With an astounding $10.5 trillion in assets under management and a market cap of $120 billion, New York-based BlackRock Inc. (ticker: BLK) is the world’s largest asset manager. The firm was founded in 1998 by Larry Fink, who gained renown on Wall Street and around the world in the 1980s for his contribution to developing the U.S. mortgage-backed securities industry into the $11 trillion market it is today.
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BLK offers retail and institutional investors an incredibly wide-ranging selection of investment products and services that, of course, include hundreds of mutual funds and exchange-traded funds, or ETFs.
BLK was a pioneer in using state-of-the-art financial technology, more commonly called fintech, to lever up the performance of its funds and the satisfaction of its customers. The company’s singular focus is on delivering sustainable, long-term performance so its clients can enjoy more financial well-being.
As you might imagine, BLK offers dozens of investment products that are perfectly suitable for retirement saving. That’s because BlackRock emphasizes diversification and risk-managed total. Naturally, it offers equity funds, government and corporate bond funds, balanced funds, and other investments based on more aggressive and less well-known securities like master limited partnerships, or MLPs, standardized options and preferred stock.
If you have money to invest that’s sitting inside an IRA or are considering reallocating some of your IRA assets, BLK has several funds that will feel like they were tailor-made to meet your retirement planning needs.
Here are seven of the best BlackRock funds to buy for your IRA:
| Blackrock Fund | Expense Ratio |
| iShares 1-3 Year Treasury Bond ETF (SHY) | 0.15% |
| BlackRock Equity Dividend Fund (MDDVX) | 0.92% |
| iShares Core S&P 500 ETF (IVV) | 0.03% |
| BlackRock Emerging Markets Fund (MDDCX) | 1.11% |
| iShares Core Dividend Growth ETF (DGRO) | 0.08% |
| BlackRock Health Sciences Trust (BME) | 1.07% |
| iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) | 0.04% |
iShares 1-3 Year Treasury Bond ETF (SHY)
After a prolonged period of increases that began in the wake of the COVID-19 pandemic, interest rates are poised to fall. That’s good news for Treasury bonds and other fixed-income products because when rates drop, bond prices tend to rise. In other words, right now might be an excellent time to buy a high-quality bond fund for your IRA. BlackRock, which owns the iShares brand, offers SHY to fit that bill.
SHY is a $24 billion fund that tracks the ICE U.S. Treasury 1-3 Year Bond Index. That index is made up of U.S. Treasury bonds with relatively short remaining maturities of between one and three years. Short-term bonds should be less volatile than their longer-term counterparts, yet should still perform well on the upside when and if rates start to drop. Also, from a diversification standpoint, it’s always a good idea to have a high-quality, short-term bond fund in an IRA.
This fund focuses on traditional Treasury securities. SHY includes only standard, fixed-rate Treasurys. You will not find inflation-pegged bonds, Treasury strips, Treasury derivatives or anything of that nature in this fund.
SHY is a low-cost fund with an expense ratio of just 0.15%, or $15 annually for every $10,000 invested.
BlackRock Equity Dividend Fund (MDDVX)
The investment objective of MDDVX is to provide shareholders with long-term capital appreciation and reliable dividend income. This $18.9 billion mutual fund achieves this objective by investing in a well-diversified portfolio of dividend-paying equity securities.
MDDVX is not strictly a large-cap fund. It can invest in stocks of all market capitalizations. That said, most holdings inside MDDVX are large-cap companies and the portfolio managers are likely to maintain a large-cap bias going forward.
The fund will enhance its income generation by sometimes investing in preferred stock or convertible preferred securities, which are preferred stocks that can be converted into common shares at the shareholder’s discretion.
The fund has a yield of 1.7%, which may seem low for a dividend fund, but the portfolio management team at BlackRock doesn’t invest for current yield only. Instead, they concentrate on stocks with excellent dividend growth prospects, making this fund an exceptional choice for an IRA.
iShares Core S&P 500 ETF (IVV)
If you have the investment temperament and time horizon to endure the ups and downs of the broad stock market, a fund based on the S&P 500 should probably be the core of your IRA portfolio.
