1-Star ETFs Poised to Plunge: iShares Barclays 20+ Year Treasury Bond Fund?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the iShares Barclays 20+ Year Treasury Bond Fund (NYSE: TLT) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at TLT and see what CAPS investors are saying about the ETF right now.

iShares Barclays 20+ Year Treasury Bond Fund facts

   

Inception

July 2002

Total Net Assets

$2.9 billion

Investment Approach

Seeks investment results that correspond generally to the Barclays U.S. 20+ Year Treasury Bond Index. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of 20 or more years.

Expense Ratio

0.15%

1-Year/3-Year/5-Year Returns

2.2%/11.9%/8%

Alternatives

SPDR Barclays Capital Long Term Treasury (NYSE: TLO)

Vanguard Extended Duration Treasury Index ETF (NYSE: EDV)

iShares Core US Total Bond Market ETF (NYSE: AGG)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 77% of the 526 members who have rated TLT believe the ETF will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star TerryHogan, succinctly summed up the TLT bear case for our community:

I think the run of outperformance of bonds is over, I think it actually ended last year sometime. Unless we see sustained negative interest rates (which I think is rather unlikely) bonds should be underperformers for a while, particularly when interest rates start rising (although we could be waiting a while for that). [A]dd in a little expense ratio, and a rising S&P, and you have a nice little red thumb.

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