Gold-rated plans embody most or all of these attributes, while Silver- and Bronze-rated plans sport some of these qualities but have room for improvement.Įighteen plans earned Neutral ratings. These plans offer investment options that we expect will collectively outperform and exhibit some combination of the following attractive features across the key pillars: a well-researched asset-allocation approach, a robust process for selecting underlying investments, an appropriate set of options to meet investor needs, strong oversight from the state and investment manager, and low fees. College savers can have confidence in medalist-rated plans. We identified 35 best-in-class offerings, recognizing these programs with Analyst Ratings of Gold, Silver, or Bronze. We also initiated coverage of three plans and ceased coverage of four. This year's review led to a number of ratings changes that included 12 upgrades and 15 downgrades. (In prior assessments, a fifth pillar was dedicated solely to performance, but that is now considered in tandem with the People, Process, and Parent Pillars, ensuring that performance analysis takes place as part of a broader assessment of those pillars.) Pillar-level research informs our holistic view of plans and results in the Analyst Rating for 529 plans, a five-tiered scale that, from highest to lowest conviction, includes three Morningstar Medalist designations (Gold, Silver, and Bronze), Neutral, and Negative. Under the enhanced methodology, we now organize our research around four key pillars: Process, People, Parent, and Price. This year, Morningstar analysts assigned ratings to 61 plans that captured 97% of the more than $363 billion invested in 529 plans as of Aug. This updated rubric reflects our understanding of what drives compelling outcomes for 529 plan participants and takes into account the broader industry's evolution and rising standards. This year is pivotal, as it marks the first methodology enhancement to the ratings that debuted eight years ago.
Each year, Morningstar's team of manager research analysts evaluates the 529 investment universe and assigns forward-looking, qualitative Morningstar Analyst Ratings for 529 college savings plans based on our assessment of their investment merits.
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