The iShares 20+ Year T-Bond Buywrite Strategy ETF (TLTW) is a $1.5 billion fund that sells covered call options on long-term Treasury bonds, providing income on top of a 4% payout. As the bond market normalizes, TLTW may offer both price appreciation and yield. Technical indicators suggest a bullish pattern.

The Federal Reserve’s interest rate actions indirectly affect long-term bonds like TLT. A yield drop has begun, driving TLTW’s return of over 10% annually. TLTW’s chart shows growth potential but also price risks from rising long-term bond rates. Using a hedge like TBT or TBF can mitigate these risks while maintaining income.

Investors can pair TLTW with inverse ETFs like TBT or TBF to offset price risks from rising long-term bond rates. These trading vehicles move opposite to TLT, providing a cushion against price declines. Careful management is required due to the daily resetting nature of inverse ETFs. This strategy allows for a high yield with reduced price risk.

Read more at Barchart: In a Golden Era of Covered Call ETFs, Don’t Miss This 1 Overlooked Fund