(PUB) Investing 2015

July 2015

Morningstar FundInvestor

21

Bond-Market Snapshot

Treasury Yield Curve ( % )

Yield to maturity of current bills, notes, and bonds

p Current ( 06-30-15 )

p One Year Ago ( 06-30-14 )

Interest-Rate Review Bond yields continued to rise across the yield curve in June 2015, putting downward pressure on bond prices. Investment-grade and high-yield corporate bonds suffered the largest underperform- ance as investors sold risky assets amid fear of a Greek exit from the eurozone. The Barclays U.S. Corporate Investment Grade and Barclays U.S. Corporate High Yield indexes were down 1.8% and 1.5% in June, respectively. The investor flight to safety helped keep short-term U.S. Treasury indexes relatively flat for the month. The Barclays Treasury 1-5 Year Index was down only 0.1.

6.00

5.00

4.00

3.00

2.00

1.00

Maturity

1 mo 3

6

1 yr

2

3

5

7

10

20

30

Treasury and Municipal-Bond Yields

Municipal-Bond Spread Snapshot Unattractive 1.73

p Vanguard Interm-Term Tax-Exempt p Vanguard Interm-Term U.S. Treasury

7.00

-0.31

June 30, 2015

6.50

High

1.73

5.00

Low

-1.83

4.50

Average

0.10

3.00

06-30-15

Last Month (05-31-15)

-0.40

1.50

A Year Ago (06-30-14)

-0.23

0.00

Attractive -1.83

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

High-Yield and Treasury-Bond Yields

p Vanguard High-Yield Corporate p Vanguard Interm-Term U.S. Treasury

High-Yield Bond Spread Snapshot

15.00

3.52

Attractive 10.71

June 30, 2015

12.00

High

10.71

9.00

Low

2.01

Average

3.99

6.00

Last Month (05-31-15)

3.44

3.00

06-30-15

A Year Ago (06-30-14)

2.30

0.00

Unattractive 2.01

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Data as of June 3 0, 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.