Blackrock Lifepath Index 2060 Fund: A Smart Investment Move?

The BlackRock LifePath Index 2060 Fund is an open-end mutual fund that seeks to provide for retirement outcomes based on quantitatively measured risk. The fund invests in a diversified mix of cost-effective, indexed building blocks, including equity and bond index funds and money market funds. It is designed for investors expecting to retire or begin withdrawing assets around the year 2060, with asset allocations becoming more conservative over time. While the fund has a Morningstar Medalist Rating, it is important to carefully consider the fees, risks, and expenses associated with any investment before making a decision.

The fund's investment objective

The investment objective of the BlackRock LifePath Index 2060 Fund is to provide for retirement outcomes based on quantitatively measured risk. The fund will be broadly diversified across global asset classes, with allocations becoming more conservative over time. The fund is designed for investors expecting to retire or begin withdrawing assets around the year 2060.

The fund seeks to achieve its objective by allocating and reallocating its assets among a combination of equity and bond index funds and money market funds, known as the Underlying Funds, in proportions based on its comprehensive investment strategy. The fund employs a multi-dimensional approach to assess risk and determine its allocation across asset classes, using proprietary risk measurement tools to analyse historical and forward-looking securities market data, including risk, asset class correlations, and expected returns.

Under normal circumstances, the BlackRock LifePath Index 2060 Fund will invest at least 80% of its assets in securities or other financial instruments that are components of, or have economic characteristics similar to, its custom benchmark index. The fund employs a "passive" management approach, attempting to invest in a portfolio of assets whose performance is expected to match approximately the performance of its custom benchmark index.

The asset allocation will change over time according to a predetermined "glide path" as the fund approaches its target date. This reflects the need for reduced investment risks as retirement approaches and the need for lower volatility, which may be a primary source of income after retirement. The fund is part of a group of funds referred to as the LifePath Index Funds, each of which has a similar investment objective.

The BlackRock LifePath Index 2060 Fund is an open-end mutual fund that invests in a diversified mix of cost-effective, indexed building blocks. It is built using 25+ years of target-date fund experience and is designed to take the appropriate level of risk.

Asset allocation

The BlackRock LifePath Index 2060 Fund is designed to take an appropriate level of risk by investing in a diversified mix of cost-effective, indexed building blocks. The fund seeks to provide cost-effective, efficient implementation by investing in index-based building blocks, offering transparent and low-cost access to the LifePath glidepath and asset allocation. The fund's investment approach is to invest in a global mix of broad, diversified asset classes.

The asset allocation of the fund is designed to gradually de-risk along the glidepath, becoming more conservative as investors approach retirement. On July 9, 2024, BlackRock announced asset allocation changes to its BlackRock LifePath Index series following the release of new research. The new findings stress the importance of inflation protection.

The fund's current portfolio holdings as of September 30, 2024, include:

• Blackrock Russell 1000 Index Fund
• IShares Core MSCI Total Intl Stk ETF
• IShares Developed Real Estate Idx K
• Blackrock Small Cap Index Fund
• IShares US Long Credit Bond Index
• BlackRock Cash Funds Treasury SL Agency
• IShares TIPS Bond ETF
• USD CASH(Alpha Committed)
• Cash and Equivalents

Investment risks

Investing in the BlackRock LifePath Index 2060 Fund carries several risks that potential investors should be aware of. Here are some key investment risks to consider:

• Market Risk: The fund invests in a mix of asset classes, including stocks and bonds, which are subject to market fluctuations. This means that the value of the investment can go down depending on market conditions.
• International Investing Risk: The fund's global investment portfolio includes international and emerging market investments, which carry additional risks such as currency fluctuations, illiquidity, and heightened volatility.
• Fixed Income Risk: The fund may be exposed to interest rate risk and credit risk associated with fixed-income investments. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that a bond issuer may default on payments.
• Asset Allocation Risk: The fund employs an asset allocation strategy, which does not guarantee profit and does not protect against losses. The investment strategy may not perform as expected, and the principal value is not guaranteed, including at the target date.
• Derivatives Risk: The fund may use derivatives for hedging or enhancing returns. However, derivatives carry risks related to liquidity, leverage, and credit, which can reduce returns and increase volatility.
• Inflation Risk: While the fund managers have a long history of target date fund experience, their reactionary approach to inflation protection could be a potential risk.
• Volatility Risk: According to Morningstar, the fund's risk is above average compared to other funds in the same category. This indicates a higher level of uncertainty or risk of change in the fund's value.

Performance

The BlackRock LifePath Index 2060 Fund is designed for investors expecting to retire or to begin withdrawing assets around the year 2060. The fund has a Morningstar Medalist Rating of Gold, its highest level of conviction. As of 17 October 2024, the fund's NAV total return YTD was 17.97%. The fund's 52-week range is 15.70 - 18.46, and its 52-week average return is 11.15%.

The fund's performance is dependent on the performance of the underlying funds in which it invests. The fund's asset allocation will change over time according to a predetermined glide path as it approaches its target date. This glide path reflects the need for reduced investment risks and lower volatility as retirement approaches. The fund's investment team meets regularly to assess market conditions, review asset allocation targets, and make any necessary changes to achieve its investment objective.

The fund's performance may be affected by various risks, including equity securities risk, investments in underlying funds risk, allocation risk, retirement income risk, affiliated fund risk, market risk, selection risk, volatility risk, and high portfolio turnover risk, among others.

How to buy

• Discuss with your financial planner: If you are considering investing in the BlackRock LifePath Index 2060 Fund, the first step is to consult with your financial planner or advisor. Share the fund details with them to understand how it fits into your portfolio and overall investment strategy.
• Buy through your brokerage: BlackRock funds, including the LifePath Index 2060 Fund, can be purchased through certain brokerage accounts. Contact your brokerage firm to learn about the specific process and requirements for buying this fund.
• Carefully consider the fund's objectives, risks, and charges: Before investing, it is crucial to review the fund's prospectus, which outlines its investment objectives, risk factors, charges, and expenses. Understand the potential risks associated with investing in the fund, such as stock and bond value fluctuations, international investing risks, and the use of derivatives. Make sure you carefully read and understand the prospectus before making any investment decisions.
• Review performance and historical data: Evaluate the fund's past performance and historical data to make an informed decision. You can find information about the fund's net asset value (NAV), total return, and YTD performance on the BlackRock website. However, keep in mind that past performance does not guarantee future results.
• Understand the fund's investment approach and strategy: The BlackRock LifePath Index 2060 Fund is designed to take an appropriate level of risk and is invested in a diversified mix of cost-effective, indexed building blocks. The fund's allocations gradually de-risk along the glidepath, becoming more conservative as investors approach retirement. Consider how this strategy aligns with your investment goals and risk tolerance.
• Complete the purchase: Once you have completed the necessary research and due diligence, you can proceed with purchasing the BlackRock LifePath Index 2060 Fund through your chosen brokerage account or financial institution. Remember to carefully review the fund's prospectus and consider seeking independent financial advice before making any investment decisions.

Frequently asked questions