Investment Products and Services

BlackRock Updates Lifepath TDFs

BlackRock has announced changes to its LifePath series of target-date funds (TDFs). The firm says it now will offer a broader choice among varying degrees of active asset management within the fund series. It also will introduce a new fund designed to capture “smart beta” factors.

The LifePath fund series will be renamed BlackRock LifePath Dynamic. These funds will offer greater flexibility in adjusting the portfolio’s asset allocation in response to market conditions and opportunities, the firm says. It will also provide access to more actively managed exposures. The exposures will include strategies managed by the firm’s Scientific Active Equity, Fundamental Fixed Income and Global Tactical Asset Allocation teams.

LifePath Dynamic is designed for plan sponsors who seek additional return potential, and plans whose participants have a higher risk tolerance or are behind in their savings. The funds are managed by Matthew O’Hara, co-head of LifePath and global head of the Lifetime Asset Allocation Group at BlackRock, and Phil Green.

The BlackRock LifePath Active series will be renamed BlackRock LifePath Smart Beta. Its exposures will be converted to 80% to 90% iShares smart beta exchange-traded funds (ETFs). Smart beta strategies have become increasingly popular for investors who want to manage risk and target precise exposure to factors that are historical drivers of return, the firm says. BlackRock LifePath Smart Beta funds are in the middle of the flexibility spectrum between BlackRock’s new LifePath Dynamic funds and the flagship LifePath Index funds. They are managed by O’Hara, Ked Hogan and Andrew Ang.

There will be no changes in the investment process or strategy of BlackRock LifePath Index funds.

SSGA to Introduce Proprietary Indexes to Replace Terminated Russell Indexes

State Street Global Advisors (SSGA) has announced that underlying indexes tracked by the SPDR Russell 1000 Low Volatility exchange-traded fund (ETF) and the SPDR Russell 2000 Low Volatility ETF will be changed. The move is a result of FTSE Russell’s decision to terminate the Russell 1000 Low Volatility Index and the Russell 2000 Low Volatility Index.

SSGA will introduce proprietary indexes to replace the two Russell Indexes being terminated. Beginning on or about December 14, 2016, the name of the SPDR Russell 1000 Low Volatility ETF (LGLV) will change to the SPDR SSGA US Large Cap Low Volatility Index ETF (LGLV), and LGLV will seek to track the SSGA US Large Cap Low Volatility Index. Also beginning on or about December 14, 2016, the name of the SPDR Russell 2000 Low Volatility ETF (SMLV) will change to the SPDR SSGA US Small Cap Low Volatility Index ETF (SMLV), and SMLV will seek to track the SSGA US Small Cap Low Volatility Index. The gross and net expense ratios of both funds will remain at 0.12%.

“We are excited to leverage our extensive index capabilities, as well as quantitative driven research, to offer an innovative solution for investors who seek to mitigate volatility in an uncertain market,” says Nick Good, co-head of the Global SPDR business at State Street Global Advisors. “By self-indexing we can continue to offer proprietary small-and-large cap low volatility ETFs to our current and future SPDR clients.”

State Street Global Advisors (SSGA) is the asset management business of State Street Corporation.