TLTW versus TLT ETF - Which is Better?

$iShares 20+ Year Treasury Bond Buywrite Strategy ETF(TLTW)$  is a Turbo Charged version of this year 's most popular bond ETF $iShares 20+ Year Treasury Bond ETF(TLT)$  

$iShares 20+ Year Treasury Bond Buywrite Strategy ETF(TLTW)$   ETF seeks to track the investment results of an index that reflects a strategy of holding $iShares 20+ Year Treasury Bond ETF(TLT)$  while writing (selling) one month covered call options to generate income.  

TLTW provides a convenient, easy access and cost effective way to  options strategy on the US Treasury Market normally the domain of  institutions and experienced traders.

Even though TLTW was just launched last year on August 18 2022, it has registered inflows of USD 819 million  which is rather exceptional.  However  TLT  is more popular with inflows of USD 17.8 billion on bets for a long bond rebound.

What is the difference between TLT and TLTW?  TLT ETF is primarily invested in longer duration US Treasury Bonds of over 20 years. In contrast TLTW targets Treasury Bonds with variable interest rates, often appealing to investors seeking protection against rising interest rates.  So TLTW focuses on capitalising on the performance of floating rate Treasury Bonds.

The expense ratio of TLTW is 0.35% versus 0.15% for TLT.

Distributions are paid monthly for both TLTW and TLT.     TLTW distribution yield is a huge 17.91% versus 3.55% received by TLT. 

At the last closing price of USD 28.45, TLTW has a lower price point than TLT which closes at USD 92.99.  TLTW is certainly easier on the pockets. 

So for investors who are seeking dividend income, TLTW is a great ETF.  However for investors who are seeking capital growth TLT is a much better option. 

Performance wise TLTW is up 1.4% in the past 5 days but down 13% year todate.  In contrast TLT is up 2.9% in the past 5 days but down 8%  year todate. 

TLTW versus TLT - which is better?  The choice is up to individual investor.  Everyone has different goals in investing and different risk appetite.   

Investing is very much a personal decision and both TLTW and TLTW offer attractive regular dividends on a monthly basis which is a great source of passive income. 

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# 💰 Stocks to watch today?(22 Nov)

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  • Ah_Meng
    ·2023-12-02
    TOP
    Thanks for sharing the option. if I understand it correctly, this option sorts of hedges against interest rate reversal than TLT is doing? I have been building up my position in TLT equivalent… what will happen to the price of TLTW if the yield really crashes? Will it crashes along? What is your understanding?
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    • koolgalReplying toLionel8383
      Thanks for sharing your valuable insights 😍😍😍
      2023-12-03
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    • Lionel8383
      I would go for capital growth on the invested capital on TLT, should bond yields fall as the market starts to price in rate cuts in 2024.
      2023-12-02
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    • koolgal
      TLTW sacrifices capital growth for more dividend income due to its covered call strategy.
      2023-12-02
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  • Lionel8383
    ·2023-12-02
    TOP
    Personally I wouldnt compare the price per share, instead have a target of how much you want invested in treasury ETFs, then divide by the price per share. As TLTW invovles selling covered call options, this strategy could get easily undone should bond yields fall too quickly in a short period of time.
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    • koolgal
      Thanks for your valuable insights 😍😍😍
      2023-12-03
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  • Taurus Pink
    ·2023-12-02
    [暗中观察] [暗中观察] [暗中观察] [暗中观察]
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    • koolgal
      Have a beautiful Sunday 🌈🌈🌈
      2023-12-03
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    • koolgal
      Thanks for sharing my friend 😍😍😍
      2023-12-03
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  • EsmeT
    ·2023-12-04
    Great ariticle, would you like to share it?
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    • koolgal
      Best of luck 🍀🍀🍀
      2023-12-04
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    • koolgal
      Thanks 😍😍😍
      2023-12-04
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  • b1uesky
    ·2023-12-05
    Good morning. thk for sharing.
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    • b1ueskyReplying tokoolgal
      Have a nice day
      2023-12-05
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    • koolgal
      May you have a wonderful day 🍀🍀🍀🌈🌈🌈
      2023-12-05
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    • koolgal
      My pleasure 😍😍😍
      2023-12-05
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  • icycrystal
    ·2023-12-03
    thanks for sharing
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    • koolgal
      May you have a fabulous Sunday 🌈🌈🌈
      2023-12-03
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    • koolgal
      My pleasure 😍😍😍
      2023-12-03
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  • Omega88
    ·2023-12-04
    nice
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    • koolgal
      Thanks 😍😍😍
      2023-12-04
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  • zuma
    ·2023-12-02
    thx
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    • koolgal
      Have a great weekend.
      2023-12-02
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    • koolgal
      My pleasure 😍😍😍
      2023-12-02
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