Much as target-date funds are gaining traction in 401(k) plans, parents investing in 529 college savings plans are overwhelmingly preferring age-based funds that become more conservative as a child’s first year of college approaches, Investment News reports, citing speakers at the recent 529 Technical Conference.

About 75% of 529 plans now offer age-based options, said Marc Friedberg, a managing director with Wilshire Associates.

“We are strong believers in age-based options,” said John Heywood, principal of The Vanguard Group. “They are the predominant investment option for 529 plans now, and I think they still will be five years from now.”

Likewise, at Fidelity Investments, more than 70% of the $17 billion it manages in 529 plans are in age-based funds. “At the end of the day, age-based funds will lead the way,” said Fidelity Portfolio Manager Christopher Sharpe. “They are the appropriate place to be for investors in these plans.”

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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