30-year Treasury yield just topped 5%, its highest since 2007, sending iShares 20+ Year Treasury Bond ETF's $42.9 billion holdings (effective duration over 15 years) into steep losses. TLT has lost 28.5% over five years while now offering a 30-day SEC yield near 5%.
The 30-year Treasury yield breached 5% for the first time since 2007, triggering heavy outflows from long-duration debt and driving TLT’s online search queries to exceed competitors by over 7x as investors gauge risk.
The iShares 20+ Year Treasury ETF manages $42.9 billion in assets, holds 48 of the longest-dated U.S. government bonds with a weighted average maturity of 25.8 years, and carries an effective duration above 15 years with a 0.20% expense ratio.
TLT has suffered a 28.5% loss over the past five years, a -0.4% one-year total return and a -2.7% annualized return over three years, slightly underperforming its benchmark by ten basis points over five years.
Persistent federal deficits, sticky inflation and diminished foreign demand have propelled long-term yields higher, but rising yields have also lifted TLT’s 30-day SEC yield to near 5%, enhancing its income cushion while rates remain elevated.
