Adds First of its Kind Passive Option to Track the Morningstar® 529 College Savings Moderate IndexSM Series
PROVIDENCE, RI - CollegeBoundfund, Rhode Island's tax-advantaged 529 college savings plan, announced that recently-approved investment line-up improvements are now available for Rhode Islanders to access. By increasing the selection of low-cost options, families now have more choices when planning for higher education.
"Launching these improvements so quickly continues my team's thorough process of providing Rhode Islanders with the best options when saving for college," said General Treasurer Gina M. Raimondo, who is personally invested in the plan with CollegeBoundfund accounts for her two young children. "It is never too early to start planning for college and no amount is too small to save."
Following program changes in 2011 that added new low-cost investment options, the State Investment Commission (SIC) approved several additional improvements to CollegeBoundfund in October 2013. By authorizing these improvements, the SIC sought to enhance the ease and effectiveness of saving with CollegeBoundfund.
Most notably, the program added a first-of-its-kind, age-based, low-cost suite of portfolios called the CollegeBoundfund Morningstar Age-Based Index Portfolios. These new funds are designed to track Morningstar's 529 College Savings Moderate Indexes, and leverage the asset allocation and index construction expertise of Morningstar to provide a mix of assets targeted to each saver's age. AllianceBernstein then builds the portfolios with index funds to keep costs low.
These new options are both cost-effective and are easy to use, and complement CollegeBoundfund's current offerings of low-cost single-asset index funds, actively managed funds, and actively managed age-based portfolios. AllianceBernstein is the plan's program manager.
CollegeBoundfund accounts can help students cover tuition and fees, books, equipment and supplies, and room and board at eligible educational institutions, including college, technical and graduate schools.
"By offering active and passive education strategies along with our individual fund selection, we have created one of the most comprehensive college savings plans in the country," said Vadim Zlotnikov, Co-Head of AllianceBernstein's Multi-Asset Solutions Group. "By being the first to add an option that tracks an age-based index series, CollegeBoundfund can now offer more flexibility in accessing risk-managed investment solutions at a lower cost."
"We are pleased that AllianceBernstein chose to use one of our 529 index series to create a new passive investment option for the CollegeBoundfund," said Sanjay Arya, head of Morningstar Indexes. "The Morningstar 529 College Savings Index Series is based on well-established asset allocation methodology and provides diversified asset-class exposure to global equities, bonds, Treasury Inflation Protected Securities, and cash."
In addition to the new age-based passive option, improvements have also been made to the underlying funds in the Active Age-Based and Fixed Allocation Portfolios, called Education Strategies. For advisors and college savers who prefer to choose individual funds, CollegeBoundfund's enhanced lineup includes new offerings, such as a bond inflation strategy to provide an important, inflation-sensitive fixed income component to the plan. Collegeboundfund is also removing several funds. Effective as of March 24, 2014, Collegeboundfund will automatically reallocate participant assets unless participants make their own investment change.
"CollegeBoundfund is already working well for so many Rhode Island families and these modifications will make the program better than ever with more options and more choices with the lowest costs," said Gail Mance-Rios, Acting Executive Director of The Rhode Island Higher Education Assistance Authority (RIHEAA). "Plus, the plan will continue to offer all the other great features and benefits for account holders, including the popular online gifting tool, a state tax deduction, the CollegeBoundbaby program and automatic contribution options."
For more information about these enhancements, visit collegeboundfund.com/ri, contact your financial representative or call an AllianceBernstein Client Service Representative at (888) 324-5057.
Morningstar® is a registered trademark of Morningstar, Inc. All indexes under the Morningstar® 529 College Savings Moderate IndexSM series are service marks of Morningstar, Inc. and have been licensed for certain purposes by AllianceBernstein L.P. Morningstar, Inc. does not sponsor, endorse, issue, sell or promote the CollegeBoundfund Morningstar Age-Based Index Portfolio, and makes no representation regarding the advisability of investing in it.