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IL Bright Start College Savings |
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State Provider: Illinois; Net Assets ($mil):
$1,194.3 as of
10-31-09 |
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Illinois' Bright Start College Savings Program is on the road to recovery. This direct-sold plan, managed by Oppenheimer, had a good deal of exposure to some of the bond world's worst offenders in 2008. In particular, the plan had assets in Oppenheimer Core Plus Fixed Income, a fund that sustained steep losses in 2008 due to management's big bets on illiquid securities. The plan also had exposure to Oppenheimer U.S. Government Trust and Limited-Term Government (run by the same management team), which didn't fall as hard in absolute terms but significantly lagged their respective peers in 2008. As a result, those troubled funds wreaked havoc on shareholder assets. For instance, the plan's "Active Age-Based 15-17 Years Portfolio" had a good deal of exposure to those troubled funds and fell 22% in 2008. And the plan's "Active Fixed Income Portfolio," which had 100% exposure to Oppenheimer's Core Plus bond fund, lost more than a third of its value in 2008. But the state and Oppenheimer were quick to react. In January 2009, all three troubled fixed-income products were replaced with solid options from Vanguard and American Century. We think this was a wise, timely move. Existing shareholder money, however, is still invested in those troubled Oppenheimer products. We hope the state moves that existing money into the better fixed-income products now offered, but shareholders should consider moving their money to another plan instead of waiting in limbo. For newcomers, this plan still holds appeal. The plan's fees range from a reasonable 0.48% to 0.68% for its "Blended Portfolio" (a mixture of active and passive strategies) to a rock-bottom 0.22% for the plan's unchanged "Index Portfolios," which are still the cheapest nationally available Vanguard-centric options in existence. Adding to the plan's appeal, in-state residents can deduct up to $10,000 in contributions from their state income tax (up to $20,000 if filing jointly). In all, we still think this plan offers investors plenty of reasons to invest here. (Information as of 04/06/2009) |
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| Availability: Sales Channel |
Resident: Both
Non-Resident: Both
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| Annual State Tax Deduction |
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Up to $10,000 (S),
20,000 (J)
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| Max Investment/Beneficiary |
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$320,000 |
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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 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: 8 |
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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 |
0.14
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0.62 |
| 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 |
15 |
15 |
| Initial (AIP) |
— |
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| Additional (AIP) |
— |
— |
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