Investors Pull $2.2B From TLT Amid Declining Performance

Investors Pull $2.2B From TLT Amid Declining Performance

The ETF has sunk 3% so far in August amid expectations the Fed would keep interest rates high.

Finance Reporter
Reviewed by: Lisa Barr
Edited by: Ron Day

Investors drained more than $2 billion this month from TLT, the largest long Treasury bond ETF, on interest rate concerns in a reversal of what had been massive inflows as investors sought safe havens.    

The exodus from the iShares 20+ Year Treasury Bond ETF (TLT) and the ETF’s drop in performance come as investors anticipate the Federal Reserve will keep interest rates high.  

The Fitch Ratings downgrade of the U.S. credit rating and larger-than-expected Federal budget deficits have also contributed to the fund’s decline in performance, according to Senior Analyst Sumit Roy.   

Demand surged for Treasuries earlier this year, and especially Treasury bond ETFs. Between January and the end of July, TLT brought in $16.7 billion in flows, according to data. In August, the fund was up 2%. Yet this month alone, $2.16 billion has been sapped from the fund, as many investors are turning to equity returns in the market rather than long bond yields.    

The outflows are the highest drawn from the fund in a single week since 2020, Bloomberg first reported.   

“Long bonds have been having a terrible month,” said Roy.   

The biggest outflow from the fund came on Aug. 10, as investors took out $884 million.    

Investors Shunning Longer-Term Fixed Income 

Despite high yield opportunities, investors are turning away from longer-term fixed income, as long Treasury ETF performances decline. Yields on 10- and 30-year Treasuries are near their highest levels since November.    

The Fitch Ratings downgraded the U.S.’ debt rating from AAA to AA­+ in early August, which dampened investor sentiment about Treasury bonds.    

TLT is down about 15% from this time last year, according to data.    

The fund holds long-term U.S. Treasury bonds. Its top holding, worth 10% of the fund, has a maturity date of 2051. 


Contact Lucy Brewster at [email protected]   

Lucy Brewster is a finance reporter at covering asset managers, emerging technologies, and regulation. She hosts webinars and appears on Exchange Traded Fridays,’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.