Price-man­aged 529 col­lege sav­ings plan gets down­grade

Baltimore Sun - - BUSINESS MARYLAND - By Sarah Gantz sarah.gantz@balt­

The state col­lege sav­ings plan man­aged by T. Rowe Price Group has been down­graded by rat­ings agency Morn­ingstar Inc. from gold to sil­ver.

Morn­ingstar re­leased its an­a­lyst rat­ings Tues­day for 63 of the largest 529 col­lege sav­ings plans, the state- or ed­u­ca­tional in­sti­tu­tion-spon­sored plans de­signed to help set aside money for col­lege. The Mary­land Col­lege In­vest­ment Plan, which has about $4.5 bil­lion in as­sets, was one of six plans down­graded in Morn­ingstar’s 2016 report.

The Bal­ti­more money man­age­ment firm’s 529 plan in Alaska was also down­graded from gold to sil­ver.

While Morn­ingstar an­a­lysts no longer felt the plan de­served a gold rat­ing, “the truth is it’s still a re­ally good plan,” said Leo Ach­e­son, Morn­ingstar’s lead re­search an­a­lyst for 529 col­lege sav­ings plans.

Morn­ingstar uses a five-tier rat­ing sys­tem with three pos­i­tive lev­els — gold, sil­ver and bronze — plus neu­tral and neg­a­tive, to help fam­i­lies sav­ing for col­lege com­pare op­tions.

“We are pleased to see Morn­ingstar rec­og­nize our 529 plans as ‘among the best op­tions in the 529 space’ and proud to have re­ceived one of Morn­ingstar’s high­est rat­ings for the sev­enth year in a row,” said Tom Kazmier­czak, head of T. Rowe Price In­di­vid­ual In­vestors Prod­ucts & Ser­vices, in a state­ment.

Plans are eval­u­ated based on the de­sign of their in­vest­ment op­tions, their un­der­ly­ing money man­agers, how they are ad­min­is­tered by their par­ent firms, whether the in­vest­ments are a good value, and the plan’s risk-ad­justed per­for­mance.

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