)
3.05
09-30-15
09-30-15
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 15
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
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