iShares Core Conservative Allocation ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in the Europe-Developed region and developed markets regions compared with category peers. 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

iShares Core Total USD Bond Market ETF

iShares Core S&P 500 ETF

iShares Core International Aggregate Bond ETF

iShares Core MSCI International Developed Markets ETF

iShares Core MSCI Emerging Markets ETF

iShares Core S&P Mid-Cap ETF

iShares Core S&P Small Cap ETF

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. iShares Core Conservative Allocation ETF earns an Average Process Pillar rating.  The predominant contributor to the rating is the firm's five-year retention rate of 92% over the period. This fund tracks an index, which also increases its process rating. Historical data, such as Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Lastly, the process is limited by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 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 Conservative Index composed of a portfolio of underlying equity and fixed income funds intended to represent a conservative 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 its underlying index. The index measures the performance of the S&P Dow Jones Indices LLC proprietary allocation model.  

 The portfolio has allocations in its top two sectors, consumer cyclical and financial services, that are similar to the category. The sectors with low exposure compared to category peers are real estate and healthcare, with real estate underweighting the average portfolio by 2.9 percentage points  and healthcare similar to the average. The portfolio is overweight in Developed Europe and Japan regions relative to the category average by 5.4 percentage points and 3.8 percentage points, respectively. The regions with low exposure compared to their category peers are North America and Emerging Europe, with North America underweight the average by 17.9 percentage points and Emerging Europe similar to the average.

 The fund’s fixed-income allocation takes on less interest rate risk as the fund’s average duration is 4.1 years, to the category average’s 5.0 years.

Average

Process

iShares Core Conservative Allocation ETF benefits considerably from its allocation team, earning it 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 solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position 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 Conservative Allocation ETF

AOK tracks a proprietary index that provides significant exposure to fixed income securities and a small portion to equities with a goal of seeking current income while preserving capital.

The iShares Core Conservative Allocation ETF (AOK) is a stock-and-bond fund with a large allocation to bonds and a smaller allocation to equity funds. AOK outperformed the S&P 500 in terms of efficient returns through 2021, but things have taken a turn for the worse. AOK struggled in 2022 due to high inflation and rising interest rates, but there are signs that it may recover.

AOK: Worst May Be Behind

The iShares Core Conservative Allocation ETF is a 70% fixed income, 30% equities fund that seeks to track the performance of a conservative stock-bond allocation strategy. The fund's composition includes fixed income ETFs such as the iShares Core Total USD Bond Market ETF and the iShares Core International Aggregate Bond ETF. Buying fixed income at the current macroeconomic juncture is seen as a viable option, with rate cuts priced in for 2024 and the potential for positive price performance.

AOK: A Retired Investor's 401k Aggregator

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AOK is another one of these ETFs that make you pay for no value-add, where its performance is mostly dictated by a combination of two lower maintenance ETFs. While AOK would benefit from peak rates, which we think is definitely coming soon, buying IUSB and IVV in the proportions that AOK owns them is cheaper.

AOK: Just Buy IVV And IUSB Instead

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ETFs to Win/Lose if U.S. Defaults on Debt

AOK is iShares benchmark ETF to track a "Conservative" asset allocation. As a traditional stock/bond allocation, AOK satisfies the definition of conservative. But I argue that the definition needs to change.

AOK: There's Plenty That Is Not OK With This Allegedly Conservative ETF

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AOK is supposed to be a conservative allocation fund, and traditionally bond investments are conservative. But fixed income is still risky, and when the economic regime is rate hikes, they are actually rather risky.

AOK Isn't That Conservative Considering Duration Risk

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The best funds for conservative investors limit the downside relative to more growth-oriented investments. Here are seven for your watchlist.

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The markets panicked on May 5. A sharp, simultaneous pullback in stocks and bonds has rarely happened in the past few decades. History suggests that the iShares Core Conservative Allocation ETF could be facing a period of outperformance in the next 12 months.

iShares Core Conservative: Buy This Dip And The Next

With yields pulling back from a five-month peak, I look for alternatives to an intermediate-term treasury ETF. AOK is a fund of funds that invests in stocks and bonds, both issued in the US and abroad.

AOK: Income With A Boost

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The affected funds include the firm's lineup of asset allocation ETFs.

iShares Slashes Fees On 8 ETFs

Some investors like the convenience of one investment providing both equity and fixed income exposure. iShares provides four with different equity/fixed income allocations. Here I will explain how these Fund-of-Funds function, show the current allocations, and provide performance data since inception for both AOA and AOK, the Aggressive and Conservative ETFs.

iShares Provides 4 Core Allocation ETFs: The Most Aggressive And Conservative Are Compared Here

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News for iShares Core Conservative Allocation ETF ETF (AOK)