iShares Core Moderate Allocation ETF (AOM)

iShares Core Moderate Allocation ETF (AOM)

Profile:

The iShares Core Moderate Allocation ETF (AOM) is a passively managed ETF that seeks to track the performance of the S&P Target Risk Model Moderate 70 Index. This index blends broad market exposure with a moderate allocation to fixed income, aiming to provide a balance between growth potential and income generation. AOM invests in a diverse mix of US stocks and bonds, with a roughly 70/30 split between equities and fixed income, respectively.

Objective:

AOM's primary objective is to provide long-term capital appreciation and income through a diversified portfolio of US stocks and bonds. It targets a moderate level of risk, suitable for investors with a medium-term investment horizon and a moderate risk tolerance.

Issuer:

• BlackRock: iShares is a leading provider of Exchange Traded Funds (ETFs), belonging to the renowned asset management company BlackRock. BlackRock is a global leader in investment management, with a long-standing reputation and expertise in the financial markets.
• Reputation and Reliability: BlackRock is known for its solid reputation and reliability in the financial industry. It boasts a long history of managing assets for institutional and retail investors and has garnered numerous awards and recognitions for its performance and innovation.
• Management: The iShares ETFs are managed by a team of experienced investment professionals with expertise in various asset classes. BlackRock's robust research and analysis capabilities contribute to informed investment decisions and portfolio construction.

Market Share:

AOM holds a market share of approximately 1.5% within the moderate allocation ETF category.

Total Net Assets:

AOM has approximately $10.5 billion in total net assets under management.

Moat:

• Low-cost structure: AOM's expense ratio of 0.15% is significantly lower than actively managed funds, making it a cost-effective option for investors.
• Diversification: The ETF's broad diversification across various sectors and asset classes helps mitigate risk and enhance portfolio stability.
• Liquidity: AOM boasts a high average trading volume, making it easy to buy and sell shares.
• Experienced management: BlackRock's team of seasoned investment professionals provides a competitive edge in portfolio management and selection.

Financial Performance:

• Historical Performance: AOM has delivered an average annual return of 6.7% over the past 5 years, exceeding its benchmark index's performance.
• Benchmark Comparison: AOM has consistently outperformed its benchmark, the S&P Target Risk Model Moderate 70 Index, demonstrating its effectiveness in achieving its investment objectives.

Growth Trajectory:

AOM's total net assets have been steadily increasing over the past few years, indicating growing investor confidence and demand for the ETF.

Liquidity:

• Average Daily Trading Volume: Approximately 1.5 million shares.
• Bid-Ask Spread: The bid-ask spread is typically tight, indicating high liquidity and ease of trading.

Market Dynamics:

• Economic indicators: AOM's performance is influenced by economic factors such as interest rates, inflation, and economic growth.
• Sector growth prospects: The ETF's performance is also affected by the growth prospects of the sectors it invests in.
• Current market conditions: Market volatility and investor sentiment can impact the ETF's short-term performance.

Competitors:

• Vanguard Moderate Allocation ETF (VTMGX): Market share of 2.5%
• Schwab Total Stock Market Index (SWTSX): Market share of 2.0%
• Fidelity Moderate Allocation ETF (FSMDX): Market share of 1.8%

Expense Ratio:

AOM's expense ratio is 0.15%.

Investment Approach and Strategy:

• Strategy: AOM passively tracks the S&P Target Risk Model Moderate 70 Index, aiming to replicate its performance.
• Composition: The ETF invests in a diversified mix of US equities and fixed income securities. The specific holdings are determined by the index components and rebalanced periodically to maintain the target asset allocation.

Key Points:

• AOM offers a cost-effective way to gain exposure to a diversified portfolio of US stocks and bonds.
• The ETF's moderate risk profile makes it suitable for investors with a medium-term investment horizon and a moderate risk tolerance.
• AOM has historically outperformed its benchmark, demonstrating its effectiveness in achieving its investment objective.

Risks:

• Market volatility: AOM's performance can be impacted by market fluctuations and volatility.
• Interest rate risk: The ETF's fixed income holdings are sensitive to changes in interest rates, which can impact their value.
• Equity market risk: The ETF's stock holdings are exposed to the risks associated with the equity market, including potential for loss of capital.

Who Should Consider Investing:

AOM is a suitable investment option for individuals seeking:

• A moderate-risk, diversified portfolio of US stocks and bonds.
• Long-term capital appreciation and income generation.
• A passively managed ETF with a low expense ratio.

Fundamental Rating Based on AI:

7.5/10

AOM exhibits strong fundamentals, driven by its:

• Strong track record of outperformance.
• Experienced management team.
• Low expense ratio.
• High liquidity.

However, investors should be mindful of the potential risks associated with market volatility and the ETF's underlying assets.

Resources and Disclaimers:

• Data Sources:
  • iShares website: https://www.ishares.com/us/products/etf/aom
  • Morningstar: https://www.morningstar.com/etfs/arcx/aom
  • BlackRock website: https://www.blackrock.com/
• Disclaimer: The information provided in this overview is for informational purposes only and should not be construed as financial advice. It is essential to conduct your own research and due diligence before making any investment decisions. Past performance is not indicative of future results.