Business
Morningstar Study of 61 of the Largest 529 College-Savings Plans Spurs Shakeup of Ratings with New Methodology Enhancements
Morningstar analysts upgraded 12 college-savings plans and downgraded 15 others as part of a methodology revamp new to this year's ratings CHICAGO, Oct. 27,
About this update from Morningstar, Inc.
[{"type":"text","content":"Morningstar analysts upgraded 12 college-savings plans and downgraded 15 others as part of a methodology revamp new to this year's ratings\n\n\nCHICAGO, Oct. 27, 2020 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced updates to the Morningstar Analyst Ratings™ for 61 of the nation's largest 529 college-savings plans, which represent approximately 97% of the more than $363 billion in 529 plan assets as of Aug. 30, 2020. The qualitative Analyst Rating has five tiers—Gold, Silver, Bronze, Neutral, and Negative. This year, Morningstar manager research analysts awarded three Gold ratings, 10 Silver ratings, 22 Bronze ratings, 18 Neutral ratings, and eight Negative ratings to 529 college-savings plans. \n\"The college-savings plan industry is maturing. Asset growth is slowing, and 529 plans are increasingly having to cut costs to stay competitive,\" said Madeline Hume, manager research analyst on Morningstar's multi-asset and alternative strategies team. \"Investment quality has improved, and a number of plans have enhanced their asset-allocation approach to smooth the transition from stocks to bonds over time. These trends should continue to benefit investors.\"\n\"We also enhanced our ratings methodology, placing greater weight on our Price assessment. Consequently, we downgraded the ratings of numerous advisor-sold plans that tend to charge higher fees. On the flipside, we upgraded the ratings of various direct-sold plans that charge lower fees,\" said Hume.\nIn 2020, Morningstar analysts upgraded 12 plans and downgraded 15 plans. Morningstar also initiated coverage on three plans, while ceasing coverage on four:\nUpgrades(Distribution Channel)\nState\nCurrent MorningstarAnalyst Rating\nPrevious MorningstarAnalyst Rating\nMichigan Education Savings Program (Direct)\nMI\nGold\nSilver\nMOST Missouri's 529 Education Plan (Direct)\nMO\nSilver\nBronze\nOregon College Savings Plan (Direct)\nOR\nSilver\nBronze\nPennsylvania 529 Investment Plan (Direct)\nPA\nSilver\nBronze\nCollegeInvest Direct Portfolio (Direct)\nCO\nBronze\nNeutral\nIDeal - Idaho College Savings Program (Direct)\nID\nBronze\nNeutral\nNational College Savings Program (Direct)\nNC\nBronze\nNeutral\nNEST Direct College Savings Plan (Direct)\nNE\nBronze\nNeutral\nOklahoma College Savings Plan (Direct)\nOK...