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 savings goals. If you have a longer timeframe to save and grow your money, you might want to choose an age-based option that is a simple, all-in-one option. If you’re an experienced investor, you might choose a multi-fund option you’ll review and change periodically. If your child’s nearing college and you’ve been saving for a while, a principal protected investment might be the best choice.
Age-Based Portfolio Options
The age-based investment portfolios seek to match the investment objective and level of risk to the investment time horizon by taking into account the beneficiary’s current age and the number of years before the beneficiary turns 18 or is expected to start college. The risk level automatically shifts from aggressive to conservative as the beneficiary ages. This option is good for people who want a simple, all-in-one option.
Guaranteed Portfolio Option
This investment portfolio seeks to preserve capital and provide a stable return. This option may be good for shorter timeframes to save and for individuals who have lower risk tolerance.
Multi-Fund Portfolio Options
These investment portfolios seek to provide investment portfolios for participants who prefer 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 Age-Based Investment Portfolios.
Single-Fund Portfolio Options
These investment portfolios are each invested solely in either shares of a single Underlying Fund or a Funding Agreement. For those investment portfolios invested in an Underlying Fund, their performance is entirely reliant on the performance of that Underlying Fund and may be more volatile than the age-based investment portfolios or the multi-fund investment portfolios. You should be aware that participants do not own shares of the underlying funds directly. This option may be good for people who are interested in specific single funds such as equity index, money market or social fund options.