On Wednesday, BlackRock expanded its roster of retirement-focused funds with the launch of the iShares LifePath Target Date 2070 ETF (ITDJ).
ITDJ functions with a net expense ratio of 12 basis points. The fund offers a long-term plan to help investors cultivate and maintain their savings heading into retirement.
Path to Profit
Much like BlackRock’s other LifePath ETFs, ITDJ applies an evolving fund strategy to best prepare its investors for retirement. In particular, this fund’s portfolio is designed for investors who are either going to retire or begin withdrawing assets in 2070.
At first, the fund will hold an overwhelmingly large share of equities in comparison to fixed income assets. This is intentionally done to help investors make sure they build enough savings for retirement.
As such, ITDJ will begin its investment life by focusing on an equity growth strategy. This portfolio includes a wide number of iShares ETFs and BlackRock cash funds, and can also have REIT exposure.
Across ITDJ’s life span, the fund follows a “glide path” that progressively de-risks as the fund approaches the year 2070. Around the midpoint, the ETF will seek to lower exposure to market volatility.
When this happens, ITDJ will begin to pivot to more conservative investments. This can help it protect its assets while continuing to build toward retirement. These conservative investments include an increased exposure to fixed income.
As the fund’s glide path progresses, ITDJ will increasingly tilt towardsfixed income exposure in lieu of equities. By the time the fund hits 2070, its portfolio is expected to weigh 60/40 in favor of fixed income.
This makes sense for a number of reasons. Along with managing a secure risk profile, this fixed income exposure can generate income for investors to cover retirement expenses.
ITDJ comes online following a slew of other iShares LifePath ETFs that offer compelling results. For example, the iShares LifePath Target Date 2060 ETF USD (ITDH ) has seen its total return jump more than 32% over the last 12 months, as of October 31, 2024.
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