##  [# ETF Of The Week: Long Term Treasuries Hot](/sections/news/etf-week-long-term-treasuries-hot) 

 

# ETF Of The Week: Long Term Treasuries Hot

 

 

iShares' longest-maturity Treasury ETF raking in cash this month.



 

 

 

 

 [![Lara](/sites/default/files/styles/author_image_icon/public/2026-02/Lara4.PNG?itok=XaJvTzN- "Lara")](/contributors/lara-crigger) 

[By Lara Crigger](/contributors/lara-crigger)

 Sep 14, 2018

 Edited by: Lara Crigger

 

 

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Ahead of this month's Fed meeting, it seems investors are betting on low rates.

After a fairly anemic summer of inflows, the [iShares 20+ Year Treasury Bond ETF (TLT)](https://www.etf.com/tlt) has suddenly begun raking in cash. The flows began the day after Labor Day:

![](/sites/default/files/images/tltflows.jpg)

*Sources: ETF.com, FactSet; data as of Sept. 12, 2018*

Since Sept. 4, TLT has pulled in $1.8 billion in new net investment assets—or 19% of the fund's total current assets under management of $9.16 billion (read: "[ETF Weekly Flows Show Home Bias](https://www.etf.com/sections/weekly-etf-flows/weekly-etf-flows-2018-09-06-2018-08-31)").

Meanwhile, TLT's nearest competitors, the [SPDR Portfolio Long Term Treasury ETF (SPTL)](https://www.etf.com/SPTL) and the [Vanguard Long-Term Treasury Index ETF (VGLT)](https://www.etf.com/VGLT), have only seen inflows over the same period of $10 million and $2 million, respectively.

**TLT: Trading Vehicle**

Why has TLT in particular drawn the flows?

For starters, TLT is by far the largest and most liquid [long-term bond ETF](https://www.etf.com/topics/long-term-etfs) on the market, and as such, traders have long turned to the fund as a convenient trading vehicle to express their short-term views.

TLT boasts a pennywide spread and an average daily share volume of roughly 6.5 million shares, worth $777 million. That's an order of magnitude greater than the trading volumes of either SPTL or VGLT, worth $12 million and $8 million per day, respectively.

**High Duration Not A Barrier**

But TLT has also the third-highest duration of the 47 [Treasury ETFs](https://www.etf.com/topics/treasury-etfs) on the market. Duration is a measure of a fixed income investment's sensitivity to changes in interest rates—a key metric in understanding how a bond ETF will perform if and when the Fed raises rates.

TLT's duration of 17.47 means that its value should decrease 17.47% for every 1% rise in interest rates. For every 1% drop, meanwhile, TLT's value should rise by the same amount (read: "[Fixed Income ETFs: Understanding Duration](https://www.etf.com/etf-education-center/21013-fixed-income-etfs-understanding-duration.html?nopaging=1)").

In other words, rising interest rates would erode TLT's value faster than almost any other Treasury ETF on the market.

So the fact that investors are plowing their cash into this fund implies that they believe TLT's sensitivity to rising rates won't be a problem; meaning, they believe the Fed plans to keep rates low when it meets again on Sept. 26.

Curiously, that conservative outlook runs counter to what the Fed itself said at its July 31-Aug. 1 meeting, where the Federal Open Markets Committee reaffirmed its commitment to raising rates at a pace of 0.25% per quarter. Speculation has swirled that the ongoing trade war may eventually change the Fed's mind about raising rates, but so far, there has been little evidence in support.

**About TLT**

TLT tracks an index of U.S. Treasury debt with remaining maturities of 20 years or greater. It's the longest maturity product in [iShares](https://www.etf.com/topics/ishares-etfs)' Treasury ETF suite.

TLT charges an expense ratio of 0.15%, making it more than twice as expensive as both SPTL (which charges 0.06%) and VGLT (which charges 0.07%).

Year-to-date, TLT is down 4.81%.

*Contact Lara Crigger at <lcrigger@etf.com>*



 

 

 [ Lara Crigger ](/contributors/lara-crigger) 

 

 

  Lara Crigger is a veteran financial writer with more than twenty years' experience writing about ETFs, markets, and investor education. Formerly…   [View Bio](/contributors/lara-crigger)

 



 

 


 Related Topics  [Fixed Income](http://www.etf.com/topics/fixed-income) 

 [Bond](http://www.etf.com/topics/bond) 

 [Treasury](http://www.etf.com/topics/treasury) 

 [Blackrock](http://www.etf.com/topics/blackrock) 

 [ICE U.S. Treasury 20+ Year Bond Index](http://www.etf.com/topics/ice-us-treasury-20-year-bond-index)