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Morningstar FundInvestor
February 2
015
Bond-Market Snapshot
Interest-Rate Review
U.S. Treasuries and Treasury-related securities including Treasury
Inflation-Protected Securities performed the best in January.
Barclays US Treasury Long Index returned 8.6%, and Barclays US
Treasury 7–10 Year Index returned 4.1%. Barclays Global Inflation
Linked US TIPS Index returned a strong 3.2% in January. Among
the weak performers, global bonds continued to show weakness as
seen in Barclays Global Aggregate Index’s 0.2% loss. Barclays US
Corporate High Yield Index produced a small 0.7% return.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(
01-31-15
)
p
One Year Ago
(
01-31-14
)
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 Jan. 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.
Jan. 31, 2015
-0.17
High
1.73
Low
-1.83
Average
0.12
Last Month
(12-31-14)
-0.33
A Year Ago
(01-31-14)
-0.96
Jan. 31, 2015
2.62
High
10.71
Low
2.01
Average
4.00
Last Month
(12-31-14)
3.52
A Year Ago
(01-31-14)
2.66
01-31-15
01-31-15
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
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