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21
Morningstar FundInvestor
November 2015
Bond-Market Snapshot
Interest-Rate Review
The Barclays US Corporate High Yield TR Index was up for October,
returning 2.8% for the month. Anticipation of rising interest rates
also lifted the middle of the yield curve for October. For the year to
date, the Barclays US Treasury 5-7 YR TR and Barclays Municipal
Intermediate 5-10 YR TR are up 2.7% and 2.5%, respectively. Over the
course of the year, spreads for high-yield bonds and munis have
continued to widen across the yield curve but most considerably for
longer maturities.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
10-31-15
)
p
One Year Ago
(
10-31-14
)
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 Oct.
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.
Oct. 31, 2015
-0.30
High
1.73
Low
-1.83
Average
0.09
Last Month
(09-30-15)
-0.38
A Year Ago
(10-31-14)
-0.09
Oct. 31, 2015
4.41
High
10.71
Low
2.01
Average
4.00
Last Month
(09-30-15)
4.40
A Year Ago
(10-31-14)
3.32
10-31-15
10-31-15
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
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
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