(PUB) Investing 2016

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21 Morningstar FundInvestor July 2016
Bond-Market Snapshot
Interest-Rate Review
The Brexit vote spurred a bond rally as the Barclays US Aggregate
Bond Index rose 1.8% in June. Worries that the world economy
would slow caused the yield curve to flatten, benefiting in particular
long US Treasuries, which have gained 15.1% in 2016. Inflation
expectations rose with delayed interest-rate action by the Federal
Reserve, and the US Treasury TIPS Index gained 2.1% for the
month. The local-currency-denominated JPM GBI-EM Global Com-
posite Index gained 6.6% for June, while the Barclays Municipal
Index continued its climb and registered its 12th-straight month of
positive returns by returning 1.6%.
Treasury Yield Curve ( %)
Yield to maturity of current bills, notes, and bonds p Current (06-30-16) p One Year Ago (06-30-15 )
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 June 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.
June 30, 2016 -0.24
High 1.73
Low -1.83
Average 0.08
Last Month (05-31-16) -0.13
A Year Ago (06-30-15) -0.31
June 30, 2016 4.45
High 10.71
Low 2.01
Average 4.02
Last Month (05-31-16) 4.37
A Year Ago (06-30-15) 3.52
06-30-16
06-30-16
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