As a retirement plan provider, a key part of the service we provide is access to a robust institutional-grade investment program that aims to give plan members the best possible risk-adjusted investment performance over time.
That’s why we’ve partnered with BlackRock, the world’s largest asset manager and pioneer of the target date fund, a research-proven strategy for growing retirement wealth. Common Wealth was the first provider to offer BlackRock’s market-leading LifePath target date fund solutions outside the legacy insurance companies.
To support its fiduciary duty to plan members and deliver better risk-adjusted returns, BlackRock is evolving its investment strategy with a greater focus on sustainability. In late November 2022, BlackRock began to integrate Environmental, Social and Governance (ESG) building blocks into the LifePath funds. Specifically, BlackRock is transitioning the funds’ current market cap weighted global equity building blocks to ESG-optimized equity indices covering the same asset classes and geographies.
Why is BlackRock making this change?
BlackRock’s rationale for making the change is based on a growing body of evidence that combining traditional investing with ESG insights can improve long-term investment outcomes for plan members. BlackRock’s integration of ESG insights parallels an increasing focus on ESG from some of the world’s most sophisticated institutional investors, including some of the largest pension funds.
To learn more about BlackRock’s ESG transition in the LifePath funds, download this research paper.
What’s not changing: BlackRock’s target date fund strategy
With this transition, BlackRock is adding an ESG lens to a strategy that’s otherwise staying the same: research-backed and tailor-made for retirement. The LifePath portfolios will still provide plan members with broad diversification across asset classes, and automatic rebalancing and risk adjustment over time.
What’s next?
These changes will be made gradually in the LifePath funds over the coming months and will be reflected in upcoming fund fact statements. We’ve notified plan sponsors and members through recent plan communications.
Resources for employers and plan members
- Brochure: Integrating sustainability insights into BlackRock Canada LifePath funds
- FAQ: What is happening to your LifePath target date fund?
If you’d like to learn more about these changes and what they mean for your clients, reach out to your Common Wealth representative at sales@commonwealthretirement.com or book a meeting.
