Long Treasury (TLT) vs Russell 2000 (IWM)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
TLT and IWM have very different risk profiles: TLT is pure duration safety, IWM is high-beta equity risk. TLT outperforming IWM signals flight-to-quality and recession fears. IWM outperforming TLT signals risk-on and credit confidence. The ratio captures the broadest risk-on/risk-off expression in cross-asset form.
Cross-Asset Analysis
20Y+ Treasury (TLT) measures iShares 20+ Year Treasury Bond ETF, long-duration rates proxy, while Russell 2000 ETF (IWM) measures iShares Russell 2000 ETF, small-cap equity benchmark; tracking the two side by side turns that distinction into a tradable signal for the cross asset pair relationship. Analysts pair 20Y+ Treasury (TLT) with Russell 2000 ETF (IWM) to build cross-asset indicators that are tougher to game than any single-market series. Watching 20Y+ Treasury (TLT) alongside Russell 2000 ETF (IWM) offers insight into how macro factors flow across different parts of the global market structure.
Macro funds use the 20Y+ Treasury (TLT)-Russell 2000 ETF (IWM) spread to implement views cleaner than single-asset trades, isolating the exact macro factor they want to bet on. Regime dating based on 20Y+ Treasury (TLT)-Russell 2000 ETF (IWM) can be feedback-driven, because extreme spread values often clear via mean reversion or regime change. Structural shifts reshaping 20Y+ Treasury (TLT) or Russell 2000 ETF (IWM), including retail demand or regulatory changes, can durably reshape the relationship.
The connection between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) runs through shared macro drivers, and isolating the spread decomposes common factors from idiosyncratic noise. Policy-driven transitions trigger fast repricing into the 20Y+ Treasury (TLT)-Russell 2000 ETF (IWM) relationship because the two markets react to policy guidance on different timescales.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM)?+
20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) captures the specific macro signal that flows through this relationship.
When does 20Y+ Treasury (TLT) typically lead Russell 2000 ETF (IWM)?+
20Y+ Treasury (TLT) tends to lead Russell 2000 ETF (IWM) during macro regime changes, where the more liquid asset moves first. In those periods, moves in 20Y+ Treasury (TLT) precede corresponding moves in Russell 2000 ETF (IWM) by days to weeks, depending on the transmission channel and the depth of each market.
How are 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) historically correlated?+
Long-run correlation between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. 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 20Y+ Treasury (TLT)-Russell 2000 ETF (IWM) relationship.
What macro conditions drive divergence between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM)?+
Divergence between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. 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 20Y+ Treasury (TLT) or Russell 2000 ETF (IWM).
Is 20Y+ Treasury (TLT) a hedge for Russell 2000 ETF (IWM)?+
Cross-asset hedges between 20Y+ Treasury (TLT) and Russell 2000 ETF (IWM) work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the 20Y+ Treasury (TLT)-Russell 2000 ETF (IWM) 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.