Boston, MA, 07/16/2013 (nysepost) - In the past two months, iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT) has been getting hurt by declining around 14% because the long yield curve is more vulnerable to rising rates. The rates are now set to rise by 4% according to Goldman. As a result of this, there are plenty of losses anticipated for TLT. However, the short end of the curve will be lying safer. In order to reduce the bond risk, one can take a look at Shares Barclays 3-7 Year Treasury Bond that has shown a fall of only 3%.
The public owns around $ 1 trillion in the form of long-term Treasury bonds while most of the US debt is shorter term according to the US Department of the Treasury. The percentage change in the value of the long-term bond holdings which exist in bond funds or ETF and individual bonds can be calculated using the iShares Barclays 20+ Yr Treasury Bond ETF +0.53%. Right from the beginning of the year, the year to date TLT is down by 12%. This has translated into a value of $ 120 billion decline in the wealth for the bond investors.
The major concern is that TLT has experienced a 13% fall since May 1st because of which the wealth reduction that were faced by the Treasury bond investors has actually occurred within the past 2 months. Bond-fund investors are facing a disconcerting situation while bonds are fast rarely. This defines the “Great Rotation”.
During the last trading session, the stocks of iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT) reached the highest price of $ 107.50 after being opened at the price of $ 107.29. The stocks closed at the price of $ 106.26 and found to have reported a loss of -3.41%. The company’s stock was oscillating between $ 106.18 and $ 107.50 for the day. During the session, the total trading volume was held as 4.21 million and the total market capitalization remained as $ 2.88 billion.