Ready-Made, AGE-BASED OPTIONS

The CollegeAdvantage age-based options are the simplest of all our Direct Plan investment options. We call them “ready-made” because the asset mix and allocation milestones are pre-determined. They are designed to take into account your child’s age and the number of years before he or she attends college. As your child grows, your portfolio shifts from growth to lower risk options. This is achieved by reallocating the asset mix each time the beneficiary reaches set age intervals, from a mix weighted toward equity (stocks) to a mix weighted toward fixed-income (bonds) and money market funds. Our age-based options are our most popular because they offer a long-term investment plan and an easy way to begin saving for college.


There are four age-based options to meet your needs. Three are primarily invested in passively managed Vanguard index options, offering a conservative, moderate, and aggressive age-based choice. The fourth is The Advantage Age-Based Option, which invests in four carefully selected portfolios, each with an asset mix of individual CollegeAdvantage equity (stock) and fixed-income (bond) options, providing a blend of passive and active fund management from multiple fund managers.


Please refer to the CollegeAdvantage Offering Statement and Participation Agreement for details.

VANGUARD AGE-BASED OPTIONS

The three Vanguard age-based options allow you to choose based on your tolerance for risk. The assets are managed according to the age of your child (the beneficiary), along with your risk tolerance, through a series of pre-selected investment portfolios. The Vanguard age-based options are primarily invested in passively managed index funds, meaning they seek to match market performance, but generally cost less than actively managed options.

       

 

      AGE OF BENEFICIARY
      CONSERVATIVE 1
      MODERATE 2
      AGGRESSIVE 3
      5 or Younger

      Vanguard Moderate Growth Index Portfolio

       

      Vanguard Growth Index Portfolio

       

      Vanguard Aggressive Growth Index Portfolio

       

      6 through 10

      Vanguard Conservative Growth Index Portfolio

       

      Vanguard Moderate Growth Index Portfolio

       

      Vanguard Growth Index Portfolio

       

      11 through 15

      Vanguard Income Portfolio

       

      Vanguard Conservative Growth Index Portfolio

       

      Vanguard Moderate Growth Index Portfolio

       

      16 through 18

      Vanguard Income Portfolio

       

      Vanguard Income Portfolio

       

      Vanguard Conservative Growth Index Portfolio

       

      19 or older

      Vanguard Prime Money Market Option

       

      Vanguard Income Portfolio

       

      Vanguard Income Portfolio

       

      U.S. Stocks U.S. Stocks
      International Stocks International Stocks
      Bonds Bonds
      Short-Term Investments Short-Term Investments

FIND YOUR RISK TOLERANCE.

Knowing what style of investor you are can greatly help when selecting an investment option.

THE ADVANTAGE AGE-BASED OPTION


The Advantage Age-Based Option invests in four distinct asset class portfolios made up of existing CollegeAdvantage equity (stock) and fixed-income (bond) options. Each portfolio combines actively managed and passively managed investment options in order to reduce both fees and relative risk. Actively managed funds seek to outperform the market through the buying and selling strategies of the professional investment managers, while passively managed funds are included to add diversification and to help lower fees.


AGE OF BENEFICIARY
ADVANTAGE PORTFOLIOS TARGET ASSET ALLOCATION
5 or Younger

U.S. Equity Portfolio 60% U.S. Equity Portfolio

International Equity Portfolio 30% International Equity Portfolio

Diversified Fixed-Income Portfolio 9.75% Diversified Fixed-Income Portfolio

Short-Term Fixed-Income Portfolio 0.25% Short-Term Fixed-Income Portfolio

6 through 9

U.S. Equity Portfolio 55% U.S. Equity Portfolio

International Equity Portfolio 30% International Equity Portfolio

Diversified Fixed-Income Portfolio 14.62% Diversified Fixed-Income Portfolio

Short-Term Fixed-Income Portfolio 0.38% Short-Term Fixed-Income Portfolio

10 through 12

U.S. Equity Portfolio 50% U.S. Equity Portfolio

International Equity Portfolio 25% International Equity Portfolio

Diversified Fixed-Income Portfolio 24.37% Diversified Fixed-Income Portfolio

Short-Term Fixed-Income Portfolio 0.63% Short-Term Fixed-Income Portfolio

13 through 16

U.S. Equity Portfolio 20% U.S. Equity Portfolio

International Equity Portfolio 20% International Equity Portfolio

Diversified Fixed-Income Portfolio 58.50% Diversified Fixed-Income Portfolio

Short-Term Fixed-Income Portfolio 1.50% Short-Term Fixed-Income Portfolio

17 or older

U.S. Equity Portfolio 5% U.S. Equity Portfolio

International Equity Portfolio 5% International Equity Portfolio

Diversified Fixed-Income Portfolio 37.05% Diversified Fixed-Income Portfolio

Short-Term Fixed-Income Portfolio 52.95% Short-Term Fixed-Income Portfolio

U.S. Stocks U.S. Stocks
International Stocks International Stocks
Bonds Bonds
Short-Term Investments Short-Term Investments
U.S. Equity
Portfolio
  • Vanguard Institutional Index Fund
  • Vanguard Windsor II Fund
  • Vanguard Morgan Growth Fund
  • Vanguard Extended Market Index Fund
  • Vanguard Strategic Equity Fund
International
Equity Portfolio
  • GE Institutional International Equity Fund
  • Vanguard Developed Markets Index Fund
Diversified
Fixed-Income Portfolio
  • Vanguard Inflation-Protected Securities Fund
  • Vanguard Total Bond Market II Index Fund
  • PIMCO Total Return Fund
  • PIMCO High Yield Fund
Short-Term
Fixed-Income Portfolio
  • Vanguard Prime Money Market Fund
VIEW PORTFOLIO DETAILS

ASSET ALLOCATION OF THE ADVANTAGE AGE-BASED OPTION


The asset allocation mix illustrated above is the target mix as of November 4, 2013 of the Advantage Age-Based Option. The asset allocation of each underlying Portfolio will be actively managed by CollegeAdvantage, and CollegeAdvantage may adjust the weighting in the investment options within each Portfolio, or change the investment option mix within the respective Portfolios within a predetermined range.


As such, the target asset allocation mix, as well as the weightings of the underlying investment options, are expected to change over time. The option will be actively monitored to ensure the appropriateness of each investment option.

 

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