iShares Core 60/40 Balanced Allocation ETF

AOR

Market cap $2.83B

AOR offers a low-cost, diversified 60/40 equity and fixed income allocation, ideal for passive investors seeking a hands-off, all-in-one portfolio solution. While AOR provides broad asset class exposure and automatic rebalancing, it has historically underperformed lower-cost alternatives like VBAIX and VTI/BND blends. AOR's volatility can be higher due to small- and mid-cap exposure, but its structure helps minimize downside risk and simplifies portfolio management.

Markets hit new record with bets on a "Goldilocks" economy, but volatility persists. AI and international ETFs like QQQ, IVES and EZU could be good bets for 2H.

Volatile markets revive interest in multi-asset ETFs like AOR, AOA, AOM, AOK and MDIV for balanced growth, income and diversification.

The 60/40 portfolio, with 60% in equities and 40% in bonds, has long been the gold standard in the investment game. Yet, it has failed to deliver on its promise. In my view, a durable income strategy is a better approach, especially for funding retirement and becoming financially independent.

Retirees looking for more of a one-stop-shop investment solution that takes care of asset allocation may wish to check out some of the “balanced” ETF offerings offered by iShares.

iShares Core Growth Allocation ETF offers a diversified, balanced portfolio with a 60% equity and 40% fixed income allocation, ideal for moderate risk tolerance. AOR's historical performance shows lower volatility and drawdowns compared to a 100% S&P 500 portfolio, making it suitable for risk-averse investors. With a low expense ratio of 0.15% and a 2.44% quarterly dividend, AOR provides cost-effective, passive global investment exposure.

iShares Core Growth Allocation ETF has a balanced portfolio of fixed income and equity funds. AOR has yet to reach its price peak from late 2021, while the S&P 500 index has already surpassed its peak. AOR is not a growth-oriented fund and is likely to underperform the S&P 500 index in the long run.

Market volatility roared back in recent weeks on growing inflation worries, the uncertain timing of Fed rate cuts and escalating geopolitical tension in the Middle East. The combination of these factors has made investors jittery, compelling them to revisit their portfolios.

iShares Core Growth Allocation ETF has a 60/40 allocation in global equities and bonds through ETFs. Exposure to foreign securities implies some currency risk, which has been detrimental since the fund's inception in 2008. Among competitors, WisdomTree U.S. Efficient Core Fund implements a 60/40 strategy with a 1.5 leveraging factor and about 98% of assets in U.S. issuers.