(PUB) Investing 2015

21

October 2015

Morningstar FundInvestor

Bond-Market Snapshot

Treasury Yield Curve ( % )

Yield to maturity of current bills, notes, and bonds

p Current ( 09-30-15 )

p One Year Ago ( 09-30-14 )

Interest-Rate Review The U.S. bond markets improved in September, with the Barclays U.S. Aggregate Bond Index returning 0.68% and the Barclays Municipal Index returning 0.72%. High yield declined but not as much as emerging-markets bonds. With the Fed maintaining low interest rates for the time being and significantly slowed growth in primary emerging-markets engine economies—China, Brazil, and Russia—the JP Morgan Emerging Market Bond Index has lost 16.9% for the year to date.

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

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

Municipal-Bond Spread Snapshot

7.00

Unattractive 1.73

-0.38

Sept. 30, 2015

6.50

High

1.73

5.00

Low

-1.83

4.50

Average

0.09

3.00

09-30-15

Last Month (08-31-15)

-0.34

1.50

A Year Ago (09-30-14)

-0.01

0.00

Attractive -1.83

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

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

4.40

Attractive 10.71

Sept. 30, 2015

12.00

High

10.71

9.00

Low

2.01

Average

4.00

6.00

09-30-15

Last Month (08-31-15)

4.16

3.00

A Year Ago (09-30-14)

3.05

0.00

Unattractive 2.01

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Data as of Sept. 30, 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.