TIPS vs Nominal Treasuries
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
When TIP outperforms TLT, breakeven inflation is rising and the market expects more inflation ahead. When TLT outperforms TIP, real rates are rising and inflation expectations are falling. This comparison provides a clean, tradeable way to express a view on the direction of inflation.
Cross-Asset Analysis
To orient the reader: TIPS (TIP) represents iShares TIPS Bond ETF, inflation-protected Treasuries and 20Y+ Treasury (TLT) represents iShares 20+ Year Treasury Bond ETF, long-duration rates proxy, which is why this comparison sits in the peer pair category on Convex. Index construction choices inside TIPS (TIP) and 20Y+ Treasury (TLT), including weighting methodology and inclusion rules, create persistent tilts that show up in the spread. Idiosyncratic events in a concentrated peer, such as a single mega-cap earnings miss inside TIPS (TIP), can move the TIPS (TIP)-20Y+ Treasury (TLT) spread without broader factor signal.
Corporate action events, including buybacks or spin-offs affecting constituents of TIPS (TIP) or 20Y+ Treasury (TLT), can distort the spread relative to its intended factor tilt. The TIPS (TIP)-20Y+ Treasury (TLT) spread captures the tilt between two variants of the same asset: one may be more defensive, one more cyclical. A peer comparison like TIPS (TIP) compared to 20Y+ Treasury (TLT) strips out the common-factor beta and leaves behind the differences in sector mix, capitalization, style, or geography.
Sector, style, and geographic dominance cycles each produce multi-year relative performance episodes between TIPS (TIP) and 20Y+ Treasury (TLT). Interest rate cycles drive TIPS (TIP) versus 20Y+ Treasury (TLT) relative performance through discount-rate sensitivity, with longer-duration exposures suffering more when rates rise.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between TIPS (TIP) and 20Y+ Treasury (TLT)?+
TIPS (TIP) and 20Y+ Treasury (TLT) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between TIPS (TIP) and 20Y+ Treasury (TLT) captures the specific macro signal that flows through this relationship.
When does TIPS (TIP) typically lead 20Y+ Treasury (TLT)?+
TIPS (TIP) tends to lead 20Y+ Treasury (TLT) during rotation episodes between the two factor exposures. In those periods, moves in TIPS (TIP) precede corresponding moves in 20Y+ Treasury (TLT) by days to weeks, depending on the transmission channel and the depth of each market.
How are TIPS (TIP) and 20Y+ Treasury (TLT) historically correlated?+
Long-run correlation between TIPS (TIP) and 20Y+ Treasury (TLT) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the TIPS (TIP)-20Y+ Treasury (TLT) relationship.
What macro conditions drive divergence between TIPS (TIP) and 20Y+ Treasury (TLT)?+
Divergence between TIPS (TIP) and 20Y+ Treasury (TLT) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in TIPS (TIP) or 20Y+ Treasury (TLT).
Is TIPS (TIP) a hedge for 20Y+ Treasury (TLT)?+
Peers like TIPS (TIP) and 20Y+ Treasury (TLT) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the TIPS (TIP)-20Y+ Treasury (TLT) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.