BlackRock has created a new version of its LifePath target date funds for the Common Good Plan and other plan sponsors that offer group defined contribution retirement arrangements through a non-insurance platform. The new LifePath Target Date Funds will include very similar, but not identical, investment holdings and adopt asset allocation methodology that is used by Blackrock for its existing LifePath target date funds. BlackRock’s existing Canadian LifePath target date funds are the market leader in Canada for target date funds, have been in operation since 2007, and have over $32 billion in assets under management. Because the BlackRock funds that have been created for the Common Good Plan are new, they do not currently have a performance history. Performance history for the new LifePath Target Date Funds will be available on the fund fact sheets (available during the enrollment process and on the plan’s online dashboard) in the future.
What are the target date funds offered by BlackRock?
A target date fund offers a balanced investment portfolio within a single fund, and the investment mix is calibrated by the investment manager based on a retirement date. BlackRock LifePath Target Date Funds are professionally managed, diversified portfolios and are structured to reduce risk as the ‘target date’ approaches.
You can learn more about LifePath Target Date Funds in this video.
Do I have a choice as to which companies or stocks I can invest in?
No, the Common Good Plan is meant to be a long-term savings plan. To assist with that objective, only target date funds are offered at this time.
Who manages the investments for the Common Good Plan?
The investment manager for the Common Good Plan is BlackRock, the world’s largest asset manager. Founded in 1988, BlackRock has over $8.67 trillion USD in assets under management, including managing over C$200 billion in assets for Canadian clients. The firm pioneered target date funds in 1993 with the launch of LifePath Funds. BlackRock is the market leader in Canada for target date funds, with over C$30 billion in assets in its LifePath products, which have been serving Canadian investors since 2007. LifePath is used as the default investment option in some of Canada’s largest defined contribution plans.
Are the investments guaranteed?
Target date funds are not guaranteed at any time, including at the target date, and will fluctuate based on stock market performance.
What happens if the market drops?
The value of the target date funds can vary due to market performance. The purpose of target date funds is to help members invest for the long-term. It’s not a short-term approach, which would require a more aggressive investment strategy.
What is Common Good’s policy when it comes to responsible investing?
The Common Good Plan is interested in offering something thoughtful on responsible investing, also known as ESG (Environmental, Social, and Governance), as part of our plan. The plan’s funds are managed by BlackRock, which manages more than $8.67 trillion in assets and serves more than 35 million investors. BlackRock is committed to evaluating sustainability insights and data across all of its investment processes and focusing on its dedicated investment stewardship activities.
BlackRock is currently researching ESG options in Canada and is looking to evolve the target date fund portfolios in the near future. We will continue to work with BlackRock to explore opportunities to integrate more responsible investing components into the plan’s investment program.
For more information on BlackRock’s approach to sustainable investing, you can check out the firm’s 2021 Stewardship Expectations, as well as BlackRock CEO Larry Fink’s focus on sustainability in his annual letter to chief executives.
Are target-date funds the only investment options?
Yes.
What is a target date fund?
Target date funds are professionally managed, diversified investment funds, meaning investing in a BlackRock LifePath Fund can provide an all-in-one investment solution at any age.
Each fund holds a number of underlying investments – from stocks to bonds, including U.S. and global markets, as well as real assets such as real estate and infrastructure – creating diversified funds with one main objective: helping to manage your investment risk throughout your working years and into retirement.
When you’re young and far from retirement, the investment mix is more aggressive to help your investments grow. As you approach retirement, the fund automatically shifts to a more conservative allocation with the goal of preserving your savings. When you arrive at your desired retirement date, the fund shifts to an investment mix to help you retain spending power through retirement.
What is a target date fund?
Target date funds are professionally managed, diversified investment funds, meaning investing in a BlackRock LifePath Fund can provide an all-in-one investment solution at any age.
Each fund holds a number of underlying investments – from stocks to bonds, including U.S. and global markets, as well as real assets such as real estate and infrastructure – creating diversified funds with one main objective: helping to manage a member’s investment risk throughout their working years and into retirement.
When a member is young and far from retirement, the investment mix is more aggressive to help their investments grow. As they approach retirement, the fund automatically shifts to a more conservative allocation with the goal of preserving the member’s savings. When they arrive at their desired retirement date, the fund shifts to an investment mix to help the member retain spending power through retirement.