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BlackRock Target-Date Portfolios, No Fuzz Solid Portfolios

BlackRock target-date portfolios-lifepath

This is the article displaying the target-date portfolios by BlackRock. At BlackRock, they are called LifePath funds. Here you will find a description, performance, and resources for the portfolios as well as detailed information on how to implement them yourself.

BlackRock target-date portfolios, no fuzz solid portfolios

BlackRock requires no introduction. But just in case, let me give you a quick primer. BlackRock are the guys behind iShares ETFs. They bought iShares from Barclays back in 2009.  iShares is the company behind many low-cost index ETFs. iShares helped move the ETF phenomenon a great deal forward. A move that is most likely regretted by Barclays today.

BlackRock is the largest wealth manager in the world, with $7.4 trillion under management as of 2019.

BlackRock’s foray into target-date funds has been a rocky one. The 11 iShares target-date funds they started with were shut down in 2011 because they failed to attract enough assets. The BlackRock target-date lineup was launched that same year.

Today the lineup of LifePath funds has $200 billion in assets under management. BlackRock states that 1 in 5 companies in Fortune Top 100 uses LifePath products. Or, in other words, 20 companies. 

BlackRock has a very educational and to the point educational material on target-date funds. You can find it here.

Description of BlackRock target-date portfolios

The BlackRock target-date funds are made of other funds. They are funds of funds, in other words. This is the standard and smart way of constructing a target-date fund. Many, if not most other target-date funds are built this way, fx, Dimensional Fund Advisors, Vanguard, and Fidelity.

They follow a standard glide path philosophy as do all other target-date portfolios. The closer you are to retirement age, the higher the bond allocation will be. Bonds (fixed income) have a lower risk level than stocks (equities).

BlackRock-Lifepath-Funds-Glidepath-Asset-Allocation
Source: BlackRock LifePath prospectus
BlackRock-Lifepath-Funds-Glidepath
Source: BlackRock LifePath prospectus

The BlackRock LifePath portfolios have a manageable number of asset classes, usually just six.

In the video below Christine Benz and Jeff Holt from Morningstar.com discusses the best target date funds and why they are the best.

https://www.youtube.com/watch?v=iPe8PxIi2q4

The portfolios target all the major asset classes with a smidgin of allocation to small-caps.

Disclaimer: These are target-date funds. By design, their asset allocation will change over time. In general, target-date funds shift more of their assets towards bonds as you age to lower your risk. This means that the asset allocation below will have changed until we update it here at portfolioeinstein.com. You can see a graphical of the glide path above.

Performance of BlackRock target-date portfolios

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
S&P 500 (Benchmark)131.46%3.69%13.52%10.54%-37.63%5 - very high risk0.04%1.79%
BlackRock LifePath Retirement Index Fund616.32%1.51%6.64%7.55%-13.50%2 - low risk0.05%1.97%
BlackRock LifePath Index 2060 Fund (25 year old)527.58%2.17%10.63%9.02%-38.83%5 - very high risk0.07%2.44%
BlackRock LifePath Index 2050 Fund (35 year old)627.60%2.19%10.65%9.03%-38.75%5 - very high risk0.07%2.44%
BlackRock LifePath Index 2040 Fund (45 year old)725.80%2.11%10.05%8.87%-34.50%5 - very high risk0.06%2.35%
BlackRock LifePath Index 2030 Fund (55 year old)722.03%1.87%8.71%8.42%-26.15%3 - medium risk0.06%2.20%

Building the portfolio

Below you can see the asset allocations for the portfolio. You can also see if the portfolio has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.

Asset Allocation for BlackRock target-date portfolios

BlackRock LifePath Index 2030 Fund

  • 36.98%  US Large Cap      (VV)
  • 2.32%    US Small Cap      (VIOO)
  • 7.77%    REITs     (VNQ)
  • 1.56%    International Developed Blend      (VEA)
  • 21.20%  International All-World ex-US     (VEU)
  • 26.03%  Total US Bond Market    (BND)
  • 4.14%    TIPS       (VTIP)

BlackRock LifePath Index 2040 Fund 

  • 46.60%  US Large Cap      (VV)
  • 1.08%    US Small Cap      (VIOO)
  • 13.03%  REITs     (VNQ)
  • 2.19%    International Developed Blend      (VEA)
  • 26.32%  International All-World ex-US     (VEU)
  • 9.40%    Total US Bond Market    (BND)
  • 1.38%    TIPS       (VTIP)

BlackRock LifePath Index 2050 Fund

  • 50.02%  US Large Cap      (VV)
  • 0.76%    US Small Cap      (VIOO)
  • 16.24%  REITs     (VNQ)
  • 1.13%    International Developed Blend      (VEA)
  • 30.76%  International All-World ex-US     (VEU)
  • 1.09%    Total US Bond Market    (BND)

BlackRock LifePath Index 2060 Fund

  • 49.69%  US Large Cap      (VV)
  • 0.97%    US Small Cap      (VIOO)
  • 16.17%  REITs     (VNQ)
  • 32.15%  International All-World ex-US     (VEU)
  • 1.02%    Total US Bond Market    (BND)

BlackRock LifePath Retirement Index Fund

This is the retirement fund offered by BlackRock. It is for when you are already in retirement. In other words, an income fund.

  • 22.09%  US Large Cap      (VV)
  • 4.15%    US Small Cap      (VIOO)
  • 0.51%    REITs     (VNQ)
  • 13.67%  International All-World ex-US     (VEU)
  • 50.82%  Total US Bond Market    (BND)
  • 8.76%    TIPS       (VTIP)

Check the best mutual funds and ETFs here.

How we select the right ETFs

There are a lot of ETFs out there. Most of them can be discarded because:

  • They are too expensive
  • They hold too few assets and are therefore too illiquid
  • They do not meet the criteria for representing the asset class they are supposed to mirror.

We have carefully selected an ETF for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?

As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.

You can find the socially responsible investing ESG ETFs in the same article.

Resources for BlackRock target-date portfolios

BlackRock’s primer on target-date funds (it’s excellent)

BlackRock’s education center (also excellent)

Get the Portfolio Einstein primer on target-date funds in our article Target Date Fund Portfolios (spoiler: BlackRock’s introduction is better!)

Compare different target-date funds in our article What Is The Best Target Date Fund?

Suggestions for your next steps

Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone

If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful. Rebalancing your portfolio lowers your risk and may even provide higher returns in the long run.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool

Conclusion

BlackRock knows the game of asset allocation. Their target-date portfolios are solidly built.

What’s one reason why you don’t like them?

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