Investors who purchased the iShares 20+ Year Treasury Bond ETF (TLT) at the height of the market in 2020 have experienced significant capital depreciation. Data indicates that a $100,000 position initiated at that peak is currently down more than 40% in total value. This calculation accounts for the reinvestment or collection of monthly interest payments distributed by the fund.

The performance of TLT is heavily influenced by the Federal Reserve's interest rate policy. When interest rates rise, the market value of existing long-term bonds typically falls, as newer bonds are issued with higher yields, making older, lower-yielding bonds less attractive to investors. The period following 2020 saw a shift from a low-interest-rate environment to a cycle of aggressive rate hikes intended to combat inflation, which directly impacted the net asset value of long-term Treasury holdings.

While the fund provides regular income through monthly distributions, these payments have been insufficient to offset the substantial decline in the underlying share price of the ETF. The situation highlights the interest rate risk inherent in long-term fixed-income investments, particularly when purchased during periods of historically low yields.