As exemplified in 2023, attempting to time the market by holding cash as a primary investment yielded disappointing results.
Morningstar, as of 12/31/23. U.S. stocks defined as S&P 500 Index. Intl stocks defined as MSCI World Index. REITS defined as MSCI US REIT Index. Bonds defined as Bloomberg US Aggregate Index. Cash defined as Bloomberg 1-3 Year Treasury Bills. *Source: Bloomberg, ICE Benchmark Administration, World Gold Council. Gold based on the LBMA Gold Price PM in USD, expressed in local currencies.
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BSIIX never lost money over any 3-year rolling period since the Great Financial Crisis of 2008. Only 5% of taxable bond funds can make that claim.*
The first active ETF managed by Rick Rieder, a dynamic bond portfolio seeking attractive, long-term income across market cycles.
A high conviction, high active share strategy managed by Alister Hibbert, BlackRock's largest hedge fund manager.
*Source: Morningstar, as of 12/31/2023. Bond funds defined as all taxable bond mutual funds.
Bloomberg; Cliffwater as of 4/25/24. Yield is represented by yield to worst, a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting. High yield refers to the Bloomberg U.S. High Yield Index. Private credit refers to the Cliffwater Direct Lending Index. U.S. 1-3Y Treasury refers to the Bloomberg U.S. Treasury 1-3 Yr Index. U.S. 3-7Y Treasury refers to the Bloomberg U.S. Treasury 3-7Yr Index. U.S. Aggregate bond refers to the Bloomberg U.S. Aggregate Bond Index. Muni bond refers to the Bloomberg Municipal Bond Index.
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
Bond losses in 2022 came off record low yields. But now that rates are higher, you need to reframe how you view bond risk and return, and how the “yield cushion” can potentially protect against losses even if rates rise.
ALTERNATIVES
A market neutral strategy seeking consistent returns with low correlations to broad asset classes through a technology-driven process.
PBAIX invests across 25+ developed and emerging market countries and seeks to capitalize on elevated volatility and macro dispersion.
COVERED CALL ETFs
Seek high income from a monthly covered call strategy on treasuries.
Seek income and growth potential in a strategy that combines active, large-cap stock selection with an index covered call strategy.
BUFFER ETFs
Uses options to participate in the markets up to a pre-determined cap, while seeking to provide a targeted level of downside protection, helping you stay invested in volatile markets.
IVVB seeks to track the share price return of the iShares Core S&P 500 ETF in a convenient, liquid, and cost-effective access to an options-based risk management strategy.
Factset Earnings Insight report, 4/26/24. “Expected” refers to analyst estimates.
U.S. companies beat lowered earnings expectations in Q1. While there is certainly dispersion beneath the surface, strengthened earnings in aggregate continue to support U.S. equity market performance.
Access profitable U.S. companies that have low leverage and demonstrate consistent earnings over time with exposure to high quality U.S. stocks.
Access and exposure to U.S. companies that design, manufacture, and distribute semiconductors, which may benefit from powerful mega forces like the rise of AI and digital disruption.
Invests in high growth companies driving technological disruption selected for their rapid and sustainable growth potential from the development, advancement and use of science and/or technology.
Seek long-term growth and international diversification across developing markets with exposure to large and mid-capitalization companies excluding those in China.
* BlackRock Credit Strategies Fund (CREDX) is an unlisted, registered, closed-end, continuously offered interval fund with exposure to private credit including direct lending co-investment deals and standalone private credit exposure. No guarantee can be given that the Fund will be able to identify similar or comparable investment opportunities. The Fund’s portfolio composition is subject to change anytime without notice as permitted by the Fund’s offering and governing documents, as may be supplemented and amended. BlackRock Private Credit Fund (BDEBT) is a non-traded business development company (“BDC”) seeking to target attractive risk-adjusted returns produced primarily from current income generated by investing primarily in directly-originated, senior-secured corporate debt investments. More detailed information regarding this fund can be found in the Important Notes section of this document or contained in the applicable Fund’s prospectus, as applicable, and related documentation, all of which should be reviewed carefully and contain additional terms to those included in this summary.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. Read the prospectus carefully before investing.
