iShares Morningstar Multi-Asset Inc 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 cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Average Process 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 iBoxx High Yield Corporate Bond ETF

iShares Floating Rate Bond ETF

iShares Trust iShares 1-5 Year Investment Grade Corporate Bond ETF

iSh SP US PrfSt Shs

iShares Emerging Markets Dividend ETF

iShares International Select Dividend ETF

iShares 1-3 Year Treasury Bond ETF

iShares J.P. Morgan EM Local Currency Bond ETF

iShares Mortgage Real Estate 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 Morningstar Multi-Asset Inc ETF earns an Average Process Pillar rating.  The main driver of 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, like 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 unremarkable 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 Morningstar® Multi-Asset High Income IndexSM.  The fund generally will invest at least 80% of its assets in the component securities of its underlying index and in investments that have economic characteristics that are substantially identical to the component securities of its underlying index. The index is broadly diversified and seeks to deliver high current income while maintaining long-term capital appreciation. The fund is a fund-of-funds and invests primarily in the securities of the underlying funds that themselves seek investment results corresponding to their own underlying indexes.  

 The portfolio is overweight in real estate and basic materials relative to the category average by 14.5 and 7.6 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 11.5 and 9.7 percentage points , respectively. The portfolio is overweight in Emerging Asia and Developed Asia regions relative to the category average by 13.8 percentage points and 10.3 percentage points, respectively. The regions with low exposure compared to their category peers are North America and Japan, underweight the average by 34.4 percentage points and 3.3 percentage points, respectively.

 The fund’s bond sleeve takes on less interest rate risk as the fund’s average duration is 2.3 years, to the category average’s 4.4 years.

Average

Process

iShares Morningstar Multi-Asset Inc ETF benefits considerably from its team, earning it 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, indicating the 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 Morningstar Multi-Asset Income ETF

IYLD tracks an index of fixed-income, equity, preferred stock and REIT ETFs with a focus on income production.

The iShares Morningstar Multi-Asset Income ETF (IYLD) pays a 5.9% trailing distribution yield but has only achieved average annual returns of 2.5% over 10 years. The gap between the distribution yield and historical performance suggests that the IYLD ETF is an amortizing 'return of principal' fund, which should be avoided. There are better alternatives for investors seeking high yields from mostly fixed income investments, such as the TBIL ETF, the CLOZ ETF, and the UTF fund.

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