BlackRock recently launched the industry's first suite of 10 target-date ETFs that hold a mix of stock and bond funds and automatically adjust asset allocation over time. The world's largest asset manager had previously offered target-date ETFs but shuttered them in 2014 due to a lack of investor interest.
Target-date funds, earlier offered only as collective investment trusts or mutual funds, are designed for specific retirement dates and are very popular in 401(k) plans. These funds are meant for 'set it and forget it' investors as the exposure shifts from riskier to more conservative over 'glide paths' as the target retirement year approaches.
However, according to BlackRock, about 57 million Americans do not have access to a 401(k) or company-sponsored retirement plan. Target-date ETFs are suitable for taxable accounts rather than tax-advantaged workplace retirement plans, due to the tax efficiency of the ETF structure.
BlackRock's new suite targets retirement dates every five years from 2025 through 2065. These ETFs follow an 'ETF of ETFs' structure and charge expense ratios ranging from 0.08% to 0.11%.
The iShares LifePath Target Date 2025 ETF ITDA, designed for investors expecting to retire around the year 2025, has about a 57% allocation to bonds and 43% to equities.
The iShares LifePath Target Date 2065 ETF ITDI, suitable for much younger investors, has almost 99% of its assets invested in equities.
The iShares Russell 1000 ETF IWB, the iShares U.S. Treasury Bond ETF GOVT and the iShares Core MSCI Emerging Markets ETF IEMG are among the top holdings in these ETFs.
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Get it free >>iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports
iShares U.S. Treasury Bond ETF (GOVT): ETF Research Reports
iShares Russell 1000 ETF (IWB): ETF Research Reports
iShares LifePath Target Date 2025 ETF (ITDA): ETF Research Reports
iShares LifePath Target Date 2065 ETF (ITDI): ETF Research Reports
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