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Morningstar FundInvestor
May 2016
Bond-Market Snapshot
Interest-Rate Review
Bonds continued their slow-paced rally in April. The Barclays U.S.
Aggregate Index has gone up each month in 2016 including
a 0.4% gain in April. High-yield and corporate bonds had a great
month. The Barclays Investment Grade Corporates Index surged
1.4%, while the Barclays U.S. Corporate High Yield Index gained
3.9%. It was a strong month for munis, too, as the Barclays
Municipal Index is up 2.4%. Loose monetary policies from Central
Banks in Europe and Asia propelled the Barclays Global Aggregate
Index to a 7.3% year-to-date return.
Treasury Yield Curve (
%
)
Yield to maturity of current bills, notes, and bonds
p
Current
(0
4-30-16
)
p
One Year Ago
(0
4-30-15
)
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 April 30
, 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.
April 30, 2016
-0.22
High
1.73
Low
-1.83
Average
0.08
Last Month
(03-31-16)
-0.20
A Year Ago
(04-30-15)
-0.36
April 30, 2016
4.28
High
10.71
Low
2.01
Average
4.02
Last Month
(03-31-16)
4.29
A Year Ago
(04-30-15)
3.46
04-30-16
04-30-16
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