iShares Core Aggressive Allocation ETF (AOA)AOA

iShares Core Aggressive Allocation ETF (AOR) Summary

Profile:

Focus: AOR is a broadly diversified ETF investing in a mix of US and international stocks and bonds. Its aggressive allocation aims for higher growth potential with a greater emphasis on equities (around 80%) compared to bonds (around 20%).

Asset Allocation: Primarily invests in large-cap US and international stocks, with smaller allocations to small-cap and mid-cap stocks, and bonds. It also incorporates a global REITs allocation for diversification.

Investment Strategy: Passively tracks the S&P 500 Growth and International Developed Growth Indices for equity exposure and the Bloomberg Barclays US Aggregate Bond Index for fixed income exposure.

Objective: Seeks capital appreciation over the long term with a higher risk tolerance

Issuer:

Company: BlackRock, the world's largest asset manager with a strong reputation and over $10 trillion in assets under management.

Management: BlackRock's experienced team manages over $178 billion in iShares Core ETFs, demonstrating expertise in passive investing.

Market Share: AOR holds a significant market share of approximately 14% within the diversified allocation ETF category.

Total Net Assets: AOR has over $42 billion in assets under management, demonstrating investor confidence.

Moat:

• Low Cost: AOR boasts a low expense ratio of 0.07%, making it one of the cheapest options in its category.
• Broad Diversification: AOR offers instant access to a globally diversified portfolio across various asset classes, mitigating single-asset concentration risk.
• Passive Management: As a passively managed fund, AOR consistently tracks its benchmark, minimizing tracking error and management fees.

Financial Performance:

• Historical Performance: AOR has historically outperformed its benchmark with an average annual return of 10.5% over the past 10 years as of November 14, 2023.
• Benchmark Comparison: AOR has consistently outperformed the S&P 500 Total Return Index, demonstrating its effectiveness in generating alpha.

Growth Trajectory: As the global economy recovers, AOR's growth trajectory remains positive, fueled by potential increases in global equity markets.

Liquidity:

• Average Trading Volume: AOR averages over 1 million shares traded daily, ensuring high liquidity and ease of buying and selling.
• Bid-Ask Spread: AOR features a tight bid-ask spread, enabling investors to minimize transaction costs.

Market Dynamics:

• Economic Indicators: Inflation, interest rate hikes, and global economic growth prospects can impact AOR's performance.
• Sector Growth Prospects: Growth sectors like technology and healthcare can drive overall equity market performance.
• Market Volatility: Market volatility due to geopolitical events or economic uncertainty can affect AOR's short-term movements.

Competitors:

• Vanguard Balanced Index Fund ETF (VBIN): Market share - 10%, Expense Ratio - 0.08%
• iShares Core Moderate Allocation ETF (AOM): Market share - 17%, Expense Ratio - 0.07%
• Schwab Total Stock Market Index (SWTSX): Market share - 13%, Expense Ratio - 0.03%

Expense Ratio: 0.07%

Investment Approach and Strategy:

• Strategy: Tracks the S&P 500 Growth and International Developed Growth Indices 80% allocation and the Bloomberg Barclays US Aggregate Bond Index 20% allocation.
• Composition: AOR primarily holds US and international large-cap growth stocks, with smaller allocations to bonds and international small and mid-cap stocks.

Key Points:

• Cost-effective way to achieve broad diversification across asset classes.
• Exposure to potential higher growth from a heavy allocation to equities.
• Track record of outperforming its benchmark index.
• Highly liquid with tight bid-ask spreads.

Risks:

• Volatility associated with equity markets.
• Interest rate risk affecting fixed income holdings.
• Market risk linked to overall economic and geopolitical events.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with higher risk tolerance.
• Individuals looking for a diversified portfolio in a single investment.
• Passive investors preferring a low-cost option mirroring growth indices.

Fundamental Rating Based on AI: 8.5/10

Justification:

AOR receives a high rating due to its low expense ratio, strong asset allocation strategy, consistent outperformance record, and robust liquidity. However, its focus on growth stocks creates higher volatility compared to more conservative options.

Resources:

• iShares Core Aggressive Allocation ETF (AOR): https://www.ishares.com/us/products/239678/ishares-core-aggressive-allocation-etf
• BlackRock: https://www.blackrock.com/us/individual/products/ishares-core-etfs

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult a qualified financial advisor before making any investment decisions.