Start with a portfolio allocated according to a child's age. In the early years, the portfolio is principally invested in return-generating assets in an attempt to earn an equity-like risk premium. At six key points during the college savings years, the allocation changes, increasingly tilting toward a greater proportion of defensive assets. By the time the child nears college age, the asset allocation is predominantly in income-generating assets. This takes into account the need to preserve principle when wealth accumulation is at its highest levels. These portfolios are allocated according to models created by Allianz Global Investors U.S. LLC.
For more information on the Capital Appreciation and Capital Preservation Portfolios, visit the Static Investment Portfolios page.