When I first wrote this in December 2023, the investment community was buzzing about the potential of TLT as an investment opportunity. I’ve refreshed the figures for October 2026. Let’s delve into what TLT entails.
The iShares 20+ Year Treasury Bond ETF (TLT) gives investors targeted access to U.S. Treasury bonds with over twenty years to maturity. It aims to mirror the performance of the ICE US Treasury 20+ Year Bond Index.
Figures checked on 22 Oct 2026 from iShares’ official TLT page and the Federal Reserve. All amounts are in USD.
TLT Key Facts (Oct 2026)
| NAV | $80.22 (21 Oct 2026) |
| Closing price | $80.13 (20 Oct 2026) |
| 52-week range (NAV) | $77.08 – $92.05 |
| Fund size (net assets) | $47.43 billion (21 Oct 2026) |
| Expense ratio | 0.15% |
| 30-day SEC yield | 5.40% (20 Oct 2026) |
| 12-month trailing yield | 4.86% (20 Oct 2026) |
| Average yield to maturity | 5.48% |
| Effective duration | 14.85 years |
| Weighted average maturity | 26.04 years |
| Number of holdings | 47 |
| Distributions | Monthly |
| Domicile | United States |
Recent Performance
| Period | Return |
|---|---|
| Year to date (to 20 Oct 2026) | -4.95% |
| 1 year | -8.88% |
| 3 years (annualised) | -0.09% |
| 5 years (annualised) | -8.44% |
| 10 years (annualised) | -2.78% |
| Year | Return |
|---|---|
| 2021 | -4.76% |
| 2022 | -31.41% |
| 2023 | +2.96% |
| 2024 | -7.84% |
| 2025 | +4.17% |
Pros Of Buying TLT
1. Buying Opportunity
When I first wrote this, TLT had fallen 49% since its all-time high in 2021, which I felt might represent a buying opportunity. Since then, TLT returned -7.84% in 2024, +4.17% in 2025 and -4.95% so far in 2026 (to 20 Oct). Its NAV is $80.22 as of 21 Oct 2026, near the bottom of its 52-week range ($77.08 – $92.05).
2. Potential for Future Appreciation
TLT’s value is closely tied to interest rates. Back in late 2023, a lot of people believed that interest rates had peaked and the Fed would be cutting soon. The rate backdrop has since shifted: on 16 Sep 2026 the Fed raised the federal funds target range by 0.25% to 3.75%–4.00%, saying inflation remains elevated.
TLT, with an effective duration of 14.85 years (20 Oct 2026), is sensitive to interest rate changes. A 1% decrease in long-term interest rates can lead to approximately a 14.85% increase in TLT’s price, reflecting the bond’s price sensitivity to rate changes over its duration.
This high duration makes TLT more volatile in response to interest rate movements, which can lead to significant price appreciation, making it a potentially powerful tool for investors anticipating rate changes.
3. Diversification
TLT offers a way to diversify your portfolio away from stocks and other equity investments. It can serve as a hedge against equity investments during a recession. This is because government bonds often react differently to economic downturns compared to stocks.
In times of economic stress or recession, investors tend to move their assets into safer investments like Treasury bonds, driving up their prices. This inverse relationship between bond prices and stock market performance can help to offset losses in an equity portfolio, thus providing a balancing effect. Essentially, TLT can act as a stabiliser during turbulent economic periods.
4. Dividend Yield
TLT provides a source of income through its monthly distributions. As of 20 Oct 2026, its 12-month trailing yield is 4.86% and its 30-day SEC yield is 5.40%. The last 10 monthly payouts (Dec 2025 to Oct 2026) ranged from $0.30 to $0.34 per share. For investors seeking regular income streams, this can be an attractive feature, particularly in times of market volatility or uncertainty.
Cons Of Buying TLT
Investing in TLT, the iShares 20+ Year Treasury Bond ETF, comes with its own set of challenges and risks.
1. Interest Rates Risk
As interest rates rise, the value of TLT can decrease, given its focus on long-term Treasury bonds. This is especially relevant in a scenario where the Federal Reserve tightens monetary policy, leading to higher interest rates.
As mentioned above, with its effective duration of 14.85 years, a 1% rise in interest rates could lead to a potential loss of about 14.85% in TLT’s price. This played out in 2022, when TLT returned -31.41%.
2. Quantitative Tightening Impact
When I first wrote this, Quantitative Tightening (QT) was a major worry for TLT. QT involves the Federal Reserve reducing its holdings of government bonds, which increases the supply of bonds in the market as the Fed is no longer buying them in large quantities.
When bond supply increases without a corresponding rise in demand, prices typically fall. Since TLT tracks the price of long-term U.S. Treasury bonds, increased supply and lower bond prices due to QT can lead to a decline in TLT’s value.
As of its 16 Sep 2026 implementation note, the Fed now rolls over all principal payments from its Treasury holdings, and buys Treasury bills (and, if needed, Treasuries of 3 years or less) to keep reserves ample. That means QT is no longer shrinking its Treasury holdings, but the Fed isn’t buying long-dated bonds like the ones TLT holds either.
3. Inflation Concerns
Inflation is another critical factor to consider. High inflation rates can erode the real returns of Treasury bonds. This is because the fixed interest payments lose purchasing power over time. Inflation reduces the value of these payments, making the bonds less attractive to investors seeking to maintain or grow the real value of their capital.
TLT has a longer time horizon until maturity, meaning there’s more time for inflation to diminish the value of its fixed payments. In its Sep 2026 statement, the Fed said inflation “remains elevated”.
Tax Considerations
TLT is domiciled in the United States. For a non-U.S. investor like me in Singapore, U.S. withholding tax of up to 30% can apply to its distributions, depending on how the broker classifies the income, and U.S. estate tax can apply to U.S. assets worth more than US$60,000.
Should You Buy TLT (20+ Year Treasury Bond ETF)?
TLT’s big price drop could signify a buying opportunity, especially if you anticipate a decline in interest rates. TLT offers portfolio diversification and a source of monthly income, beneficial during market instability.
Conversely, if you’re wary of rising interest rates and stubborn inflation, TLT might not align with your investment strategy.
My personal view when I first wrote this in December 2023 was that interest rates had most probably peaked, because inflation was starting to fall from its peak and seemed to have stabilised.
However, looking at historical 10 year interest rates, I don’t think we would go back to the ultra low interest rate periods of 2020. A realistic rate would be between 2 to 3%.
Based on the effective duration calculation at the time, I thought we could see a gain of at least 30%. That said, I flagged the risk of QT oversupplying bonds and dulling the value.
Looking at the figures in Oct 2026, that gain hasn’t happened yet: TLT’s calendar-year returns since then have been -7.84% (2024), +4.17% (2025) and -4.95% (2026 to 20 Oct), and the Fed raised rates in Sep 2026. The higher yield (4.86% trailing, 5.40% SEC) means you’re now paid more to wait, but the price will keep swinging with long-term rates.
As always, it’s prudent to consider your personal financial situation, risk tolerance, and investment objectives before making any investment decisions.
