529 Fixed Portfolio Continued
September 30th, 2005
Moderate or Balanced?
The objective of a moderate or balanced 529 portfolio is to provide long-term returns that have the potential to exceed the historical rate of tuition inflation.
Because this strategy seeks to balance risk and return, it is not expected to experience the more extreme highs and lows of an aggressive portfolio.
The moderate or balanced portfolio is suitable for those who are:
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Willing to bear some volatility in an effort to achieve higher, long-term returns, but prefer the majority of their assets to be invested in investments whose risks fall in between an aggressive and a conservative investment strategy.
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Concerned both with moderating the volatility of investments and achieving higher, long-term returns because they are both equally important. Therefore, willing to accept some volatility in the value of their investments in order to achieve moderate returns.
Conservative:
The objective of a conservative 529 portfolio is to provide stability and preservation of capital, although a conservative portfolio may or may not keep pace with the historical rate of tuition inflation.
A conservative portfolio seeks to avoid short-term declines in value, but it sacrifices the potential for the higher returns of an aggressive or moderate portfolio.
The conservative portfolio is suitable for those who are:
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Primarily concerned with protecting the value of their account.
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To reduce volatility, the account owner is willing to accept the lower, long-term returns provided by conservative investments.
Actively Managed?
Actively managed Large Cap Equity Funds try to outperform the stock market through specific stock selection.
Passively Managed?
Passively managed index funds seek to provide investment results that, before expenses, correspond to the total return of a broad stock market index such as the Standard & Poor’s 500 Composite Index (“S&P 500 Index”).
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