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AR GIFT College Investing Plan |
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State Provider: Arkansas; Net Assets ($mil):
$167.2 as of
10-31-09 |
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Arkansas' GIFT College Investing Plan has plenty of appealing features, and one lackluster one, too. On the plus side, Natural State residents can deduct up to $5,000 in contributions from annual state income taxes. (Married couples filing jointly can deduct up to $10,000.) The underlying investment options are solid index funds from Vanguard, and investors have reasonable flexibility in constructing their portfolios. As an added incentive, Arkansas offers a gift-matching program, up to a $500 grant per year, for residents under certain income levels. Arkansas will match dollar for dollar the contributions by residents earning less than $60,000 in annual gross income. For those earning less than $30,000, Arkansas will match every dollar with two. It's on the important question of expenses, unfortunately, that this otherwise stellar plan trips up. Morningstar research show that expenses are one of the best predictors of future returns, and this plan erodes much of the advantage of the cheap underlying Vanguard index funds by charging 0.75% for investment services, state administration, and management. All told, the in-state benefits of this plan will appeal to some, but we'd encourage investors to shop around.(Information as of 03/31/2009) |
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| Availability: Sales Channel |
Resident: Both
Non-Resident: Broker
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| Annual State Tax Deduction |
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Up to $5,000 (S),
10,000 (J)
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| Max Investment/Beneficiary |
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$366,000 |
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(includes appreciation)
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| Mos. to Qualified Withdrawal |
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Public, Private & International
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| Age-Based Aggressive, Age-Based Conservative, Age-Based Moderate |
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Age-Based Portfolios
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| Static Portfolios |
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| US Stock
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Bond |
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| Total International Funds: 9 |
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| Underlying Funds’ Ratings |
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| Overall Morningstar Rating |
# Equity
Funds |
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# Bond
Funds |
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| Ratings as of
10-31-09 |
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| Range |
0.85 |
| 529 Plan Avg |
0.8 |
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| Portfolio Expense Ratio Range |
| Fee to Change Beneficiary |
| Share Classes: Sales Charge |
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| Initial Purchase |
$25 |
$25 |
| Additional Purchase |
10 |
10 |
| Initial (AIP) |
10 |
10 |
| Additional (AIP) |
10 |
10 |
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