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

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in the Europe-Developed region and an underweight in developed markets regions 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

iShares Core Total USD Bond Market ETF

iShares Core S&P 500 ETF

iShares Core MSCI International Developed Markets ETF

iShares Core International Aggregate Bond 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 aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. iShares Core Moderate Allocation ETF earns a High Process Pillar rating.  The leading factor in 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. Noteworthy risk-adjusted performance also strengthens the process. This can be seen in the fund's 10-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% strengthens 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 Moderate Index composed of a portfolio of underlying equity and fixed income funds intended to represent a moderate 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 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 bond sleeve maintains less interest rate risk as the fund’s average duration is 3.5 years, to the category average’s 5.0 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. The team is well equipped, with an average of 18 years of 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 Moderate Allocation ETF

AOM tracks a proprietary index that provides exposure to fixed income securities, with a smaller exposure to equities in order to seek current income, some capital preservation, and modest capital appreciation.

iShares Core Moderate Allocation ETF is a fund of funds with a 40/60 allocation model in global equity and bond indexes. Its exposure to foreign securities is about 25%, which implies some currency risk. In a comparison with a few multi-asset tactical ETFs, the best performer is an actively managed fund holding U.S. stocks and bond futures.

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AOM is a diversified, multi-asset class index ETF that offers investors few significant benefits and compares unfavorably to some of its peers. Vanguard's suite of target retirement funds offer better performance track records and lower expense ratios than AOM. AOM's main advantage is its tax efficiency as an ETF, but this may not be relevant for investors who hold the fund in tax-advantaged retirement accounts.

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AOM is iShares Core Moderate Allocation ETF. 40% equity and 60% bonds.

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News for iShares Core Moderate Allocation ETF ETF (AOM)