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Morningstar, a trusted investment research and management company, reviews the nation’s 62 529 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 pleased to announce that the CollegeAdvantage Direct 529 Plan retained its silver rating. In addition, BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan retained its bronze ranking. This makes Ohio one of only four state programs that have both their Direct and Advisor 529 Plans ranked as medal class investment options by Morningstar. The high ranking for both CollegeAdvantage 529 Plans highlights the strength of these two college savings plans as well as the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.
According to the 2019 Morningstar report, “College savers invested in a medalist-rated plan have made a fine choice. These plans generally follow industry best practices, offering a combination of the following attractive features: a well-researched asset-allocation approach, a robust process for selecting underlying investments, an appropriate set of options to meet investor needs, strong oversight from the state and investment manager, and low fees. These features increase the likelihood that a plan will remain a strong pick for college savers.”
According to Bobby Blue, an analysist for Morningstar, “With a strong investment lineup, competitive costs, and prudent state oversight, the Ohio CollegeAdvantage 529 Savings Plan provides a compelling option to both Buckeyes and out of state residents alike. The plan retains its Morningstar Analyst Rating of Silver.”
Blue continues, “The Ohio Tuition Trust Authority, the independent body that oversees the plan, provides commendable oversight. It has pushed for lower fee products in the age-based portfolios in order to pass savings onto investors. It also continues to improve the plan on the margins …”
For the BlackRock CollegeAdvantage 529 Plan, Blue says, “A strong underlying lineup and relatively attractive fees versus advisor-sold peers drives BlackRock CollegeAdvantage 529 Plan’s Morning Star Analyst Rating of Bronze.”
According to Morningstar, these are the five pillars that determine the ranking of a 529 plan:
Process — Did the plan hire an experienced asset allocator to design a thoughtful, well-diversified glide path for age-based portfolios? What suite of investment options are offered?
People — What is Morningstar’s assessment of the underlying money managers’ talent, tenure, and resources?
Parent — Are the program manager ad investment manager good caretakers of college savings capital? Is the state managing the plan professionally?
Performance — Have the plan’s options earned their keep with solid risk-adjusted returns over relevant time periods?
Price — Are the investment options a good value?
Ohio’s 529 Plans — Direct and Advisor — have met or exceeded Morningstar’ expectations on these components. In addition, the Ohio Direct 529 Plan is one of only three plans in the country to attain a positive ranking in all five of Morningstar’s pillars.
Other honors for Ohio’s 529 Plan
If you looked at other unbiased 529 plan informational websites, you have discovered how well regarded Ohio’s 529 Plan, CollegeAdvantage, is within the college savings industry. Savingforcollege.com is a trusted and independent college-savings industry resource. In its most recent quarterly analysis of 529 plan investment performances, Ohio’s 529 Plan has topped three out of four of the long-term performance charts.
49 states and the District of Columbia offer 529 plans. As of June 30, 2019, CollegeAdvantage Direct 529 Plan ranks first in the nation for the best investment performance in three different categories: one-year, five-year, and ten-year. Ohio’s 529 Plan was also ranked fifth nationwide for the best performance in the three-year category.
Savingforcollege.com consistently recognizes Ohio’s Direct 529 Plan as one of the best plans in the nation for both Ohio residents and non-Ohio residents by giving the program a 5-Cap Rating. This designation is dependent on criteria that shows the college savings plan “offers outstanding flexibility, attractive investment, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.”
Ohio’s Direct 529 Plan is the only 529 college savings plans nationwide to earn a 5-Cap rating for both residents and non-residents, as of Oct. 24, 2019. Ohio’s Direct 529 Saving Plan has received this recognition multiple times for the plan’s attractiveness for Ohioans and across the nation.
Other honors include being named CollegeAdvantage as the best-rated 529 plan in the nation by Real Wealth Network. According to Bankrate, Ohio's 529 Plan is at the top of the list for the five best 529 plans in the country. Money expert and New York Times best-selling author Clark Howard has placed Ohio’s 529 Plan on his Dean’s List as one of the very best 529 plans nationwide. Only 529 plans that have management fees less than 0.20% annually were named to the Dean’s List.
Additionally, Business Insider ranked CollegeAdvantage as the third best college savings plan in the nation. Bezinga, a website that offers financial insight, has named Ohio’s 529 Plan, CollegeAdvantage, as best for performance of the nation’s college savings plans.
Kiplinger has recognized Ohio’s 529 Plan as having best age-based portfolio for conservative investors. Kiplinger drew special attention to two of Ohio’s 529 Plan individual investment options: Vanguard Wellington and Vanguard High-Yield Corporate.
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. Someday your child is going to college. Someday starts with CollegeAdvantage.com.
Posted on October 30, 2019