TLT & BIL Score Billion Dollar Days This Week

Investors put nearly $1 billion into two separate fixed income ETFs in a single session earlier this week, as demand for treasury investments showed no sign of abating. 

The iShares 20+ Year Treasury Bond ETF (TLT) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) had inflows of $1.2 billion and $981 million, respectively, on Tuesday, according to Bloomberg data. 

For TLT, it was the second-largest daily inflow of the year, behind $1.8 billion pulled in July 20. Likewise, for BIL, it was the second-largest inflow behind a $1.5 billion pick up Oct 5. 

The inflows bolstered the year-to-date hauls for the pair of ETFs, both of which have been hugely popular in 2023. Since the start of the year, TLT has pulled in $20.2 billion, while BIL has gathered $8.7 billion. 

But aside from being extremely popular Treasury ETFs, TLT and BIL couldn’t be more different; the securities they hold lie on opposite ends of the maturity spectrum. 

TLT and BIL's Less-than-Stellar Performances

TLT holds bonds maturing in 20-to-30 years, while BIL holds bills maturing in 1-to-3 months. TLT is highly sensitive to interest rate movements, while BIL is largely unaffected by them. 

So far this year, BIL has returned nearly 4%, while TLT has lost almost 14%. 

Of course, this isn’t an either-or situation. Many investors own both T-bill ETFs like BIL and long bond ETFs like TLT. They serve different purposes and the fact that both are seeing strong demand in a year in which interest rates have surged to more than 5% may not come as a surprise.  

TLT, with $37.8 billion in assets, tracks a market-weighted index of debt issued by the US Treasury with remaining maturities of 20 years or more.

BIL, with assets under management of $34.5 billion, tracks a market-weighted index of all publicly issued zero-coupon US Treasury bills with a maturity of at least 1 month, but less than 3 months.