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IShares 529 Plan Expands Portfolio Lineup

Stocks in this article: BLK

BlackRock, Inc. (NYSE: BLK) announced today that its iShares exchange Traded Funds (ETFs) business, the world’s largest manager of ETFs 1, has added seven new ETF portfolio options to the iShares 529 Plan. The plan now features 28 investment options which financial advisors can use to build effective 529 portfolios for their clients.

“By expanding the iShares 529 Plan portfolio lineup, advisors have even more flexibility and diversity to build portfolios for today and the future, oriented to provide dividend income, fixed income yields and minimize portfolio volatility,” said Sue Thompson, Head of iShares Registered Investment Advisor/Asset Management Group at BlackRock. “These additions enhance the iShares 529 Plan, which has recently earned high marks from Morningstar.”

The new portfolio options added to the iShares 529 Plan include:

  • iShares High Dividend Equity Portfolio
  • iShares MSCI EAFE Minimum Volatility Portfolio
  • iShares MSCI Emerging Markets Minimum Volatility Portfolio
  • iShares MSCI ACWI ex US Portfolio
  • iShares Barclays 1-3 Year Credit Portfolio
  • iShares iBoxx $ Investment Grade Corporate Bond Portfolio
  • iShares iBoxx $ High Yield Corporate Bond Portfolio

“Arkansas knows that the right education can change the lives of entire families,” said Martha Shoffner, Arkansas’ State Treasurer and Chairwoman of the Arkansas Section 529 Plan Review Committee, which oversees the Arkansas College Savings Plans. “Unfortunately, the cost of college presents a major challenge for families at every income level. That’s why we do everything in our power to stay progressive in the area of saving for college, and we applaud the iShares 529 Plan for its commitment to constantly improving options for financial advisors and the families they serve.”

This announcement follows on news that the iShares 529 Plan earned a Silver Rating in Morningstar’s 2012 ranking of the nation’s 529 Plans, making it one of eight 529 plans (and one of only two advisor plans) to receive a Gold or Silver Rating from Morningstar. Morningstar’s annual 2012 survey rated 64 of the largest 529 plans based on forward-looking qualitative ratings designed to identify plans that are likely to outperform their peers on a risk-adjusted basis over a full market cycle. Of the 64 plans, four received Gold Ratings, four received Silver Ratings, and 19 received Bronze Ratings. 2

“Advisors who build custom portfolios have a lot to work with in this plan,” wrote Morningstar. “The age-based track is also well-constructed and one of the cheapest among advisor-sold plans. Some direct-sold plans have cheaper passive investments, but this is a strong choice in the advisor-sold crowd.” 3

About the Morningstar Ratings: Morningstar ratings for 529 plans consider five factors to arrive at the final rating, reflecting the quality of the entire plan, not a single investment:

  • People: Are the managers and researchers directing the plan's investments skilled and well-supported?
  • Process: Are the strategies sensible and are past successes likely to be repeated? Are the asset-allocation and fund selection for the age-based options based on solid research and implemented well?
  • Parent: Is the program manager a good caretaker of college savers' capital? Is the state managing the plan professionally?
  • Performance: Has the plan delivered strong risk-adjusted performance, and is it likely to continue?
  • Price: Are the investment options a good value? Do state tax benefits defray costs?

The Analyst Rating is not a market call, and it is not meant to replace investors' due-diligence process. It cannot assess whether a fund is the right fit for a particular portfolio and risk tolerance. It is intended to supplement investors' and advisors' own work on plans and, along with written analysis, provide forward-looking perspective into a fund's abilities. It picks up where commonly watched measures of the past leave off.

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