Though the end goal is the same — to help pay for college — everyone’s investment strategy may not be the same and can even differ greatly based on unique circumstances, financial constraints, timelines, and overall college savings goals. If you are looking for an investment portfolio customized for your student’s expected enrollment year, you might want to choose an Enrollment Year Investment Portfolio. Or choose from any of the investment portfolios for your account. Once contributions are made to your college savings account, you may change your investment choices for those contributions up to twice per calendar year or upon a change in beneficiary.
Enrollment Year Investment Portfolios
An Enrollment Year Investment Portfolio bases its investment mix on the date the student is projected to need the money to pay for his or her qualified education expenses. The risk level automatically shifts from aggressive to conservative as the enrollment year approaches. Since not all students enroll in college upon turning 18 years of age, or you may be saving for K-12 tuition expense, you select the Enrollment Year Investment Portfolio that corresponds to your student’s expected future year of enrollment or one that best meets your specific investment objective.
Multi-Fund Investment Portfolios
These investment portfolios provide account owners with the opportunity to select an investment portfolio for its specific asset allocation. Each Multi-Fund Investment Portfolio is allocated to multiple underlying funds and/or a funding agreement and has a different investment objective and investment strategy. The allocations in the Multi-Fund Investment Portfolios do not change automatically as the beneficiary ages as they do in the Enrollment Year Investment Portfolio.
Single Fund Investment Portfolios
These investment portfolios are each invested solely in shares of a single underlying fund. Since their performance is entirely reliant on the performance of that underlying fund, they may be more volatile than the Enrollment Year Investment Portfolios or the Multi-Fund Investment Portfolios. You should be aware that participants do not own shares of the underlying funds directly. These college savings plan portfolios may be good for people who are interested in the specific single fund.
Principal Plus Interest Investment Portfolio
The Principal Plus Interest Portfolio seeks to preserve capital and provide a stable return. This portfolio may be good for individuals with a lower risk tolerance or a shorter timeframe to save.
The investment portfolios are subject to the risks of the underlying funds including the loss of principal.