TLT vs HYG ETF Comparison: AI Score, Valuation, Performance and Upside
TLT and HYG are both bond funds that behave almost oppositely. TLT carries no credit risk and enormous interest rate risk, and it tends to rise when investors are frightened. HYG carries modest interest rate risk and substantial credit risk, and it tends to fall alongside equities when the economy deteriorates.
Use this TLT vs HYG comparison to recognise that the label bond fund covers two entirely different risks. Buying duration is a bet on rates and often a hedge. Buying credit is a bet on the economy and correlates with equities. Holding high yield as your defensive allocation can leave you with two versions of the same risk.
HYG holds the edge across 1 of 5 key metrics in this comparison. HYG has delivered stronger 1-year price return (+2.08% vs -6.77% for TLT).
- Want a diversifier that can rise during growth shocks
- Prefer no credit risk in the fixed income sleeve
- Hold a view that long-term rates will fall
- Accept very large price swings and no inflation protection
- Want high current income from corporate credit
- Prefer lower interest rate sensitivity than long Treasuries
- Understand it behaves as a risk asset rather than a safe haven
- Accept default risk that rises in downturns
| Metric | TLT | HYG |
|---|---|---|
| ETF scorei | 14.0 | 42.0 |
| Latest closei | $79.32 | $77.86 |
| 1M returni | -4.41% | -2.02% |
| 6M returni | -5.21% | +1.93% |
| 1Y returni | -6.77% | +2.08% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | TLT | HYG |
|---|---|---|
| 1Y ago | $9.76K (-2.4%) started 2025-09-25 | $10.85K (+8.5%) started 2025-09-25 |
| 5Y ago | $7.84K (-21.6%) started 2021-09-27 | $16.23K (+62.3%) started 2021-09-27 |
| 10Y ago | $10.65K (+6.5%) started 2016-09-26 | $30.76K (+207.6%) started 2016-09-26 |
Hypothetical — past performance does not guarantee future results.
| Metric | TLT | HYG |
|---|---|---|
| Expense ratioi | N/A | 0.49% |
| Total assets (AUM)i | N/A | $16.19B |
| Dividend yieldi | N/A | 5.88% |
| Trailing P/Ei | N/A | N/A |
| Betai | N/A | 0.42 |
| 52-week change | -6.77% | 2.08% |
| Metric | TLT | HYG |
|---|---|---|
| 1Y returni | -6.77% | +2.08% |
| 6M returni | -5.21% | +1.93% |
| 1M returni | -4.41% | -2.02% |
| 1Y Sharpe ratio | -1.19 | -0.61 |
| Betai | N/A | 0.42 |
| Dividend yieldi | N/A | 5.88% |
| 5Y CAGR | -8.37% | +3.27% |
Over the past year, TLT and HYG have moved moderately in the same direction (correlation of 0.51), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | TLT | HYG |
|---|---|---|---|
| 1Y | Growthi | -6.77% | +2.08% |
| CAGRi | -6.78% | +2.08% | |
| Volatilityi | 9.35% | 3.88% | |
| Sharpe ratioi | -1.19 | -0.61 | |
| Sortino ratioi | -1.57 | -0.83 | |
| Max drawdowni | 10.32% | 2.34% | |
| Current drawdowni | 10.32% | 2.04% | |
| Avg drawdowni | 4.04% | 0.39% | |
| Ulcer Indexi | 4.63% | 0.62% | |
| Max daily dropi | 1.90% | 0.93% | |
| Max wkly dropi | 2.96% | 1.10% | |
| 5Y | Growthi | -35.36% | +17.44% |
| CAGRi | -8.37% | +3.27% | |
| Volatilityi | 15.69% | 7.54% | |
| Sharpe ratioi | -0.77 | -0.13 | |
| Sortino ratioi | -1.05 | -0.18 | |
| Max drawdowni | 43.70% | 15.79% | |
| Current drawdowni | 38.93% | 2.04% | |
| Avg drawdowni | 30.64% | 3.58% | |
| Ulcer Indexi | 32.06% | 5.60% | |
| Max daily dropi | 3.42% | 3.35% | |
| Max wkly dropi | 6.42% | 6.34% | |
| 10Y | Growthi | -23.40% | +53.19% |
| CAGRi | -2.63% | +4.36% | |
| Volatilityi | 14.82% | 8.19% | |
| Sharpe ratioi | -0.41 | 0.01 | |
| Sortino ratioi | -0.57 | 0.02 | |
| Max drawdowni | 48.35% | 22.03% | |
| Current drawdowni | 43.98% | 2.04% | |
| Avg drawdowni | 22.34% | 2.42% | |
| Ulcer Indexi | 27.28% | 4.41% | |
| Max daily dropi | 6.67% | 5.50% | |
| Max wkly dropi | 7.78% | 12.87% |
| Category | TLT | HYG |
|---|---|---|
| Fund name | iShares 20+ Year Treasury Bond ETF | iShares iBoxx $ High Yield Corporate Bond ETF |
| Type | ETF | ETF |
| Expense ratioi | N/A | 0.49% |
| Total assets (AUM)i | N/A | $16.19B |
| Dividend yieldi | N/A | 5.88% |
- No meaningful default risk from US government obligations
- Tends to rally during growth scares, providing genuine portfolio diversification
- Highly liquid instrument for expressing rate views
- Considerably higher yield than government or investment grade bonds
- Shorter duration means less sensitivity to interest rate moves
- Diversified across many issuers, limiting the impact of individual defaults
- Extreme duration produces equity-sized drawdowns when rates rise
- No protection against inflation eroding fixed coupons
- Yield is lower than credit-bearing alternatives
- Behaves much more like equities than like government bonds in a downturn
- Default risk rises precisely when the economy weakens
- Underlying bond liquidity can deteriorate in stressed markets
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