A sound investment process and strong management team underpin iShares Core Aggressive Allocation ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in the real estate sector and an overweight in the Africa and Middle East region compared with category peers. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

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Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. iShares Core Aggressive Allocation ETF earns a High Process Pillar rating.  The primary contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Impressive risk-adjusted performance also supports the process. This can be seen in the fund's five-year alpha calculated relative to the category average, which suggests that the process was successful over that period. The firm's five-year retention rate of 92% contributes to the process as well.

 The investment strategy as stated in the fund's prospectus is as follows: 

 The investment seeks to track the investment results of the S&P Target Risk Aggressive Index composed of a portfolio of underlying equity and fixed income funds intended to represent an aggressive target risk allocation strategy.  The fund is a fund of funds and seeks its investment objective by investing primarily in underlying funds that themselves seek investment results corresponding to their own respective underlying indexes. It generally will invest at least 80% of its assets in the component securities of the underlying index. The index measures the performance of the S&P Dow Jones Indices LLC proprietary allocation model.  

 The portfolio is overweight in technology by 6.3 percentage points  compared with the category average, and its financial services allocation is similar to the category. The sectors with low exposure compared to category peers are real estate and energy, underweight the average by 5.9 and 3.2 percentage points , respectively. The portfolio is overweight in North America by 4.0 percentage points compared with the category average, and Emerging Asia's allocation is similar to its peers. The regions with low exposure compared to their category peers are Developed Europe and United Kingdom, with Developed Europe underweight the average by 2.8 percentage points and United Kingdom similar to the average.

 The fund’s fixed-income allocation takes on less interest rate risk as the fund’s average duration is 1.1 years, to the category average’s 4.4 years.

High

Process

iShares’s allocation team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. Experience on the team is abundant, with 18 years of average portfolio management experience. Together, they manage a total of 257 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Above Average

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Core Aggressive Allocation ETF

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