iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

TLTW uses a fund-of-fund approach to passively track an index that measures the performance of holding shares of the iShares 20+ Year Treasury Bond ETF and writes one-month, out-of-the-money call options against the shares.

iShares 20+ Year Treasury Bond ETF

TLTW, a passively managed fund with a 0.35% expense ratio, writes one-month covered call options on TLT, boosting yield but capping gains. TLTW's TTM yield is 14.16%, significantly higher than TLT's 3.95%, making it attractive for income-focused investors despite its price downtrend. TLTW outperforms TLT in downtrends due to its income from premiums but underperforms in rapid recoveries.

TLTW: Bullish Bonds? Then Avoid TLTW

iShares 20+ Year Treasury Bond Buywrite Strategy ETF buys TLT and sells call options, generating higher income but capping upside potential. TLTW has underperformed in price return but offers significantly higher income, making it attractive for aggressive income investors despite volatility risks. Its total return has eclipsed its underlying. The Fund's passive strategy involves selling ATM options monthly, which has outperformed TLT in total return but may result in increased capital losses.

TLTW: 15% Yield With Favorable Macro

TLTW's high yield (15.34%) and effective rolling method make it an attractive investment, despite potential risks from sudden TLT price increases. In my opinion, is a good time to accumulate TLTW as a hedge for fixed-rate portfolios due to the current macroeconomic scenario and yield curve steepening. The steepening yield curve and ongoing Fed rate cuts suggest long-duration Treasury yields may not decrease significantly, making TLTW a strategic addition.

TLTW ETF: Maybe It's Time To Accumulate

TLTW invests in long-term treasuries and sells covered calls on its holdings. The fund's high duration and covered call strategy result in substantial income but also consistent capital losses and distribution cuts. Its 14.9% distribution yield and potential outperformance during stable or slightly declining interest rates make it a buy despite significant risks.

TLTW: Covered Call ETF Focusing On Long-Term Treasuries, Strong 14.9% Yield, Risks Abound

Long-term Treasury bonds are performing well with the possibility of a rate cut cycle, making exposure to them beneficial. The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF offers enhanced income through covered call options. TLTW provides higher income compared to traditional Treasury bonds, with potential for outperformance if rates remain stable or decline.

TLTW Makes Sense For Income And Rate Cut Speculation

The TLTW ETF is a great way to get income (until it isn't), under the current rate conditions. TLTW features a 15.5% monthly dividend from its covered call selling, a very reliable income source due to the volatility of TLT. TLT should also be part of the core holding to build wealth in a possible rate decline cycle.

TLTW: Time To Go Long With Long Treasury ETFs

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This ETF Edition highlights 12 less covered exchange-traded fund ideas on Seeking Alpha from June 1st - July 15th. ETFs in our first edition include Saba Closed-End Funds, iShares 20+ Year Treasury Bond BuyWrite Strategy, Global X Russell 2000 Covered Call, Invesco S&P 500 GARP, and more. Managed futures are in focus with one ETF idea where the author writes they "offer potential for maximizing income, boosting returns, and reducing volatility in a portfolio".

Undercovered Dozen ETF Edition: China, Bitcoin, Cybersecurity, Motley Fool +

Major rallies in long-term Treasuries that cause TLTW's covered call strategy to underperform are rare. iShares 20+ Year Treasury Bond Buywrite Strategy ETF offers an attractive monthly distribution with a yield above 10%. The Fund utilizes a covered call options strategy with the iShares 20+ Year Treasury Bond Buywrite Strategy ETF as its core asset to enhance income.

TLTW: A Buy Until Recession Imminent

iShares 20+ Year Treasury Bond Buywrite Strategy ETF offers exposure to 20-year treasury bonds and higher income through call options. The TLTW product captures volatility premium and coupons while giving up on potential price rallies. The yield on the TLTW ETF has decreased due to lower volatility, and future call selling may result in lower returns.

Why I'm Fading The 11.58% Distribution Yield Of The TLTW ETF

Amid the popularity of covered call writing equity ETFs, TLTW, which does so with TLT as its base, is more intriguing to me currently.

TLTW: Covered Call ETF With 11% Yield Plus Upside Potential

The iShares 20+ Year Treasury Bond Buy-Write Strategy ETF has not performed well compared to TLT since long rates peaked in October 2020. As long rates moved lower from their October 2023 highs, TLT outperformed TLTW by a factor of 3x. TLTW is hampered by the low implied volatility of TLT and the systematic strategy it employs to write covered calls.

TLTW: Not The Right Way To Trade Long Rates Or Volatility

"Investment products" offering double-digit yields, such as buy-write or option strategy ETFs, are almost always unsuitable for individual retired investors. The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF has a high yield, but it is not an actual dividend but a return of capital. Today, TLTW's accurate dividend yield is 3.5%. Any gains after that are from option premiums, which must be reinvested to maintain a steady capital base.

TLTW Is For Speculators, Not Income Investors

TLTW's buy/write strategy has led to underperformance, with TLT returning 14% compared to TLTW's 5% since October. This is because TLTW's monthly returns are capped. Modeling long-term yields as short-term yields plus term premium, the 10-year yield has recently reached neutral and is unlikely to decline further. In the long-run, long-term yields are expected to rise due to persistently large government deficits swamping demand for treasuries.

