BlackRock Launches Women-Focused Model Retirement Portfolios

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Investing is not a level playing field for women, who make on average 82 cents for every dollar that a man makes in the US, are often expected to take on child rearing responsibilities, and live about five years more than men on average. Because of workforce gaps and other factors, they may be underallocated to equities at critical periods during their long investment horizon.

The average woman investor has about 40% of her portfolio in cash, according to BlackRock.

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Kaewmanee Saekang/Dreamstime

“When women retire, their balances are typically 30% below men’s in the US,” says Anne Ackerley, who heads

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BlackRock
‘s

retirement group. “In Japan, the gap is 50% below men and the gap exists virtually everywhere in the world.”

Women investors generally fear bad investment decisions, so much so that the average woman has about 40% of her portfolio in cash, according to BlackRock.

Women of color face additional challenges saving for retirement due to inequality in the workplace and society more broadly. These inequities have been exacerbated by the pandemic.

Overall, women’s employment fell by 35% during the pandemic. Despite women returning to the workforce in the last 18 months, there are 826,000 fewer women in the workforce than pre-pandemic, according to Bureau of Labor Statistics data.

In response to these trends, BlackRock has launched a set of model portfolios specifically for women. The portfolios, which are offered through advisors, aim to bolster women’s retirement readiness by including gender-specific factors like earning potential, employment gaps, and life expectancy in portfolio construction.

“The framework is designed to help women overcome investment inertia,” said Lisa O’Connor, global head of Model Portfolio Solutions and Deputy CIO for Solutions at BlackRock, at a recent event introducing the funds. Like other target funds, the investment mix shifts based on a set retirement date to account for how risk tolerance can change over time—for example, portfolios emphasize growth equities starting out and transition to more stable investments later in the investment cycle. “This helps investors remain invested, even in periods of market volatility,” she says.

“Incorporating gender-specific demographics into our lifecycle model resulted in a tailored risk profile to better support women’s spending throughout retirement,” Chris Chung, head of Retirement Solutions Portfolio Management and co-manager of the model portfolios, said in a statement.

In a recent retirement survey, BlackRock found that 68% of women are concerned about outliving their retirement savings and 63% of women are looking for a financial advisor to help with their investments.

“These portfolios are cost effective, diversified, and professionally managed,” said Carrie Schroen, a divisional director at BlackRock, who helps advisors and portfolio managers build customized solutions for their clients. “We’ve been able to work across the full breath of BlackRock’s portfolio to deliver this outcome for women,” says Schroen.

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Credit: www.barrons.com /

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