TLT vs IEF (Long vs Intermediate Bonds)
TLT (iShares 20+ Year Treasury Bond ETF) closed near $87 in April 2026 with yield 4.49 percent and YTD daily total return +0.42 percent. IEF (iShares 7-10 Year Treasury Bond ETF) tracks intermediate Treasuries with shorter duration.
Also known as: 20Y+ Treasury ETF (long bonds, treasury ETF) · 7-10Y Treasury (IEF) (ETF_IEF)
Why This Comparison Matters
TLT (iShares 20+ Year Treasury Bond ETF) closed near $87 in April 2026 with yield 4.49 percent and YTD daily total return +0.42 percent. IEF (iShares 7-10 Year Treasury Bond ETF) tracks intermediate Treasuries with shorter duration. TLT has fallen 26 percent over 5 years from approximately $117 to $87 reflecting the rate normalization and elevated long-end term premium. The pair captures duration positioning on the Treasury curve: TLT has approximately 17-18 year duration; IEF has approximately 7.5 year duration. Each 100bps rate move produces approximately 17 percent TLT compression versus 7.5 percent IEF compression. The pair is the cleanest expression of long-vs-intermediate duration positioning available through ETFs.
The April 2026 Configuration
TLT at $87 in April 2026 with yield 4.49 percent (long-end Treasury yields elevated reflecting 30Y at 4.91 percent, 20Y similar). IEF tracking 7-10Y Treasury yields approximately 4.0-4.3 percent. TLT/IEF ratio approximately 0.92 (TLT $87 / IEF $94 estimate based on 7-10Y price).
Fed funds at 3.50-3.75 percent (down from 5.25-5.50 percent peak mid-2024); Fed paused after September-December 2024 cuts, then continued cutting through 2025; Fed has been on extended pause for approximately 4 months as of April 2026 with the impact of Iran war energy uncertainty being assessed.
The 10-year yield rose nearly 0.4 percent in a single month through late March 2026, illustrating how quickly rate moves can hit Treasury portfolios. The rate volatility has compressed both TLT and IEF but TLT compressed more due to higher duration.
Duration Mathematics
Bond duration mathematics drives the TLT-vs-IEF relationship. TLT effective duration approximately 17-18 years; IEF approximately 7.5 years. The 2.4x duration ratio means each basis-point change in yields produces 2.4x more price impact in TLT than IEF.
For a 100bp parallel curve shift up: TLT falls approximately 17 percent; IEF falls approximately 7.5 percent. Combined effect: 9.5 percentage point TLT-vs-IEF relative compression. For a 100bp parallel curve shift down: TLT rises approximately 17 percent; IEF rises 7.5 percent. Combined: 9.5 percentage point TLT-vs-IEF relative outperformance.
The duration ratio is the dominant driver of TLT-vs-IEF performance. Curve-shape changes (steepening, flattening) produce additional but smaller relative moves. The pair is essentially a leveraged bet on Treasury yield direction.
The 5-Year TLT Compression
TLT has fallen 26 percent over 5 years from approximately $117 to $87. The decline reflects the major rate normalization from 2020-2024 plus subsequent partial unwind during 2024-2026 cuts.
Decomposing the move: 2020 zero-rate period TLT peaked around $173. 2022-2023 hiking cycle drove TLT to $83 trough (October 2023). 2024 Fed cut anticipation supported TLT recovery to $98. 2025-2026 Fed cuts plus elevated term premium produced range-bound TLT around $85-95.
Conditional Forward Response (Tail Events)
How 7-10Y Treasury (IEF) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in 20Y+ Treasury ETF. Computed from 1,286 aligned daily observations ending .
Following these triggers, 7-10Y Treasury (IEF) falls 0.04% on average over the next 5 sessions, versus an unconditional baseline of -0.08%. 129 qualifying events; 7-10Y Treasury (IEF) closed positive in 48% of them.
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Frequently Asked Questions
What are current TLT and IEF levels?+
TLT (iShares 20+ Year Treasury Bond ETF) closed near $87 in April 2026 with yield 4.49% and YTD daily total return +0.42%. IEF (iShares 7-10 Year Treasury Bond ETF) tracks intermediate Treasuries yielding ~4.0-4.3%. TLT/IEF ratio ~0.92 (12-month range 0.88-0.96, 5-year range 0.85-1.20 with TLT relative peak in 2020 zero-rate era). TLT down 26% over 5 years from ~$117 to $87 reflecting rate normalization and elevated long-end term premium. TLT effective duration ~17-18 years; IEF ~7.5 years (2.4x duration ratio).
How does duration mathematics drive the pair?+
Bond duration mathematics drives TLT-vs-IEF. TLT effective duration ~17-18 years; IEF ~7.5 years. 2.4x duration ratio means each basis-point change in yields produces 2.4x more price impact in TLT than IEF. For 100bp parallel curve shift up: TLT -17%; IEF -7.5%. Combined: 9.5pp TLT-vs-IEF relative compression. For 100bp parallel curve shift down: TLT +17%; IEF +7.5%. Combined: 9.5pp TLT outperformance. Duration ratio is dominant driver of TLT-vs-IEF performance. Curve-shape changes (steepening, flattening) produce additional but smaller relative moves. Pair is essentially leveraged bet on Treasury yield direction.
Why has TLT compressed 26% over 5 years?+
Decline reflects major rate normalization from 2020-2024 plus subsequent partial unwind during 2024-2026 cuts. Decomposing: 2020 zero-rate TLT peaked ~$173. 2022-2023 hiking drove TLT to $83 trough October 2023. 2024 Fed cut anticipation supported TLT recovery to $98. 2025-2026 Fed cuts + elevated term premium produced range-bound TLT $85-95. IEF had similar but smaller drawdown reflecting shorter duration: IEF peak ~$122 in 2020 to current $94 = 23% decline. Relative TLT vs IEF underperformance reflects long-end term premium expansion central feature of post-2022 Treasury market.
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