(PUB) Investing 2015

21

November 2015

Morningstar FundInvestor

Bond-Market Snapshot

Treasury Yield Curve ( % )

Yield to maturity of current bills, notes, and bonds

p Current ( 10-31-15 )

p One Year Ago ( 10-31-14 )

Interest-Rate Review The Barclays US Corporate High Yield TR Index was up for October, returning 2.8% for the month. Anticipation of rising interest rates also lifted the middle of the yield curve for October. For the year to date, the Barclays US Treasury 5-7 YR TR and Barclays Municipal Intermediate 5-10 YR TR are up 2.7% and 2.5%, respectively. Over the course of the year, spreads for high-yield bonds and munis have continued to widen across the yield curve but most considerably for longer maturities.

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

-0.30

Oct. 31, 2015

6.50

High

1.73

5.00

Low

-1.83

4.50

Average

0.09

3.00

10-31-15

Last Month (09-30-15)

-0.38

1.50

A Year Ago (10-31-14)

-0.09

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

4.41

Attractive 10.71

Oct. 31, 2015

12.00

High

10.71

9.00

Low

2.01

Average

4.00

6.00

Last Month (09-30-15)

4.40

3.00

10-31-15

A Year Ago (10-31-14)

3.32

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 Oct. 31, 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.