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Columbus, OH – Oct. 27, 2017 – In a report released this week, Morningstar, Inc. the leading provider of independent investment research, has named Ohio’s CollegeAdvantage Direct 529 Savings Plan one of the top 529 plans in the country by awarding a “Silver” rating for the seventh consecutive year. Along with CollegeAdvantage Direct 529 Savings Plan’s silver rating the CollegeAdvantage Advisor 529 Plan received a “Bronze” rating. This makes Ohio one of only eight states that have both their Direct and Advisor 529 plans placed in the best-in-class by Morningstar.
“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.”
Each year Morningstar rates 529 college savings plan. The plans were rated based on the quality of the portfolio of investments options, investment options’ performance, skill of the options’ managers, stewardship practices of the 529 plan’s program manager and costs associates with the plan. In 2012, Morningstar changed its rating system to use a “Five Pillar System” similar to the way it ranks mutual funds.
- People: Are the managers and researcher directing the plan’s investments skilled and well-supported?
- Process: Are the age-based options based on solid research and implanted well? Are the strategies sensible and past successes likely to be repeated?
- Parent: Is the program manager a good caretaker of college saver’s capital? Is the state managing the plan professionally?
- Performance: Has the plan delivered strong risk-adjusted performance, and will it continue?
- Price: Are the investment options a good value, and do state tax benefits defray costs?
Ohio’s 529 Plans — Direct and Advisor — have met or exceeded Morningstar’ expectations on these components. The rating system groups 529 plans as Gold, Silver, Bronze, Neutral, or Negative.
CollegeAdvantage’s Silver rating, according to Morningstar, indicates a plan with many industry best practices. This year, Morningstar rated 84 529 college savings plans. According to Morningstar…” CollegeAdvantage Direct 529 Plan offers a variety of investment choices to suit a wide range of preference, and fees are competitive and the 2018 state tax deduction increase to $4,000 from $2,000 makes the plan even more attractive for Ohioans. The wide-ranging lineup may also appeal to out-of-state college savers.”
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.”
About the Ohio Tuition Trust Authority/CollegeAdvantage: CollegeAdvantage is Ohio’s 529 college savings program, offered and administered by the Ohio Tuition Trust Authority, a state agency under the Office of the Chancellor of the Ohio Department of Higher Education. Ohio is the sixth largest state sponsor of 529 plan in the country. CollegeAdvantage is offered as the CollegeAdvantage Direct 529 Savings Plan and the CollegeAdvantage Advisor 529 Saving Plan, which is offered and marketed through BlackRock and sold through professional financial advisors.The CollegeAdvantage program, which offers families a tax-advantaged way to save for college, has more than $10.88 billion in assets under management and over 633,056 total accounts as of Sept. 30, 2017. To learn more, visit www.CollegeAdvantage.com.
Judy Cunningham, PR Manager
Ohio Tuition Trust Authority
Posted on November 1, 2017