In analyzing its second quarter 2004 figures, the not-for-profit lobbying group for college savings programs found that an overwhelming majority of 529 plans employ the savings style that gets more conservative as the saver nears college-age, known as age-based portfolios.
Almost exactly two-thirds, 66.2%, of the $16.04 billion worth of assets looked at in the survey employed the age-based strategy, while 25.8% followed a static strategy, according to
In addition, the foundation analyzed the asset allocation of 529 plans. The group took a smaller sampling size, just $6.5 billion, but discovered that a majority of the assets in those plans are in equities. In fact, 63.8% of these assets were either heavier on equities than fixed income or allocated equal amounts of money to stocks and bonds..
"The preponderance of equity-oriented portfolios is generally a positive phenomenon, as it reflects investor recognition that an appropriate exposure to equities plays a key role in an investment strategy geared toward meeting rising higher education costs," said Bill Burrow, the CSF Industry Data Committee chairman.
A previous survey by the CSF found that more than $43 billion was invested in 529 plans across the United States as of the end of the second quarter. The figure represented an increase of 66.9% from second quarter 2003.
