BlackRock has added nine lifecycle prepared portfolios to its offerings for investors, designed for use in defined contribution and long-term retirement plans.
The funds have target maturity dates from 2010 to 2050. Once an investor’s retirement date has been determined, the glidepath of the fund will set future portfolio asset allocations, and risk will lower as retirement nears.
“The [Pension Protection] Act of 2006 is rapidly driving DC plan sponsors to some critical decisions points,” said Douglas DuMond, managing director and head of the U.S. defined contribution business at BlackRock.
The glidepath of lifecycle funds is an important component to the their success, and BlackRock plans ongoing risk monitoring of the portfolios.
“The glidepath allows for the flexibility to exploit broad market opportunities, a feature most glidepaths do not offer,” BlackRock states. The fund will be rebalanced periodically to include market movements and valuations, not just fund cash flows.