While target-date mutual funds and collective investment trusts hold roughly US$2.8 trillion globally, BlackRock’s new funds are the only such strategy available in the ETF wrapper. — Reuters
NEW YORK: BlackRock Inc is taking another shot at a strategy long-dominated by mutual funds, target-date investing, but with an exchange-traded fund (ETF)-twist.
Last week, the world’s largest ETF issuer unveiled a suite of 10 funds that shift money into more conservative investments as holders age. The new line-up will target retirement dates every five years from 2025 through 2065.
While target-date mutual funds and collective investment trusts hold roughly US$2.8 trillion globally, BlackRock’s new funds are the only such strategy available in the ETF wrapper.
The new ETFs set sail roughly a decade after the asset management-titan shuttered its passively-managed target-date ETFs in 2014.
Steep competition from mutual fund products tamped down other rivals, DWS Group also closed its lineup of target-date ETFs in 2015, and has yet to revamp the effort.
With ETFs now a US$7 trillion space and the mutual fund industry bleeding cash, BlackRock is ready to try again.
“Since 2014 you’ve seen a major advancement in the usage of ETFs, particularly in the individual market environment,” said Nick Nefouse, head of retirement solutions at BlackRock, on Bloomberg Television’s ETF IQ. — Bloomberg
