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Morningstar Releases Analyst Ratings for 62 of the Largest 529 Plans as Assets Cross the $400 Billion Threshold for the First Time
Morningstar analysts upgraded four plans, downgraded seven, and initiated coverage on one plan in 2021 CHICAGO, Oct. 26, 2021 /PRNewswire/ -- Morningstar,
About this update from Morningstar, Inc.
[{"type":"text","content":"Morningstar analysts upgraded four plans, downgraded seven, and initiated coverage on one plan in 2021\n\n\nCHICAGO, Oct. 26, 2021 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced Morningstar Analyst Ratings™ (Analyst Ratings) for 62 of the nation's largest 529 plans, investment accounts that offer tax benefits when used to pay for qualified education expenses such as college. These 62 plans represent approximately 97% of 529 plan assets, which total more than $437 billion as of Aug. 31, 2021. The qualitative Analyst Rating has five tiers—Gold, Silver, Bronze, Neutral, and Negative. This year, Morningstar manager research analysts awarded three Gold ratings, 11 Silver ratings, 18 Bronze ratings, 23 Neutral ratings, and seven Negative ratings to 529 plans.\n\"The industry standard for 529 plans continues to rise as plans make enhancements, which should drive better outcomes for education savers over the long haul,\" said Adam Millson, manager research analyst on Morningstar's multi-asset and alternative strategies team. \"Therefore, it has made it harder for some plans to keep up with structural flaws like uncompetitive fees, outdated glide paths, or subpar oversight of the plan—a factor that is especially important when changes are being implemented.\"\nToday, Morningstar published a Fund Spy article on Morningstar.com, with a full list of the ratings and key insights from this year's assessment. Highlights include:\nNotable upgrades include Georgia's Path2College 529 Plan which analysts upgraded to Silver rating from Neutral. The plan underwent a major revamp over the last 18 months, moving their age-based options to a progressive glide path, smoothing the transition of allocations from stocks to bonds. Georgia also drove cost reductions during contract negotiations, resulting in an average cost of approximately 0.09% for the enrollment portfolios, the lowest of any 529 plan under Morningstar analyst coverage. Downgrades include Virginia Invest529, a Gold-rated plan just two years ago. This year, analysts downgraded the plan to Bronze from Silver after the departure of Virginia's in-house investment director, Michael Nguyen, in September 2021. The shift to progressive glide paths continues to pick up steam. Utah's Gold-rated plan, my529, migrated to a progr...