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IL Bright Start College Savings (AD |
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State Provider: Illinois; Net Assets ($mil):
$1,105.9 as of
10-31-09 |
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Illinois' Bright Start College Savings Program is on the mend, but we'd consider other options for now. Like its direct-sold sibling, this advisor-sold plan 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 Portfolio" A shares had a good deal of exposure to those troubled funds and fell 24.7% in 2008. And the plan's "Active Fixed Income Portfolio," which had 100% exposure to Oppenheimer's Core Plus bond fund, lost nearly 40% in 2008. The state and Oppenheimer were quick to react, but issues still remain. As of late January 2009, the three troubled fixed-income products are no longer offered, but the new choices aren't topnotch. Additionally, existing shareholder money is still invested in those poor Oppenheimer products. We hope the state moves that existing money into the fixed-income products now offered, but shareholders should consider moving their money to another plan instead of waiting in limbo. The plan also lacks flexibility with just one age-based option and no individual fund choices for those who want to create their own portfolio. On the positive side, the fees are reasonable and in-state investors can deduct up to $10,000 in contributions from their state income tax (up to $20,000 if filing jointly). Overall, however, the good doesn't outweigh the bad here. Investors should investigate other options. (Information as of 04/06/2009) |
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| Availability: Sales Channel |
Resident: Broker
Non-Resident: Broker
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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 |
| 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: 32 |
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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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0.25 |
| 529 Plan Avg |
0.8 |
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| Portfolio Expense Ratio Range |
| Fee to Change Beneficiary |
| Share Classes: Sales Charge |
| A:
3.5% (front-load) |
| A:
0.5% (deferred-load) |
| C:
0.5% (deferred-load) |
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| Initial Purchase |
$25 |
$25 |
| Additional Purchase |
15 |
15 |
| Initial (AIP) |
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— |
| Additional (AIP) |
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