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Some Areas of the Bond Market Look Increasingly Attractive

A regular part of our investment research process is site visits to some of the industrys most respected money managers. Recent visits include Wellington Management in Boston and T. Rowe Price in Baltimore. The two firms shared the view that investment grade corporate bonds have become increasingly attractive following the global market sell-off during the third quarter.

We agree. As the adjacent chart illustrates, investment grade corporate yields have risen compared to treasury yields, suggesting better return potential. Furthermore, the spread between investment grade corporate bond yields and bonds rated one notch below investment grade is historically narrow.

10.13.15

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