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AL CollegeCounts 529 Fund |
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State Provider: Alabama; Net Assets ($mil):
$631.9 as of
10-31-09 |
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Alabama's Higher Education 529 Fund has a few desirable characteristics, especially for state residents, but not enough to tip the scales in its favor. On the plus side, in-state investors can now deduct up to $5,000 in plan contributions from Alabama state income tax. Residents can also avoid the plan's state administration and distribution fees by investing directly in its cheaper S-shares. Finally, the plan's sizable number of individual fund offerings, along with static and age-based options, give investors a good deal of flexibility. But there's still plenty of room for improvement. To begin with, non-residents must purchase shares through a broker and invest in A-, B, or C-shares and pay a corresponding sales charge. And the A-share options aren't cheap, ranging from a reasonable 0.95% to a steep 1.82%. In terms of underlying investments, the plan's equity options are decent, but the its bond fund line-up leaves much to be desired. The limited-duration bond fund, which represents half of the short-term income static portfolio, lost a gut-wrenching 15% in 2008, putting it behind more than 90% of short-term bond funds for the year. A final knock against the plan is a less-than-ideal age-based setup that lumps together beneficiaries from newborn to eight in one age-band. Overall, we don't think the good outweighs the bad here.(Information as of 03/24/2009) |
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| Availability: Sales Channel |
Resident: Both
Non-Resident: Broker
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| Annual State Tax Deduction |
| Max Investment/Beneficiary |
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$300,000 |
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(includes appreciation)
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| Mos. to Qualified Withdrawal |
| Aggressive, Conservative, 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: 128 |
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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 |
0.00
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0.35 |
| 529 Plan Avg |
0.8 |
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| Portfolio Expense Ratio Range |
| Fee to Change Beneficiary |
| Share Classes: Sales Charge |
| A:
2.25 – 5.75% (front-load) |
| B:
2 – 5% (deferred-load) |
| C:
1% (deferred-load) |
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| Initial Purchase |
$1,000 |
$250 |
| Additional Purchase |
25 |
25 |
| Initial (AIP) |
25 |
25 |
| Additional (AIP) |
25 |
25 |
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