Though the end goal is the same — to help pay for education — 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 are looking for an investment option customized for your student’s expected enrollment year, you might want to choose an Enrollment Year option. Or choose from any of the investment options for your account. You may change your investment choices up to twice per calendar year or upon a change in beneficiary.
Enrollment Year Investment Option
This investment option 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. And since not all students enroll in college upon turning 18 years of age, you select the Enrollment Year Investment Option that corresponds to your student’s expected future year of enrollment or one that best meets your specific investment objective.
Multi-Fund Investment Options
These investment options provide account owners with the opportunity to select an investment portfolio for its specific asset allocation. Each Multi-Fund Investment Option 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 Options do not change automatically as the student ages as they do in the Enrollment Year Investment Option.
Single-Fund Investment Options
These investment options 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 Option or the Multi-Fund Investment Options. 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 the specific single fund.
Principal Plus Interest Option (formerly Guaranteed Investment Option)
This investment option seeks to preserve capital and provide a stable return. The Principal Plus Interest Option 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.