Analysts suggest investors tilt portfolios toward long-term U.S. Treasury bonds via TLT ETF
Mike Khouw highlights rising bond market volatility and warns that longer-maturity Treasurys face significant rate risk.
Market analysts note that the iShares 20+ Year Treasury Bond ETF (TLT) holds bonds with maturities ranging from just under 20 years in February 2046 to nearly 30 years in August 2056. Michael Khouw points out that while U.S. Treasury bonds carry minimal credit risk due to sovereign backing, they remain exposed to interest rate movements. When rates rise, bond prices decline, and longer-duration securities suffer greater price drops than shorter-term instruments. The fund recorded a loss of approximately 52% in year-to-date returns as long-term interest rates increased from late 2020 through the end of 2023. Khouw argues that investors must consider rate risk alongside credit risk when evaluating fixed-income assets.
