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TLTW: A Hefty Yield And Margin Of Safety Against Rising Rates
The iShares 20+ Year Treasury BuyWrite Strategy ETF is rated a strong buy, offering attractive yield and downside protection versus traditional long-duration Treasury ETFs. TLTW's covered call strategy enhances income and cushions against rising yields, outperforming AGG and BND on a total return basis since July 2024. Current long-term Treasury yields provide a much healthier margin of safety than in 2021, with breakeven yield now nearly four times higher.
TLTW: Better Choice Than TLT For The Foreseeable Future
Over the past year, TLTW delivered a total return of roughly +10% compared to just under +5% for unhedged TLT. Newly appointed Fed Chair Kevin Warsh shocked markets with a hawkish tone on price stability and a simplified, data-dependent policy statement. The lack of explicit forward guidance and emerging market probabilities for 2026 rate hikes means fixed-income volatility is structural.
Something Unusual Is Happening Around TLTW That You Need To Know
iShares 20+ Year Treasury Bond BuyWrite Strategy ETF is rated HOLD due to increased market uncertainty and capped upside potential. TLTW's buy-write structure limits gains to 2% monthly, making it (IMO) less attractive if TLT rallies sharply amid changing macro conditions. Current low implied volatility and shifting inflation expectations reduce (IMO) the competitiveness of option premiums at monthly roll.
iShares 20+ Year Treasury Bond BuyWrite Fund Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TJD Thomas John Drogan PR Inc.IPAL SECURITIES Inc. | 20,038 | $454,418.22 | $436,527.83 | -$17,890.39 | -3.94% |
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 1,702 | $39,460.42 | $37,044.03 | -$2,416.39 | -6.12% |
 John Ledford FWG Holdings LLC | 81,750 | $1.96M | $1.78M | -$185,934.07 | -9.47% |
 Kimberly Cappellano Private Wealth Asset Management LLC | 5,062 | $114,740.99 | $110,174.43 | -$4,566.56 | -3.98% |
| SE Sima Elimelech Activest Wealth Management | 3 | $76.92 | $65.28 | -$11.64 | -15.13% |
iShares 20+ Year Treasury Bond BuyWrite Fund (TLTW) FAQ
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Does it pay dividends? What is the current yield?
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iShares 20+ Year Treasury Bond BuyWrite Fund Profile
| BATS Exchange | US Country |
Overview
The company, as described, is clearly focused on options trading, specifically the writing of call options on shares that it holds. This strategy is often referred to as a covered call strategy. The goal of such a strategy is typically to generate additional income from the premiums received for selling the call options, on top of any dividends or gains from the underlying shares themselves. This approach is considered a more conservative investment strategy, appealing to investors looking for income or to potentially reduce the volatility of their portfolio. Importantly, by ensuring that the call options written are always covered by holding the underlying shares, the company mitigates the risk of having to deliver shares it does not own, which can be a significant risk in options trading.
Products and Services
- Covered Call Option Writing
This service involves the fund writing (selling) call options on stocks that it already owns ("covered"). This strategy allows investors to potentially earn income from the option premiums in addition to any gains from the stocks themselves. However, it also means that there is a cap on the maximum gain from the stocks if the call options are exercised (i.e., if the stock price exceeds the strike price of the call options, the fund must sell the stocks to the call buyer at the strike price).
