TLT: Popular Treasury Bond ETF Inflows Are Rising as 30-Year Yield Soars

The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) has continued its freefall, dropping from a record high of $146.60 in 2020 to a low of $77.48, its lowest level since November 2023, as concerns in the bond market persist.

TLT ETF is Seeing Inflows Despite Treasury Yield Woes

The TLT ETF, which tracks the ICE US Treasury 20+ Year Bond Index, which includes US Treasury bonds with remaining maturities greater than 20 years. It offers a way for investors to gain exposure to long-duration government debt. 

These bonds have been in a steep decline this year, pushing their yields to the highest levels in years. The 20-year Treasury yield jumped to 5.68%, its highest level in more than two decades. Similarly, the 30-year yield rose to 5.62%, its highest point since May 2002 and far above the pandemic low of 0.725%.

US bond yields have soared because of the rising public debt, which crossed the $40.2 trillion milestone. At the same time, economic growth has slowed as evidenced by last Friday’s nonfarm payrolls (NFP) report, which showed that the economy added just 29k jobs last month as the unemployment rate rose to 4.2%. 

Despite these challenges, investors have continued to pile into the TLT ETF. ETF Db data shows that the fund has had over $2.26 billion of inflows in the last 30 days and over $8.85 billion in the last six months. These inflows have brought its assets under management to over $46 billion.

Looking forward, the ETF will likely react to energy prices, which may rise as the US-Iran and Saudi Arabia and Houthis escalation continues. Higher energy prices mean that inflation will be elevated for longer, pushing the Fed to hike interest rates. The fund will also react to the upcoming Federal Reserve minutes.

TLT ETF Has Formed an Inverted Cup and Handle Pattern

The weekly chart shows that the TLT ETF has formed an inverted cup-and-handle pattern, a common continuation sign. It has already moved below the lower side of the cup at $78.48. 

The fund has slumped below the 50-week Exponential Moving Average (EMA), while the Average Directional Index (ADX) soared to 25, its highest level since 2023, a sign that the momentum is continuing. Therefore, the fund may continue falling, potentially to $72.70, its lowest level in October 2023.

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