TLTW: Weakness Of Strategy On Full Display

The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF is designed to offer returns similar to holding 20-year treasury bonds while adding income through writing monthly call options. This strategy aims to benefit when bond prices are stable, earning from both the yield of the bonds and the decay of the call options. TLTW has shown a significantly higher 12-month yield compared to the traditional iShares 20+ Year Treasury Bond ETF.

TLTW: Supercharged By High Volume Environment To 19.85% Yield

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Imagine stocks or funds that pay-out their dividends once-a-month! Unlike waiting for quarterly, semi-annual or (ugh) annual payouts, your angst awaiting money is reduced by 300%, or more!. These January U.S. exchange-traded monthly-paid (MoPay) dividends, upsides, and net-gains include: 1. Stocks by-yield (83); 2. Stocks by price-upside (30); 3. Closed-End-Investments, Exchange-Traded-Funds & Notes (CEICs/ETFs/ETNs) by-yield >10.4% (80). Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs. Equities; 4. Fund risks/rewards. All per prices as of 1/11/24.

January's 83 Monthly Paid Dividend Stocks And 80 Funds

TLTW invests in long-term treasuries and sells covered calls on its holdings.

TLTW: Still Too Risky, Even With A 19.9% Yield

The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF is a good option for investors seeking income from call option sales while sacrificing capital gains. TLTW has underperformed recently due to volatility in the TLT, but conditions are now favorable as real yields are elevated and yield pressures are more evenly balanced. The main risk is sustained fiscal deficits which could cause a surge in inflation, but the Fed is likely to suppress yields if they threaten to undermine fiscal stability.

TLTW: Bond Volatility Should Ease In 2024

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Hello! This is MarketWatch reporter Isabel Wang bringing you this week's ETF Wrap. In this week's edition, we look at ETF strategies that have exploded in popularity in 2023, and whether they will continue to gain momentum in the year ahead.

These ETF strategies were big winners in 2023. Here's where one CFRA analyst sees them going next year.

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Imagine stocks or funds that pay out their dividends once a month! Unlike waiting for quarterly, semi-annual or (ugh) annual payouts, your angst awaiting money is reduced by 300% or more! These December U.S. exchange-traded monthly-paid (MoPay) dividends, upsides, and net gains include: 1. Stocks by yield (79); 2. Stocks by price upside (30); 3. Closed-End-Investments, Exchange-Traded Funds & Notes (CEICs/ETFs/ETNs) by yield >9.5% (80). Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs. Equities; 4. Fund risks/rewards. All per prices as of 12/8/23.

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iShares 20+ Year Treasury Bond BuyWrite Strategy ETF has an 18% yield, but it comes with risks associated with the buy-write strategy. The fund restricts participation in market gains above the strike price and exposes investors to potential losses during market downturns. TLTW's yield may not consistently offset share price declines, and declining volatility in 2024 may reduce buy-write strategy premiums.

TLTW And The Issues With Buy-Write Strategies

The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF offers enhanced income, diversification, and easy access to the U.S. Treasury market. TLTW is concentrated in the duration factor, meaning it responds more significantly to changes in interest rates compared to other fixed income ETFs. TLTW's covered call strategy provides a ceiling on price gains, additional income, and some downside protection, but may limit capital gains in a declining rate environment.

TLTW: A Subpar Idea When Interest Rates Are Set To Normalize

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The U.S. ETF industry continues to evolve. In the first 10 months of 2023, fixed income ETFs gathered more than 40% share of the net inflows, despite representing just 20% share of the market.

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iShares by BlackRock has introduced the TLTW ETF, which invests in TLT and uses an option overlay strategy to generate additional income. TLTW has experienced a decline in value due to higher treasury yields, but may be finding a bottom as yields start to sell off. TLTW is a speculative investment that is dependent on the Fed's actions, but could provide a double-digit yield for investors.

TLTW's Covered Call Strategy On Bonds To Generate 18% Is Speculative But Interesting

The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF declined by over 8% due to increased treasury bond issuances and rising yields. The Treasury Department's Quarter Refunding (QRA) may act as a liquidity booster for financial markets, leading to a neutral outlook on TLTW. The longer-term fiscal situation for the U.S. government remains concerning, with interest expenses projected to reach 4.5% of GDP by 2033.

TLTW: Raising To Hold On Treasury Surprise (Rating Upgrade)

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Imagine stocks or funds that pay out their dividends once a month! Unlike waiting for quarterly, semi-annual or (ugh) annual payouts, your angst waiting for money is reduced by 300%, or more! These October U.S. exchange-traded monthly-paid (MoPay) dividends, upsides, and net-gains include: 1. Stocks by-yield (82); 2. Stocks by price-upside (30); 3. Closed-End-Investments, Exchange-Traded-Funds & Notes (CEICs/ETFs/ETNs) by-yield >9.5% (80).

News for iShares 20+ Year Treasury Bond BuyWrite Strategy ETF ETF (TLTW)