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Treasury ETF (TLT) Hits New 52-Week High

Sweta Killa

For investors seeking momentum, iShares 20+ Year Treasury Bond ETF TLT is probably on the radar now. The fund just hit a 52-week high and is up 26.6% from its 52-week low price of $118.64/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

TLT in Focus    

TLT offers exposure to long-term U.S. Treasury bonds and holds 38 bonds in its basket. It has a weighted average maturity of 25.32 years and effective duration of 18.27 years. The product charges 15 basis points in expense ratio and has 1.85% in 30-day SEC yield (see: all the Government Bond ETFs here).

Why the Move?

The Treasury corner of the fixed-income world has been an area to watch lately as investors are flocking to safe havens amid the accelerating fears of coronavirus that would derail the global economic growth. The number of confirmed cases has increased outside China with an unexpected surge in infections in South Korea, Italy and Iran over the last weekend. According to the latest figures from the World Health Organization, there are now 79,407 cases of coronavirus in 32 countries and 2,622 related deaths.

More Gains Ahead?

Currently, TLT has a Zacks ETF Rank #3 (Hold) with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, a weighted alpha of 25.80 and a low 20-day volatility of 12.77% for the ETF show that there is still some promise for risk-aggressive investors who want to ride on this surging ETF.

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