iShares 20+ Year Treasury Bond ETF [TLT]
By: Ted Black, CFP©
Fall 2025 (Vol. 43, No. 3)
The iShares 20+ Year Treasury Bond ETF is an exchange traded fund launched by BlackRock, Inc. in 2002. The fund is managed by BlackRock Fund Advisors. The fund invests in U.S. dollar denominated fixed rate U.S. treasury securities with remaining maturity of greater than or equal to twenty years. It seeks to track the performance of the ICE U.S. Treasury 20+ Year Bond Index.
The fund will invest at least 90% of its assets in U.S. Treasury securities that the advisor believes will help the fund track the underlying index. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.
As we’ve covered in past articles, there’s an inverse relationship between interest rates and bond prices. As interest rates rise, bond prices fall ... and as interest rates fall, bond prices rise. How sensitive a bond is, or how significant the price movement may be in response to changes in interest rates is measured by a statistic called duration. Bonds with a shorter duration (short term bonds) are less sensitive to changes in interest rates than bonds with longer durations (long term bonds).
As its name implies, the iShares 20+ Year Treasury ETF invests in long term U.S. Treasury bonds, and has a duration of 15.6 years. This is a comparatively high duration, meaning that this ETF is quite sensitive to changes in interest rates. We can see the effect of duration in real time by looking at the past performance of this ETF (see below). Clearly, the performance statistics don’t look impressive. However, considering that interest rates were rising consistently and fairly dramatically during most of those years in an effort to get post-COVID inflation under control helps explain the results.
On the other hand, since interest rates have begun to fall as of late last year, bonds with longer durations have begun to fair well. Year-to-date through 10/16/2025 this fund has a total return (dividends and price appreciation) of +7.89%.
The Federal Reserve Board (the Fed) has two more policy setting meetings this year. One in late October, and the final for the year in early December. The Fed routinely informs us that interest rate decisions are based upon the most recent inflation and job market data, so at this point, nothing is etched in stone. However, the current consensus is that the Fed may lower interest rates by 0.25% or more at one or both of these meetings.
For many investors, in an effort to generate regular income and limit overall volatility, having a portion of their portfolio invested in high quality bond offerings is standard practice.
This fund has a current annual yield of 4.60% (dividends paid monthly) and the gross annual expense ratio is 0.15%.
Performance annualized and updated through 9/30/2025:
1-Year: -4.89%; 3-Year: -0.81%; 5-Year: -8.77%.
If you’re interested in this fund, or would like a portfolio review to determine if this fund might be an appropriate addition to your portfolio, please call Ted Black, CFP® at 888-878-0001, extension 3.
Statistics and information provided by Morningstar and iShares by BlackRock. Please visit the iShares website at www.ishares.com for the most recent performance information. The principal value and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns shown, unless otherwise indicated, are total returns, including any capital gains or losses and all dividend and capital gains distributions. The performance data quoted represents past performance and in no way guarantees future results. Mutual funds are not FDIC insured.
Mutual funds and Exchange Trade Funds are sold by prospectus. An investor should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. Please contact our office at 888-878-0001 to obtain a prospectus. Please read the prospectus carefully before you invest or send money.
Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.