What is TLT? Understand TLT in one minute

As an exchange-traded fund managed by BlackRock, TLT offers investors exposure to long-term U.S. Treasury bonds with maturities greater than 20 years, primarily influenced by prevailing interest rates and market conditions.

Oct 22, 2024 at 12:30 am

What is TLT?

TLT refers to the iShares 20+ Year Treasury Bond ETF, an exchange-traded fund (ETF) managed by BlackRock Fund Advisors. It tracks the performance of a broad market index of U.S. Treasury bonds with maturities greater than 20 years.

Understanding TLT:

1. Bond Exposure: TLT provides investors exposure to long-term U.S. Treasury bonds, which are considered relatively low-risk investments due to the backing of the U.S. government.
2. Maturity: The ETF invests primarily in bonds with maturities exceeding 20 years, making it more sensitive to interest rate changes compared to shorter-term bond ETFs.
3. Interest Rates: As a long-term bond ETF, TLT's value is inversely correlated with interest rates. When interest rates rise, the value of TLT tends to fall, and vice versa.
4. Yield: The ETF's yield represents the annual return generated by the underlying bonds, primarily influenced by prevailing interest rates and market conditions.
5. Investment Objective: TLT aims to provide income and long-term capital appreciation through investments in long-term U.S. Treasury bonds.
6. Fund Structure: TLT is an actively managed ETF, meaning portfolio managers make investment decisions within the parameters of its investment objective.
7. Market Capitalization: As of August 2023, TLT has a market capitalization of approximately $130 billion, making it one of the largest bond ETFs.
8. Liquidity: TLT is a highly liquid ETF, with an average daily trading volume exceeding $1 billion, providing investors with easy entry and exit points.
9. Fees: The expense ratio for TLT is 0.15%, relatively low compared to other fixed income ETFs.

Key Features of TLT:

• Exposure to long-term U.S. Treasury bonds
• Inversely correlated with interest rates
• Potential for income and capital appreciation
• Actively managed ETF with low fees
• High market capitalization and liquidity