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Morningstar FundInvestor
April 2016
Bond-Market Snapshot
Interest-Rate Review
The Barclays U.S. Aggregate Index provided a 0.9% return for March,
primarily buoyed by investment-grade corporates, which gained
2.8%, but weighed down by far more-modest performance in other
sectors, including 0.2% from U.S. Treasuries and agencies. The
yield curve remained relatively unchanged over the course of the
month, with the exception of the three-month Treasury, which
shifted lower by 12 basis points. Riskier sectors rebounded from a
tough previous quarter, with the Barclays U.S. Corporate High
Yield Index generating 3.4% and local-currency emerging-markets
debt, as measured by the JPM GBI-EM Global Composite, up
11.1%, both for the year to date.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(0
3-31-16
)
p
One Year Ago
(0
3-31-15
)
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 March 31
, 2016
. 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.
March 31, 2016
-0.20
High
1.73
Low
-1.83
Average
0.09
Last Month
(02-29-16)
-0.20
A Year Ago
(03-31-15)
-0.25
March 31, 2016
4.29
High
10.71
Low
2.01
Average
4.01
Last Month
(02-29-16)
5.42
A Year Ago
(03-31-15)
3.60
03-31-16
03-31-16
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