(PUB) Investing 2015

21

December 2015

Morningstar FundInvestor

Bond-Market Snapshot

Treasury Yield Curve ( % )

Yield to maturity of current bills, notes, and bonds

p Current ( 11-30-15 )

p One Year Ago ( 11-30-14 )

Interest-Rate Review The yield curve shifted upward in November, with the most consid- erable rise for shorter maturities; the three-year Treasury yield ended 19 basis points higher than the previous month-end. U.S. fixed-income indexes dipped broadly in anticipation of imminent Federal Reserve action, with the Barclays U.S. Aggregate Bond Index losing 26 basis points over the month. Long-duration munici- pals remained a bright spot--providing twice as much return as last month and a 3.38% return for the year to date. Emerging markets continue to slog through currency chaos, with the local currency JPM GBI EM Global Composite TR USD losing 1.93% for the month and 15.05% since January.

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

-0.17

Nov. 30, 2015

6.50

High

1.73

5.00

Low

-1.83

4.50

Average

0.09

11-30-15

3.00

Last Month (10-31-15)

-0.30

1.50

A Year Ago (11-30-14)

-0.16

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

4.28

Attractive 10.71

Nov. 30, 2015

12.00

High

10.71

9.00

Low

2.01

Average

4.00

6.00

Last Month (10-31-15)

4.41

3.00

11-30-15

A Year Ago (11-30-14)

3.18

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 Nov. 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.