iShares 529 Plan Expands Portfolio Lineup
BlackRock, Inc. (NYSE: BLK) announced today that its iShares exchange Traded Funds (ETFs) business, the world's largest manager of ETFs1, 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.
About the iShares 529 Plan: The iShares 529 Plan, offered only through advisors, is a nationally available college savings plan, sponsored by the State of Arkansas, which allows families to save and invest funds for higher education in a tax-advantaged account. It is available through financial advisors, and was the first all-ETF 529 plan when launched. With Exchange Traded Funds at its core, the iShares 529 Plan broke ground in the 529 plan arena by featuring attractive benefits, including low costs and transparency. The iShares 529 Plan has grown steadily since it was first introduced, with iShares 529 Plan assets under management doubling every year since inception4. With an average asset-based fee per portfolio of 59 bps, the iShares 529 Plan is one of the lowest cost 529 plans in the marketplace5. Arkansas offers a state income tax deduction of up to $5,000 a year ($10,000 for married couples) to families who contribute to an Arkansas-sponsored 529 Plan account.6 For more information about the iShares 529 Plan, please visit www.ishares529.com.
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At September 30, 2012, BlackRock's AUM was $3.673 trillion. BlackRock offers products that span the risk spectrum to meet clients' needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of September 30, 2012, the firm has approximately 10,400 employees in 29 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com.
About iShares: iShares is the global product leader in exchange traded funds with over 600 funds globally across equities, fixed income and commodities, which trade on 20 exchanges worldwide. The iShares Funds are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.
For more information about the iShares 529 Plan, contact your financial advisor, call 1-888-529-9552 or visit www.ishares529.com to obtain a Program Description and Participation Agreement which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing or sending money. Upromise Investments, Inc. Co-Distributor and Underwriter; BlackRock Investments, LLC, Co-Distributor.
If you are not an Arkansas taxpayer, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.
The iShares 529 Plan is a college tuition savings program sponsored by the State of Arkansas and is administered by The Arkansas 529 Plan Review Committee (Committee). Upromise Investments, Inc. (UII), and Upromise Investment Advisors, LLC (UIA), serve as the Program Manager and Recordkeeping and Servicing Agent, respectively, with overall responsibility for the day-to-day operations, including marketing and co-distribution of the iShares 529 Plan. BlackRock Investments, LLC, also has responsibility for co-distribution of the iShares 529 Plan. BlackRock Institutional Trust Company, N.A., serves as Investment Manager of the iShares 529 Plan except for the Savings Portfolio, which is managed by Sallie Mae Bank. The iShares 529 Plan's Portfolios invest in either (i) exchange traded funds; or (ii) a Federal Deposit Insurance Corporation (FDIC)-insured omnibus savings account held in trust by the Committee at Sallie Mae Bank. Upromise, Inc., UII, UIA and Sallie Mae Bank are affiliates. Units of the Portfolios are municipal securities, are not exchange traded funds, and the value of units will vary with market conditions.
Investment returns will vary depending on the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, you could lose all or a portion of your money by investing in the iShares 529 Plan, depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.
The Aggregate balance of all 529 Plan accounts sponsored by the State of Arkansas for the same designated beneficiary may not exceed $366,000.
A periodic plan of regular investment cannot assure a profit or protect against a loss in a declining market.
Neither BlackRock, Inc., and its affiliates nor Upromise and its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
Neither the iShares 529 Plan nor the underlying iShares Funds are sponsored, endorsed, issued, sold or promoted by Markit Indices Limited or MSCI Inc., nor are they sponsored, endorsed or issued by Barclays Capital Inc. None of these companies make any representation regarding the advisability of investing in the Portfolios or their Underlying Investments. Neither Upromise nor BlackRock, Inc., or any of their affiliates are affiliated with the companies listed above.
BlackRock Institutional Trust Company, N.A., and BlackRock Investments, LLC, are subsidiaries of BlackRock, Inc., none of which is affiliated with Upromise.
© 2012 BlackRock, Inc. Upromise and the Upromise logo are registered servicemarks of Upromise, Inc. iShares® and BlackRock® are registered trademarks of BlackRock, Inc., or its subsidiaries. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
* Not FDIC Insured (except for the Savings Portfolio) * No Bank, State or Federal Guarantee * May Lose Value
1 BlackRock ETP Landscape Report, September 30, 2012
2 The universe of 64 plans represents the largest 529 plans. Morningstar did not rate 22 of the industry's smallest plans. A Gold Rating signals that Morningstar has the highest conviction in the plan's ability to serve college savers well over the long term. A Silver Rating indicates that the plans exhibited many industry best practices, though Morningstar has less conviction in their future success. A Bronze Rating indicates that a plan is likely to outperform the typical 529 plan but is not as strong as the plans with Gold or Silver Ratings. Past performance is no guarantee of future results.
3 iShares 529 Plan Analysis, Morningstar 529 Plan Center, October 13, 2012
4 Source: BlackRock, December 31, 2011
5 Source: Financial Research Corporation, September 30, 2012
6 Contributions to the Plan in a tax year are deductible from Arkansas state income tax, subject to recapture in subsequent years in which non-qualified withdrawals or a rollover out to another state's 529 plan is made.