This target-date ETF holds a range of iShares stock and bond ETFs and tracks an asset allocation designed for a 2040 target date. It is managed so that the weighting of risk assets is gradually reduced over time.

It suits long-term investors who plan to retire around 2040 and want a single product to handle automatic asset allocation and rebalancing.

The ETF is managed by BlackRock (iShares) using a passive (index-tracking) approach.

The fund uses a fund-of-funds structure that holds multiple iShares ETFs representing stocks and bonds. As the 2040 target year approaches, it applies a glide path that reduces the stock allocation and increases the share of bonds and cash-like assets. The risk level declines automatically, without investors having to adjust the weightings themselves.

• Automatic allocation across global stocks and bonds in a single product
• A glide path that automatically reduces risk as the target date approaches

Assets under management (AUM) stand at $126.1M, and the expense ratio is 0.11% per year.

Compared with building a portfolio by combining individual asset-class ETFs yourself, the fund lets you delegate asset allocation and rebalancing to a single product.

Because it holds both stocks and bonds, it tends to show milder volatility than a pure equity ETF. However, with time still remaining until the target date, its stock weighting is relatively high, so it is affected by stock market swings.

Inflows tend to come from demand for retirement asset accumulation and the use of retirement pension accounts, and the fund becomes more defensive as the target date nears and its bond weighting rises. Capital is allocated between stocks and bonds depending on market conditions.

Its strength is that a single product provides automatic asset allocation and risk reduction. Limited room for individual adjustment and the fund-of-funds structure are points to consider.

Within the same LifePath series, alternatives with different target dates include ITDC (2035) if your retirement is earlier, and ITDE (2045) or ITDF (2050) if it is later. Investors already in retirement can also consider IRTR, which focuses on the withdrawal phase. Meanwhile, balanced stock-and-bond products like CGBL in the table, defensive allocations like DRSK, and alternative or multi-strategy products like ALLW and CTA take different approaches to asset allocation, so they differ in fees and risk characteristics.

Here are the points to review before investing in ITDD. It is wise to confirm in advance whether the target date matches your retirement plan, the stock and bond weightings, and the characteristics of the fund-of-funds structure.

Because a stock allocation remains until the target date, losses can occur during stock market downturns, and as a fund of funds, its results depend on the performance of the underlying ETFs it holds. If the target date does not align with your own plan, the risk level may not suit you.

It suits investors who want a single product to handle automatic allocation and risk reduction for long-term retirement assets. If your retirement is earlier or later, it is advisable to compare products with other target years, such as ITDC and ITDE, before choosing.