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Further Reading from MarketBeat.com
3 Long-Duration Treasury ETFs to Watch if Rates FallBy Nathan Reiff. Article Published: 6/15/2026. 
Key Points
- Long-duration Treasury bond ETFs may offer contrarian upside if inflation eases and interest rates decline from elevated levels.
- TLT provides the most liquid and straightforward access to 20-plus-year Treasuries, with over $40 billion in assets and a 4.55% dividend yield.
- EDV offers a lower expense ratio of 0.05% and greater diversification than ZROZ, though it carries a slightly lower dividend yield of 4.97%.
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Long-duration U.S. Treasury bonds have faced a difficult stretch amid inflation, shifts in interest rates, and yields that have surged from pandemic-era lows. While the consensus view is that long bonds are risky, contrarian investors may argue that long-duration Treasury bond exchange-traded funds (ETFs) offer asymmetric upside if inflation fears fade and rates normalize. Oil prices may be an important factor, since spikes in crude can help keep inflation sticky. A reduction in geopolitical risk—say, through a ceasefire between the United States and Iran—could lower both inflation expectations and Treasury yields. Because even a modest decline in long-term yields can significantly affect the performance of long-duration bonds, investors anticipating that shift may want to act now. A Highly Liquid Option for Straightforward Long-Duration Treasury Access
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The iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) is a highly liquid long-duration bond trade that may appeal to investors looking to extend the duration of their portfolios. The fund has more than $40 billion in assets and a one-month average trading volume of just under 27 million shares. As the name suggests, TLT focuses on Treasury bonds with remaining maturities of more than 20 years. This extended duration makes the fund more sensitive to interest rate changes, which may keep long-duration bonds from playing a prominent role in broader bond funds. For that reason, a fund like TLT can be a useful way to gain exposure to this specific segment of the market. TLT's portfolio includes about 50 distinct Treasury bond positions, and the fund pays a dividend yield of 4.55%. If yields do decline, TLT could see meaningful upside while remaining less volatile than other duration-sensitive alternatives. In terms of liquidity, accessibility, and strategy simplicity, TLT may be a strong option for investors seeking broader Treasury exposure. A STRIPS Approach With High Interest Rate ImpactFor a slightly different approach, the PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (NYSEARCA: ZROZ) tracks an index of STRIPS—bonds with the interest payments removed and sold separately, leaving only the principal payment due at maturity. Specifically, ZROZ focuses on STRIPS tied to bonds with at least 25 years remaining until maturity. With an ultra-long-duration strategy like this, interest rate movements have an especially pronounced impact. When rates fall, the fund is likely to perform well, making ZROZ a good candidate for investors who expect rates to come down after an extended period of elevation. The unique approach ZROZ takes makes it significantly more niche than TLT, and the fund's asset base of just $1.3 billion and modest trading volume—a one-month average of just over half a million shares—reflect that. ZROZ is therefore not the most liquid long-duration bond fund, and investors seeking more active trading should keep that in mind. Still, its dividend yield of 5.08% is attractive, and ZROZ matches TLT's expense ratio of 0.15% exactly. An Alternative to ZROZ With Lower Fees and Higher Liquidity, But a Yield Trade-OffThe Vanguard Extended Duration Treasury ETF (NYSEARCA: EDV) takes a similar approach to ZROZ, focusing on long-duration STRIPS with maturities between 20 and 30 years. For investors seeking exposure to high-quality government credit, EDV may be a compelling choice. Like ZROZ, however, EDV also carries a higher level of interest rate risk than some other bond fund options. Investors who expect the Fed to hold rates steady or eventually cut them may reasonably also expect EDV to deliver attractive returns, given its yield advantage over shorter-term Treasury investments. One key difference between EDV and ZROZ is the former's major fee advantage: EDV's expense ratio of 0.05% is just one-third of its rival's. It also has a larger asset base of about $3.5 billion and more robust trading volume. With a broader portfolio of more than 80 positions, EDV is also more diversified than ZROZ. Where the fund falls slightly short of its competitor, however, is dividend yield. EDV's yield is slightly lower at 4.97%. Still, giving up a bit of yield in exchange for greater liquidity, a more diversified basket, and a substantially lower fee may make EDV the STRIPS fund of choice for many investors who are bullish on long-term Treasury prospects. |
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