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Morningstar, a trusted investment research and management company, reviews the nation’s 529 college savings programs annually. Once the analysis is complete, Morningstar then complies a ranking of the 529 plans in a report typically released each October.
Ohio’s 529 Plan is proud to announce that the CollegeAdvantage Direct 529 Plan retained its silver rating. Furthermore, Morningstar upgraded the CollegeAdvantage Advisor 529 Plan to a bronze ranking. This makes Ohio one of eight states that have both their Direct and Advisor 529 Plans placed in best-in-class investment options by Morningstar. The high ranking of both CollegeAdvantage 529 Plans highlights the strength of these two college savings plans as well as the industry’s regard for CollegeAdvantage as one of the top 529 plans in the nation.
“We believe we offer the very best college savings and investment opportunities in the country,” said Tim Gorrell, Executive Director for Ohio’s 529 Savings Program, “and for Morningstar, a highly regarded industry observer, to rate our plans so highly only promotes greater trust and confidence among our current and potential account holders.”
Silver- and bronze-rated plans mostly demonstrate industry best practices, according to the Morningstar report, by “offering some combination of the following attractive features: a strong set of underlying investments, a solid manager selection process, a well-researched asset-allocation approach, an appropriate set of investment options to meet investor needs, low fees, and strong oversight from the state and program manager. These features improve the odds that the plan will continue to represent a strong option for investors.”
According to the Morningstar analyst, CollegeAdvantage Direct “529 Savings Plan offers a variety of investment choices to suit a wide range of preferences, and fees are competitive. ... The wide-ranging lineup may also appeal to out-of-state college savers ... The Ohio Tuition Trust Authority continues to improve the plan on the margin…”
Morningstar upgraded CollegeAdvantage Advisor 529 Plan, administered by BlackRock. According to the analyst’s report, BlackRock “made a number of improvements during the last year. It cut fees meaningfully, with expenses for the age-based portfolios falling by 17 basis points on average. Moreover, in November 2017, the plan will restructure the age-based portfolios by moving from a stepped approach, which courts market-timing risk by making a number of large single-day asset-allocation shifts, to a progressive process that allows for a smoother transition to bonds from stocks. The plan’s rating increased to Bronze from Neutral in light of these changes.”
Morningstar considers five factors to determine the ranking of a 529 plan:
- Process — What investment options are offered? If there were recent asset allocation changes, did the program administrator hire a well-respected firm for their expertise?
- People — Who are the underlying fund managers and their expertise?
- Parent — How is strong is the oversight of the program manager?
- Performance — How are the investment options performing and does it set a strong precedence?
- Price — Are the offered investment options of value to the account owner and does the program offer low fees?
Ohio’s 529 Plans — Direct and Advisor — have met or exceeded Morningstar’ expectations on these components.
If you like to read more from this Morningstar report, follow this link. To do more research on CollegeAdvantage and the tax advantages it offers, please visit here. If you are ready start saving for your child’s future college costs in CollegeAdvantage Direct 529 plan, you can enroll online. CollegeAdvantage is your plan, you way.
Posted on October 26, 2017