Vanguard Long-Term Treasury ETF (VGLT) Covered Calls

The Vanguard Long-Term Treasury ETF provides investors with exposure to U.S. Treasury securities with maturities of 10 years or greater. The fund focuses on high-quality, government-backed debt to offer a combination of current income and capital preservation. Due to its focus on long-term bonds, the fund has a high duration and is sensitive to shifts in the federal funds rate, making it a common tool for investors seeking a safe-haven asset during periods of equity market volatility.

You can sell covered calls on Vanguard Long-Term Treasury ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for VGLT (prices last updated Fri 4:16 PM ET):

Vanguard Long-Term Treasury ETF (VGLT) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
57.18 +0.28 57.20 57.21 2.4M - 0.1
Covered Calls For Vanguard Long-Term Treasury ETF (VGLT)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 57 0.30 56.91 0.2% 9.1%
Mar 20 57 0.05 57.16 -0.3% -3.0%
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Vanguard Long-Term Treasury ETF is an exchange-traded fund that tracks the Bloomberg U.S. Long Treasury Index. Managed by Vanguard, the fund provides a low-cost way to access the long end of the U.S. government bond market. It is designed for investors who are looking for high credit quality and are willing to accept the higher price volatility associated with long-term interest rate movements.

Core Business and Products

  1. Long-Term Government Debt: The fund invests almost exclusively in U.S. Treasury bonds with maturities of 10 to 30 years. These assets are considered among the safest in the world from a credit perspective, as they are backed by the full faith and credit of the U.S. government.
  2. Duration Management: VGLT maintains a high weighted average maturity and duration. This characteristic makes the fund a powerful instrument for hedging against economic slowdowns or deflationary environments.
  3. Cost-Efficient Income: Following the Vanguard philosophy, the fund operates with a very low expense ratio, ensuring that a higher percentage of the interest income generated by the underlying Treasuries is passed through to the shareholders.

Competitive Landscape

VGLT competes in the highly liquid market for government bond ETFs, primarily against other major asset managers offering long-duration products. Its most direct competitor is the iShares 20+ Year Treasury Bond ETF, though VGLT includes slightly shorter maturities (starting at 10 years) compared to TLT's 20-year floor. Other relevant competitors in the treasury space include the SPDR Portfolio Long Term Treasury ETF and the iShares 7-10 Year Treasury Bond ETF for those seeking less duration risk. For broader fixed-income exposure, it is often compared to the Vanguard Total Bond Market ETF and the iShares iBoxx $ Investment Grade Corporate Bond ETF.

Strategic Outlook and Innovation

The fund’s outlook is inherently tied to the macroeconomic cycle and the Federal Reserve’s monetary policy stance. A primary strategic objective is providing a reliable "risk-off" vehicle for diversified portfolios, particularly as global investors navigate shifting inflation expectations and fiscal debt levels. Innovation in this space is less about the underlying assets—which are standardized government bonds—and more about the optimization of the fund’s indexing strategy to minimize tracking error and transaction costs during periods of high market volatility. As the yield curve evolves, the fund remains a critical benchmark for long-term real interest rates. By maintaining significant scale and liquidity, VGLT continues to serve as an essential building block for institutional asset allocation and retail retirement planning, offering a hedge against equity market drawdowns and a predictable source of monthly income.