my529 earns Morningstar Gold for ninth straight year
Morningstar released its annual report on 529 plans in late October, naming my529 as one of four plans to earn the Morningstar Analyst Rating™ of Gold. Analysts cited my529’s investment options, low fees and state oversight as evidence my529 will serve investors well over the long term. my529 is the third-largest direct-sold plan in the nation. View the report here.
my529 has received the Morningstar Gold rating for nine years in a row.
In a separate plan breakdown, Morningstar analysts highlighted the high level of choice afforded to investors with my529’s 13 investment options, as well as the “mix of proven strategies” in the customized investment options. The report also emphasized the plan’s enhancements to principal preservation, the strength of underlying investments from Vanguard and Dimensional and consistent fee reductions.
Morningstar noted the recent change in my529 leadership, as former executive director Lynne Ward departed in early October, but described the new executive director Richard Ellis an “experienced financial steward.” Ellis, my529’s senior director for compliance, finance and investments since 2015, previously served as Utah state treasurer for two terms.
“A Morningstar Gold rating is a great accomplishment for our team,” Ellis said. “It recognizes the hard work everyone at my529 puts in to provide a high-quality, low-cost savings plan. It’s an honor to lead my529 and continue our commitment to excellence.”
Morningstar said that the Gold-rated plans follow industry best practices, offer robust investment options and low fees, and satisfy residents and nonresidents.
my529 was rated “Gold” or its equivalent by Morningstar 2004-2007, 2009, and 2011-2019; rated “Silver” or its equivalent in 2008 and 2010. The Morningstar Analyst Rating™ for 529 college savings plans is not a credit or risk rating. To determine an analyst rating, Morningstar’s analysts consider five factors: the plan’s strategy and investment process; the plan’s risk-adjusted performance; an assessment of the individuals managing the plan’s investment options (people); the stewardship practices of the plan’s administration and parent firm (together, parent); and whether the plan’s investment options are a good value proposition compared to its peers (price). Plans are then assigned forward-looking ratings of “Gold,” “Silver,” “Bronze,” “Neutral,” and “Negative.” The top three ratings (Gold, Silver, and Bronze) indicate that Morningstar’s analysts think highly of a 529 plan; the differences correspond to the level of analyst conviction in the ability of a plan’s investment options to collectively outperform their respective benchmarks and peers through time, within the context of the level of risk taken. Morningstar does not rate all 529s every year; it rated just 62 of 92 plans in 2019.
Analyst ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst ratings are based on Morningstar analysts’ current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar’s expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its analyst ratings to be guarantees.
Please visit Morningstar.com for more information about the analyst ratings, as well as other Morningstar ratings and fund rankings.