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Morningstar FundInvestor
December 2015
Bond-Market Snapshot
Interest-Rate Review
The yield curve shifted upward in November, with the most consid-
erable rise for shorter maturities; the three-year Treasury yield
ended 19 basis points higher than the previous month-end. U.S.
fixed-income indexes dipped broadly in anticipation of imminent
Federal Reserve action, with the Barclays U.S. Aggregate Bond
Index losing 26 basis points over the month. Long-duration munici-
pals remained a bright spot--providing twice as much return
as last month and a 3.38% return for the year to date. Emerging
markets continue to slog through currency chaos, with the local
currency JPM GBI EM Global Composite TR USD losing 1.93% for
the month and 15.05% since January.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
11-30-15
)
p
One Year Ago
(
11-30-14
)
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 Nov.
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.
Nov. 30, 2015
-0.17
High
1.73
Low
-1.83
Average
0.09
Last Month
(10-31-15)
-0.30
A Year Ago
(11-30-14)
-0.16
Nov. 30, 2015
4.28
High
10.71
Low
2.01
Average
4.00
Last Month
(10-31-15)
4.41
A Year Ago
(11-30-14)
3.18
11-30-15
11-30-15
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
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