TIP vs. TLT
Compare and contrast key facts about iShares TIPS Bond ETF (TIP) and iShares 20+ Year Treasury Bond ETF (TLT).
TIP and TLT are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. TIP is a passively managed fund by iShares that tracks the performance of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L). It was launched on Dec 4, 2003. TLT is a passively managed fund by iShares that tracks the performance of the Barclays Capital U.S. 20+ Year Treasury Bond Index. It was launched on Jul 26, 2002. Both TIP and TLT are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: TIP or TLT.
Key characteristics
| TIP | TLT | |
|---|---|---|
| YTD Return | -1.53% | -9.89% |
| 1Y Return | -1.25% | -12.66% |
| 3Y Return (Ann) | -1.62% | -11.71% |
| 5Y Return (Ann) | 1.90% | -4.40% |
| 10Y Return (Ann) | 1.80% | 0.17% |
| Sharpe Ratio | -0.26 | -0.79 |
| Daily Std Dev | 5.99% | 17.16% |
| Max Drawdown | -14.56% | -48.35% |
| Current Drawdown | -10.78% | -43.85% |
Correlation
The correlation between TIP and TLT is 0.73, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.
Performance
TIP vs. TLT - Performance Comparison
In the year-to-date period, TIP achieves a -1.53% return, which is significantly higher than TLT's -9.89% return. Over the past 10 years, TIP has outperformed TLT with an annualized return of 1.80%, while TLT has yielded a comparatively lower 0.17% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
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TIP vs. TLT - Expense Ratio Comparison
TIP has a 0.19% expense ratio, which is higher than TLT's 0.15% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Risk-Adjusted Performance
TIP vs. TLT - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares TIPS Bond ETF (TIP) and iShares 20+ Year Treasury Bond ETF (TLT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Dividends
TIP vs. TLT - Dividend Comparison
TIP's dividend yield for the trailing twelve months is around 2.72%, less than TLT's 3.93% yield.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
TIP iShares TIPS Bond ETF | 2.72% | 2.73% | 6.96% | 4.28% | 1.17% | 1.75% | 2.71% | 2.07% | 1.48% | 0.34% | 1.67% | 1.15% |
TLT iShares 20+ Year Treasury Bond ETF | 3.93% | 3.38% | 2.67% | 1.50% | 1.50% | 2.27% | 2.63% | 2.43% | 2.60% | 2.61% | 2.67% | 3.26% |
Drawdowns
TIP vs. TLT - Drawdown Comparison
The maximum TIP drawdown since its inception was -14.56%, smaller than the maximum TLT drawdown of -48.35%. Use the drawdown chart below to compare losses from any high point for TIP and TLT. For additional features, visit the drawdowns tool.
Volatility
TIP vs. TLT - Volatility Comparison
The current volatility for iShares TIPS Bond ETF (TIP) is 1.58%, while iShares 20+ Year Treasury Bond ETF (TLT) has a volatility of 4.12%. This indicates that TIP experiences smaller price fluctuations and is considered to be less risky than TLT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.