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

 The strategy's effective investment philosophy supports an Above Average 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 allocation team managing the passive product drives the strategy's Above Average People Pillar rating. The strategy has a solid parent that earns an Above Average Parent Pillar rating. This firm has had overall attractive fees and a favorable lineup success ratio.

Analyst Rating

iShares Core S&P 500 ETF

iShares Core Total USD Bond Market ETF

iShares Core MSCI International Developed Markets ETF

iShares Core MSCI Emerging Markets ETF

iShares Core International Aggregate Bond 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 Growth Allocation ETF earns an Above Average Process Pillar rating.  The predominant contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 60% also influences the rating. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 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 Growth Index composed of a portfolio of underlying equity and fixed income funds intended to represent a growth allocation target risk 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, financial services and basic materials, that are similar to the category. The sectors with low exposure compared to category peers are healthcare and technology, with healthcare underweighting the average portfolio by 3.0 percentage points  and technology similar to the average. The portfolio is overweight in Developed Europe and Japan regions relative to the category average by 5.7 percentage points and 4.2 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 21.1 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 2.4 years, to the category average’s 5.4 years.

Above Average

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 17 years of portfolio management experience. Together, they manage a total of 258 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. The team has undergone a bout of turnover recently, with Amy Whitelaw leaving within the last five months. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process. 

 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.

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 Growth Allocation ETF

AOR tracks a proprietary index that provides exposure to equity securities, while also investing in fixed income, striking a balance between capital preservation, appreciation, and income.

iShares Core Growth Allocation ETF ultimately has a lot of exposure to correlated monetary policies in the West that are all leaning hawkish. U.S. market returns have been driven almost exclusively by AI and the biggest of tech stocks which are exposed to hawkish policies. While inflation data will show abating figures, jobs data was strong and inflation not only has to come down but it has to do so quickly for Fed satisfaction.

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iShares Core Growth Allocation ETF (AOR) at a 52-Week High

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