Comparative Analysis of ETFs: iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW) vs. iShares 20+ Year Treasury Bond ETF (TLT)

Comparative Analysis of ETFs: iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW) vs. iShares 20+ Year Treasury Bond ETF (TLT)

TLTW – iShares 20+ Year Treasury Bond Buywrite Strategy ETF

  • Net Assets: 254.29M USD
  • Year-to-Date (YTD) Daily Total Return: 9.75%
  • Yield: Not Available
  • Annual Report Expense Ratio (net): 0.35%
  • NAV (Net Asset Value) as of Jun 16, 2023: $33.22
  • NAV Total Return as of Jun 15, 2023 YTD: 9.97%
  • This ETF seeks to track the investment results of an index that reflects a strategy of holding the iShares 20+ Year Treasury Bond ETF while writing (selling) one-month covered call options to generate income. It is suggested that it may provide enhanced income compared to traditional U.S. Treasury bonds, may outperform in periods of rising rates, and provides easy access to a custom options overlay strategy on the U.S. Treasury market​1​​2​.

TLT – iShares 20+ Year Treasury Bond ETF

  • Net Assets: 38.44B USD
  • YTD Daily Total Return: 4.38%
  • Yield: 2.85%
  • Annual Report Expense Ratio (net): 0.15%
  • NAV as of Jun 16, 2023: $102.55
  • NAV Total Return as of Jun 15, 2023 YTD: 4.94%​3​​4​.

TLT is a straightforward ETF that aims to track the investment results of an index composed of U.S. Treasury bonds with maturities of over 20 years. It provides exposure to U.S. Treasury bonds that mature after 20 years and is a common choice for investors seeking to add long-term government bonds to their portfolio.

Comparative Analysis of ETFs: iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW) vs. iShares 20+ Year Treasury Bond ETF (TLT)

Here is a preliminary comparison based on the data

Fees: TLT has a lower expense ratio (0.15%) compared to TLTW (0.35%).

Yield: TLT has a yield of 2.85%. Yield information is not available for TLTW.

Net Assets: TLT has significantly larger net assets (38.44B USD) compared to TLTW (254.29M USD).

Performance: As of mid-June 2023, TLTW has a higher YTD return (9.97%) compared to TLT (4.94%).

As for when to hold TLT vs TLTW, this would depend on your investment strategy and market outlook:

  • TLTW: You might consider this ETF if you are looking for potentially enhanced income compared to traditional U.S. Treasury bonds and believe it may outperform in periods of rising rates. The strategy of writing covered call options can generate additional income, but it also caps the upside potential if bond prices rise significantly.
  • TLT: This could be a more suitable choice if you are seeking long-term exposure to U.S. Treasury bonds with lower fees. It could serve as a hedge against market downturns, as government bonds are typically considered safer assets.

Please note that it’s crucial to consider your personal investment goals, risk tolerance, and time horizon before deciding which ETF to invest in. You might also want to consult with a financial advisor to understand these options better.

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  • Com21.com's avatar
    Com21.com June 17, 2023 9:05 pm

    The TLTW offers investors long-term bond exposure with enhanced yield in exchange for limited upside in the event of a sharp rise in bond prices. This ETF therefore makes sense for those looking to take advantage of elevated yields but also looking to protect against further near-term declines. It should also appeal as an alternative to TLT to those who anticipate a gradual rather than sharp decline in yields. That said, the TLT should still be expected to post strong gains if we see a crash in yields.