BlackRock is one of the largest asset management companies in the world, managing over $10 trillion in assets. For individual investors, BlackRock offers a wide range of mutual funds and ETFs that provide exposure to various asset classes. With so many investment options, it can be overwhelming to know where to start when investing with Blackrock. This article provides 3 tips for effectively investing with Blackrock funds and ETFs. We will cover understanding Blackrock’s core index funds, utilizing Blackrock’s asset allocation ETFs, and minimizing costs through index investing. By following these tips, you can build a well-diversified, low-cost portfolio using Blackrock’s investment products.
Focus on Blackrock’s core index funds
Blackrock’s iShares suite of index funds and ETFs should be the core holdings for most investors. Index funds like the iShares Core S&P 500 ETF (IVV) offer broad market exposure at minimal costs. The average expense ratio for Blackrock’s core iShares ETFs is around 0.07%, compared to over 1% for actively managed mutual funds. Index investing has proven to beat active management over the long run. Blackrock’s index funds cover all the major asset classes, from stocks to bonds to real estate. By using index funds as your portfolio foundation, you get instant diversification and maximize your expected returns over time.
Utilize Blackrock’s asset allocation ETFs
Once you have your core holdings established, Blackrock’s asset allocation ETFs make diversification easy. These ETFs provide an all-in-one asset allocation tailored to different investment time horizons and risk profiles. Options like the iShares Core Growth Allocation ETF (AOR) hold a mix of stocks and bonds appropriate for long-term growth investors. Other choices like the iShares Core Conservative Allocation ETF (AOK) include a heavier fixed income allocation for more conservative investors. These asset allocation ETFs automatically rebalance to maintain their target asset allocation, saving you effort and cost.
Minimize costs through index investing
As discussed earlier, index funds and ETFs help minimize portfolio costs. Blackrock’s index-based products have expense ratios far lower than their actively managed funds. For example, the iShares Core S&P 500 ETF (IVV) has an expense ratio of just 0.03%, while the average actively managed large-cap mutual fund charges over 1%. Over decades, these cost savings really add up and can equal to hundreds of thousands in extra returns. This is why index investing should be the default choice when constructing your portfolio with Blackrock’s funds and ETFs.
By focusing on low-cost index funds, utilizing Blackrock’s asset allocation ETFs, and minimizing expenses, you can effectively invest with Blackrock. This framework helps you build a diversified, balanced portfolio aligned to your investment goals. Index investing with Blackrock provides a simple yet powerful way to access global markets and grow your wealth over time.