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Age-Based Options Hold 69% Of 529 Plan Assets

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NU Online News Service, April 14, 2005, 4:50 p.m. EDT

Assets in 529 college savings plans increased to $52 billion at the end of the third quarter of 2004, up from $40 billion a year earlier.[@@]

The College Savings Foundation, Washington, has published the latest asset total in a report based on data from Financial Research Corp., Boston.

FRC bases its 529 plan statistics on survey responses from companies that collect about 35% of 529 plan assets.

Professionally managed “age-based portfolios” of mutual funds, or portfolios that shift toward more conservative investments as participants age, held 69% of 529 plan assets, and fixed-income portfolios held 25% of assets, according to FRC researchers.

Plan owners have invested only 6.5% of the plan assets in individual mutual funds, but individual fund portfolios experienced the percentage gain in assets in 2004. Assets in individual fund portfolios increased 46%, and assets in age-based portfolios increased 35%.

About 73% of 529 accounts had balances under $10,000, and about 62% of the 529 plan assets are in funds or portfolios with loads, according to the College Savings Foundation.


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