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The initial launch under the iShares LifePath Target Date ETF Suite includes 10 ETFs with target dates ranging from 2025 to 2065. Each share is priced at $25, making it accessible to investors as they require just $25 in a brokerage account to start. The ETFs are designed to serve as an investment avenue for retirees and those transitioning their 401(k)s, including self-employed workers.
Investors can select a fund that matches their projected retirement date. As the date nears, the fund transitions into the iShares Target Retirement ETF. These funds offer exposure to a diverse mix of assets, including stocks, bonds, and inflation-protected assets. The asset allocation becomes more conservative as the investor approaches retirement.
Dominik Rohe, BlackRock’s Head of Americas ETF and Index Investments, highlighted the firm’s commitment to this initiative. “These funds could serve self-employed individuals or those wanting to roll their 401(K) assets into an IRA,” said Rohe.
The new ETFs invest in a broad range of underlying iShares exchange-traded funds, offering global stock exposure with a focus on U.S equities and exposure to U.S fixed income, Treasury-inflation protected securities, real estate, and infrastructure. Amidst market fluctuations with DJIA, S&P 500 SPX, and Nasdaq Composite COMP trading lower and long-term Treasury yields like the 10-year Treasury BX:TMUBMUSD10Y rising due to Federal Reserve’s efforts to control inflation spike, these ETFs provide potential investment options for everyday investors seeking retirement savings.
Nick Nefouse, BlackRock’s Global Head of Retirement Solutions, emphasized the importance of access and education in the direct investor world. Anne Ackerley, Head of Retirement at BlackRock, also expressed her belief that this innovation enhances retirement saving accessibility amidst declining American confidence.
This launch is particularly noteworthy in states like Florida, where ADP reports 22% gig workers, a demographic that often lacks access to traditional employer-sponsored retirement plans. With fees ranging from 0.09% to 0.11%, these funds aim to be accessible for many Americans, especially the estimated 57 million without employer-sponsored retirement plans.
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