Investing involves risks, including possible loss of principal.
Transactions in shares of ETFs may result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
Actively managed funds do not seek to replicate the performance of a specified index, may have higher portfolio turnover, and may charge higher fees than index funds due to increased trading and research expenses. Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and than the general securities market. There can be no assurance that performance will be enhanced or risk will be reduced for funds that seek to provide exposure to certain quantitative investment characteristics ("factors"). Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. In such circumstances, a fund may seek to maintain exposure to the targeted investment factors and not adjust to target different factors, which could result in losses. A BuyWrite Strategy ETF’s use of options may reduce returns or increase volatility. During periods of very low or negative interest rates, the Underlying Fund may be unable to maintain positive returns. Very low or negative interest rates may magnify interest rate risk. In a falling interest rate environment, the ETF may underperform the Underlying Fund. By writing covered call options in return for the receipt of premiums, the ETF will give up the opportunity to benefit from increases in the value of the Underlying Fund but will continue to bear the risk of declines in the value of the Underlying Fund. The premiums received from the options may not be sufficient to offset any losses sustained from the volatility of the Underlying Fund over time. The ETF will be subject to capital gain taxes, ordinary income tax and other tax considerations due to its writing covered call options strategy. There can be no guarantee that a Buffer ETF will be successful in its strategy to provide downside protection against Underlying ETF losses. The Funds do not provide principal protection or non-principal protection, and, despite the Approximate Buffer (the “Buffer”), an investor may experience significant losses on their investment, including the loss of their entire investment. A blended portfolio of Expiring Options and New Options during a Rebalance Period will impact the Fund’s ability to realize the full benefit of the Buffer or may subject the Fund’s return to an upside limit that is slightly lower or higher than the Approximate Cap (the “Cap”) for the applicable Hedge Period. Accordingly, investors may bear losses against which the Buffer is anticipated to protect and be subject to an upside limit that is lower than the Cap. In the event an investor purchases Fund shares after a Hedge Period begins or sells Fund shares prior to the end of the Hedge Period, the returns realized by the investor will not match those that the Fund seeks to provide. In periods of extreme market volatility, the Fund’s return may be subject to downside protection significantly lower than the Buffer and an upside limit significantly below the Cap. A new cap is established during each Rebalance Period and is dependent upon current market conditions. As such, the Cap is likely to change, sometimes significantly, from one Hedge Period to the next.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets, in concentrations of single countries or smaller capital markets.
No proprietary technology or asset allocation model is a guarantee against loss of principal. There can be no assurance that an investment strategy based on the tools will be successful.
Any indexes referenced herein are used under license by BlackRock and/or Aperio. Indexes represent unmanaged groups of securities. Investing directly in an index is not possible. Reference to an index does not imply that the portfolio would achieve returns, volatility, or other results similar to that index. Further, an index’s composition may not reflect the manner in which a client portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility, or tracking error targets, all of which are subject to change over time. Any index referenced would necessarily be materially different in strategy and volatility from the client account.
The S&P 500® Index is an equity benchmark for US stock performance. It is a capitalization-weighted index covering 500 large US companies chosen by Standard & Poor’s for market size, liquidity, and industry group representation. The S&P 500® index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by Aperio. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services, LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Aperio. No Aperio strategy or product is sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) or strategies, nor do they have any liability for any errors, omissions, or interruptions of any index.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Investors should consult their tax or legal advisor regarding such matters.
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
The BlackRock and iShares Funds within the model portfolios are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). BlackRock Fund Advisors, an affiliate of BlackRock Investments, LLC, is a registered investment adviser.
For more information on the differences between ETFs and mutual funds, click here
© 2024 BlackRock, Inc., or it's affiliates. All Rights Reserved. BLACKROCK, iSHARES, APERIO, and ALADDIN are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
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