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. The MI 529 Advisor Plan has something for everyone. If you are working with a financial advisor, they can help you determine a portfolio strategy consistent with your goals and resources.
Age-Based Investment Portfolio
The age-based investment portfolio seeks 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.
Target Risk Investment Portfolios
The target risk portfolios are designed for Account Owners who prefer a fixed-risk diversified investment option rather than a risk level that changes as the Designated Beneficiary ages. The Capital Appreciation and Conservative Allocation Portfolios invest in multiple underlying funds. In fact, the Conservative Allocation Portfolio also invests in the Funding Agreement. Many advisors use target risk portfolios in conjunction with an age-based portfolio to dial up or down the account owner's risk profile.
Multi-Fund Investment Portfolio
This investment portfolio seeks to provide an investment portfolio for participants who prefer to select an investment portfolio for its specific asset allocation. 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.
Individual Fund Investment Portfolios
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 individual funds such as equity index, money market or social fund options.