IVV is a $488 billion, low-cost ETF. It is designed to closely track the performance of the S&P 500 after the fund’s exceptionally low 0.03% expense ratio is accounted for.
As the fund’s name implies, IVV is designed to be a core or foundational investment. It’s a quality large-cap fund that will work well inside an IRA, but because of the low level of internal trading that contributes to high tax efficiency, it’s an excellent choice for a taxable account as well.
In addition to the fund’s growth potential, IVV’s current yield of 1.3% will serve to enhance total return over the long run.
[SEE: 8 Best New ETFs to Buy.]
BlackRock Emerging Markets Fund (MDDCX)
The U.S. has the strongest and most dynamic economy in the world, and its financial markets reflect that reality. Savvy investors know, however, that it’s smart to diversify internationally and that the U.S. is not the only game in town.
MDDCX is a $5.2 billion fund that invests in companies based in emerging market countries, which simply means countries with strong but still developing financial markets and industrial infrastructure. Right now that means Asia, Latin America, Eastern Europe and some parts of Africa. MDDCX is not an index fund, but the Hong Kong-based portfolio management team does select their stocks from countries included in the MSCI Emerging Markets Index.
A look at the current portfolio shows that Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) is the fund’s top holding.
This fund may not be suitable for conservative investors who are quickly approaching retirement, but younger people looking for a long-term investment should consider MDDCX for their IRA.
iShares Core Dividend Growth ETF (DGRO)
A dividend growth investment strategy is based on the well-founded assumption that as a stock’s income increases, it becomes inherently more valuable. That is the principle behind the Morningstar U.S. Dividend Growth Index and the investment rationale behind DGRO, the $27 billion ETF that mirrors that index.
Investors have come to expect reasonable fees and expenses from iShares ETFs, and DGRO will not disappoint in that regard. The fund’s expense ratio comes in at just 0.08%. What that means to shareholders who own DGRO in IRA accounts is that the fund will have a practically imperceptible tracking error as it mirrors its benchmark.
Currently, DGRO has a reasonable yield of 2.4%, but because of the nature of the fund, investors should see their income incrementally but steadily grow over the years. Dividend growth coupled with the potential for capital appreciation makes DRGO an excellent core IRA investment.
BlackRock Health Sciences Trust (BME)
BME is not an open-end fund like most other mutual funds and ETFs. BME is in a class of securities called closed-end funds. Closed-end funds differ from their open-end counterparts in that the number of shares outstanding is fixed.
Open-end funds issue new shares whenever new investors buy, and they cancel shares when someone sells. The result is that closed-end funds like BME have a dynamic supply and demand element to their market price, whereas open-end funds generally do not. Closed-end securities are not as popular as open-end investments, but they should not be ignored when looking for funds to buy for your IRA.
BME is featured on this list because of the well-earned confidence in the skills of the fund’s management team and the tremendous long-term growth potential in the health sciences sector.
A look at the current top holdings of BME will reveal names like Eli Lilly & Co. (LLY), Boston Scientific Corp. (BSX) and Amgen Inc. (AMGN). These firms operate on the cutting edge of health care and medical technology and will contribute greatly to the total return of the fund over the long run.
iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB)
IGSB has current assets under management of just over $20 billion. It’s an index fund that is designed to mirror the ICE BofA 1-5 Year Corporate Bond Index. An allocation to high-quality corporate bonds can enhance the diversification and overall performance of almost any IRA account. IGSB is a well-run, low-cost ETF that deserves consideration.
Virtually all holdings in IGSB are domestic, investment-grade corporate bonds with maturities of between one and five years remaining. The fund currently yields 3.6%, which is in line with its peers in the short-term corporate bond space. Another thing to consider is the fund’s 0.04% expense ratio, which is low even for a bond index fund.
If you’re looking for exposure to relatively short-term, investment-grade corporate bonds, you can’t do much better than IGSB as the core fixed-income component of your IRA portfolio.
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7 of the Best BlackRock Funds to Buy in Your IRA originally appeared on usnews.com
Update 07/12/24: This story was published at an earlier date and has been updated with new information.
