TLT vs IEF Stock Comparison: AI Score, Valuation, Performance and Upside
TLT and IEF are both U.S. Treasury bond ETFs that provide interest rate exposure and portfolio hedging benefits, but at very different risk levels. TLT's 16–18 year duration creates dramatic price swings with interest rate changes, offering the highest potential gains if rates fall but the largest losses if rates rise. IEF's 7–8 year duration provides a more moderate Treasury bond experience suitable as a core bond allocation.
TLT vs IEF is a question of duration risk — how much interest rate sensitivity does an investor want? TLT maximizes rate-decline upside (and rate-rise downside), while IEF provides a more balanced fixed-income holding with meaningful but less extreme rate sensitivity.
TLT and IEF are closely matched — they split the tracked metrics evenly. IEF has delivered stronger 1-year price return (-2.08% vs -5.66% for TLT).
- prefer maximum duration for a leveraged bet on falling long-term interest rates
- value the strongest equity hedge among Treasury ETFs during risk-off market events
- want to express a view that the Fed will cut rates significantly and long-term yields will fall
- are comfortable with 50%+ potential drawdowns if long-term rates rise over a sustained period
- prefer intermediate-duration Treasury exposure as a core bond allocation in a diversified portfolio
- value meaningful yield pickup over cash and short-term bonds with less volatility than TLT
- want Treasury bonds as a portfolio diversifier with some equity negative correlation but manageable rate risk
- are comfortable with moderate rate sensitivity in exchange for a more stable fixed-income holding
| Metric | TLT | IEF |
|---|---|---|
| ETF scorei | 22.9 | 24.4 |
| Latest closei | $81.73 | $91.50 |
| 1M returni | +5.49% | +2.75% |
| 3M returni | -0.18% | -1.07% |
| 6M returni | -2.30% | -1.73% |
| 1Y returni | -5.66% | -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 | IEF |
|---|---|---|
| 1Y ago | $9.87K (-1.3%) started 2025-11-03 | $10.16K (+1.6%) started 2025-11-03 |
| 5Y ago | $8.07K (-19.3%) started 2021-11-03 | $10.9K (+9.0%) started 2021-11-03 |
| 10Y ago | $11.47K (+14.7%) started 2016-11-03 | $13.59K (+35.9%) started 2016-11-03 |
Hypothetical — past performance does not guarantee future results.
| Metric | TLT | IEF |
|---|---|---|
| Expense ratioi | N/A | 0.15% |
| Total assets (AUM)i | N/A | $41.56B |
| Dividend yieldi | N/A | 4.14% |
| Trailing P/Ei | N/A | N/A |
| Betai | N/A | 0.27 |
| 52-week change | -5.66% | -2.08% |
| Metric | TLT | IEF |
|---|---|---|
| 1Y returni | -5.66% | -2.08% |
| 6M returni | -2.30% | -1.73% |
| 3M returni | -0.18% | -1.07% |
| 1M returni | +5.49% | +2.75% |
| 1Y Sharpe ratio | -1.01 | -1.30 |
| Betai | N/A | 0.27 |
| Dividend yieldi | N/A | 4.14% |
| 5Y CAGR | -7.76% | -1.48% |
Over the past year, TLT and IEF have moved strongly in the same direction (correlation of 0.91), 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 | IEF |
|---|---|---|---|
| 1Y | Growthi | -5.43% | -2.04% |
| CAGRi | -5.44% | -2.04% | |
| Volatilityi | 9.57% | 4.97% | |
| Sharpe ratioi | -1.01 | -1.30 | |
| Sortino ratioi | -1.36 | -1.72 | |
| Max drawdowni | 12.82% | 7.13% | |
| Current drawdowni | 7.60% | 4.43% | |
| Avg drawdowni | 4.68% | 2.46% | |
| Ulcer Indexi | 5.55% | 3.03% | |
| Max daily dropi | 1.90% | 1.06% | |
| Max wkly dropi | 4.31% | 1.88% | |
| 5Y | Growthi | -33.20% | -7.18% |
| CAGRi | -7.76% | -1.48% | |
| Volatilityi | 15.64% | 7.73% | |
| Sharpe ratioi | -0.73 | -0.74 | |
| Sortino ratioi | -0.99 | -1.02 | |
| Max drawdowni | 43.70% | 20.40% | |
| Current drawdowni | 37.07% | 8.77% | |
| Avg drawdowni | 31.44% | 11.00% | |
| Ulcer Indexi | 32.56% | 11.77% | |
| Max daily dropi | 3.42% | 1.78% | |
| Max wkly dropi | 6.42% | 3.96% | |
| 10Y | Growthi | -17.08% | +4.72% |
| CAGRi | -1.86% | +0.46% | |
| Volatilityi | 14.83% | 6.64% | |
| Sharpe ratioi | -0.36 | -0.57 | |
| Sortino ratioi | -0.50 | -0.80 | |
| Max drawdowni | 48.35% | 23.92% | |
| Current drawdowni | 42.27% | 12.81% | |
| Avg drawdowni | 21.71% | 8.95% | |
| Ulcer Indexi | 27.37% | 11.23% | |
| Max daily dropi | 6.67% | 2.51% | |
| Max wkly dropi | 7.78% | 3.96% |
| Category | TLT | IEF |
|---|---|---|
| Fund name | iShares 20+ Year Treasury Bond ETF | iShares 7-10 Year Treasury Bond ETF |
| Type | ETF | ETF |
| Expense ratioi | N/A | 0.15% |
| Total assets (AUM)i | N/A | $41.56B |
| Dividend yieldi | N/A | 4.14% |
- Maximum duration exposure among plain Treasury ETFs, providing the largest capital gain potential if long-term rates fall
- Strong negative correlation to equities during risk-off events makes TLT an effective portfolio hedge
- Highest yield among plain Treasury ETFs due to the term premium embedded in 20–30 year bonds
- Intermediate duration (7–8 years) provides significant yield advantage over cash and short-term bonds with less rate risk than TLT
- 7-10 year Treasuries historically provide strong risk-adjusted returns in the Treasury bond market
- Lower volatility than TLT while still providing meaningful negative equity correlation during risk-off periods
- Maximum duration means maximum losses when long-term rates rise — TLT declined over 50% from 2020–2023 as rates surged
- Long-term yields can remain elevated for years, creating extended holding periods with negative real returns net of inflation
- 30-year bond yields are sensitive to fiscal deficit concerns and U.S. credit rating actions, adding policy risk
- When inflation is rising and the Fed is hiking, IEF still experiences meaningful losses despite lower duration than TLT
- 10-year yields are the benchmark for mortgage rates and corporate bond pricing — IEF's price is driven by macro rate expectations
- Lower yield than TLT means less income in exchange for lower duration risk
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