Generated July 2026 from current fund data.
Overview
IEF and TLT are both iShares Treasury bond ETFs that track U.S. government debt but operate at different maturity points along the yield curve. IEF focuses on intermediate Treasuries (7–10 years), while TLT holds long-duration bonds (20+ years). The key distinction is duration risk: TLT's longer maturity profile makes it far more sensitive to interest-rate moves, which drives both its higher yield and its elevated price volatility.
How they differ
The biggest difference is duration. TLT's beta of 2.38 is roughly double IEF's 1.17, meaning TLT's price swings twice as hard when Treasury yields shift. That duration premium also shows up in yield: TLT distributes 4.46% annually versus IEF's 3.97%. Both charge 0.15% in expenses and pay monthly, so the yield gap flows directly from holding longer bonds.
On the funding side, IEF commands larger assets at $46.9B to TLT's $40.7B, giving IEF a modest liquidity advantage. Both track official ICE Treasury indexes and have identical inception dates (July 2002), so the structural differences are purely about maturity exposure and the rate sensitivity that comes with it.
Who each is best for
- IEF: Fits investors who want steadier intermediate-duration Treasury income with less price fluctuation in a rising-rate environment. Appeals to those building a bond ladder or seeking a core fixed-income holding that won't amplify volatility in a rising yield scenario.
- TLT: Designed for investors comfortable with significant price swings in exchange for higher current yield and maximum interest-rate sensitivity. Aligns with allocations favoring capital appreciation potential if yields fall, or with longer time horizons that can absorb near-term mark-to-market losses.
Key risks to know
- Interest-rate duration risk. TLT's 2.38 beta means a 1% rise in long-term yields could produce a 2.4% price decline; IEF's 1.17 beta would experience roughly half that loss. In a sustainably higher-rate regime, TLT's NAV could remain under pressure for years.
- Reinvestment-rate mismatch. Both funds hold declining coupons relative to longer-duration debt elsewhere in the curve. If longer yields remain elevated as bonds mature, monthly distributions may not reinvest at current yields, creating a drag on total return.
- Curve flattening or steepening. If the yield curve shifts unevenly—long rates rising while intermediate rates hold steady—TLT's relative performance versus IEF could deteriorate. Conversely, a steepening (long rates falling relative to intermediate) would favor TLT.
Bottom line
Both funds offer exposure to genuine U.S. Treasuries at ultra-low expense ratios, but they serve different rate-scenario bets. If you prioritize stability and moderate yield with limited downside if rates rise, IEF's intermediate maturity fits that goal. If you're betting on falling long-term yields or can tolerate significant price swings for higher current income, TLT's duration offers that trade-off. Past performance does not predict future returns, and both are subject to the full interest-rate sensitivity embedded in their respective Treasury indexes.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
