BlackRock LifePath Index Target-Date Series

The following is our latest Fund Analyst Report for BlackRock LifePath Index target-date series. Morningstar Premium Members have access to full Analyst Reports such as this for more than 1,000 of the largest and best mutual funds. Not a Premium Member? Gain full access to our Analyst Reports and advanced tools immediately when you try Morningstar Premium free for 14 days.

The BlackRock LifePath Index target-date series of funds features an innovative team with topnotch resources. It continues to earn a Morningstar Analyst Rating of Gold for its cheapest share classes and Silver for its more expensive ones.

This index-based series benefits from BlackRock’s robust approach to asset allocation and a research-intensive culture. They keep costs low by investing exclusively in passive index funds, though this gives management fewer tools to outperform over shorter periods compared with more active strategies that can tactically tilt the portfolio or select talented active managers. Yet, the team continues to innovate, with current research looking at ways to get targeted fixed-income exposures across the glide path. In 2022, the team will remove the iShares US Aggregate Bond Index in favor of five more pinpointed fixed-income index funds whose allocation will vary across the glide path in order to provide diversification benefits. These changes demonstrate the team’s dedication to continual improvements.

The team does not implement tactical moves, choosing instead to make incremental changes to allocations across the glide path. For example, in 2019, the team lowered the series’ overweight to global REITs early in the glide path to 5% from 16% to put more emphasis on assets with higher growth potential through broader equity index funds. The team’s willingness to revisit, and reverse, prior assumptions is another sign of its forward-thinking nature.

The team has been stable since it was restructured in December 2020. Chris Chung, head of asset allocation and custom strategies for LifePath, has been the lead manager for the past year following the departure of longtime manager Matt O’Hara. Chung’s track record here, although short, demonstrates his ability to continue employing the team’s forward-looking process, and we expect them to continue enhancing this series. The team leverages the expertise of Partha Mamidipudi, head of human capital research, whose team, in tandem with the asset-allocation research, informs the glide path. Management also has access to the firm’s breadth of data and tools. We remain confident that their resources and drive to enhance this low-cost solution will continue to win out over the long term.