Scholars Choice 529 Plan Announces Investment Changes
Investment changes take advantage of investment capabilities at Legg Mason
and other investment managers
NEW YORK, Sept. 11 /PRNewswire-FirstCall/ -- Scholars Choice, the adviser-sold 529 college savings plan managed for the State of Colorado by a Legg Mason subsidiary (NYSE: LM), today announced changes to its investment options' mix of underlying fund investments. Legg Mason is replacing several underlying funds in which the program's investment portfolios are invested with new underlying funds, managed by Legg Mason's investment management subsidiaries and an unaffiliated manager with experience across a broad number of asset classes. Legg Mason acquired the asset management businesses of Citigroup, whose subsidiary managed the program, on December 1, 2005(1). The Scholars Choice College savings program has nearly $2 billion in assets under management as of June 30, 2006 and is the eighth largest college savings plan in the country(2). The plan has selected five funds from Legg Mason's investment management subsidiaries, including the Legg Mason Value Trust Fund, managed by Bill Miller of Legg Mason Capital Management; the Legg Mason Partners Aggressive Growth Fund(3), managed by Richie Freeman of ClearBridge Advisors(4); The Royce Pennsylvania Mutual Fund, managed by Chuck Royce of Royce & Co., the Legg Mason International Equity Trust, managed by Charlie Lovejoy of Batterymarch Financial Management, and the Western Asset Core Plus Bond Portfolio, managed by a Western Asset Portfolio Management team. The plan will also add the John Hancock Classic Value Fund, managed by Pzena Investment Management, an advisor that is not affiliated with Legg Mason. "As part of Legg Mason, we are able to offer investors expanded capabilities from a number of Legg Mason's investment management subsidiaries, as well as new options from well-regarded outside managers. Each of the new investment advisors has a long-term track record in their particular investment style, which spans the spectrum of equity asset classes, growth and value styles, and fixed income investing," said Steven Bleiberg, Global Head of Asset Allocation for the 529 Plans managed by Legg Mason affiliates. "We have always worked with the State of Colorado to enhance over time our offerings to families that are saving for their children's education. As we are now part of a much larger diversified asset management firm, we are pleased to be able to leverage our new parent company in this important relationship," said Bleiberg. "We are proud to have built a well-regarded program in partnership with the former Citigroup Asset Management and now with Legg Mason. We are constantly seeking to innovate and to enhance the program's investment offerings," said Debra Demuth, Director of CollegeInvest. In February 2006, investment research firm Morningstar, Inc. named Scholars Choice one of the nation's best 529 plans available through advisors for the second consecutive year(5). The Scholars Choice College Savings Plan offers a range of investment options including automatic allocations, and selected allocations, managed by CAM North America, a Legg Mason affiliated company. These options are exclusively available through investment advisors. As a 529 plan, Scholars Choice offers important tax benefits to help families save and pay for college expenses. By investing in Scholars Choice, you'll be able to take advantage of tax-deferred growth, federal income tax- free withdrawals if used to pay for qualified college expenses, and other benefits (non-qualified withdrawals are subject to taxes and penalties. (Restrictions apply). Legg Mason is a global asset management firm, structured as a holding company, with on-the-ground asset management capabilities around the world. As of June 30, 2006, its assets under management aggregated approximately $855 billion. The firm is headquartered in Baltimore, Maryland, and its common stock in listed on the New York Stock Exchange (symbol: LM). Consider the investment objectives, risks, charges and expenses before investing. The program disclosure statement, at www.scholars-choice.com contains more information that should be read carefully before investing. If you or your beneficiary are not Colorado taxpayers, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides state tax and other benefits only available to investments in that plan. Mutual Funds are sold through prospectus only. No offer is made hereunder or pursuant to the Program of any of the funds discussed in this press release. An investor in the Scholars Choice does not have a direct beneficial interest in these funds. Additional fees for the 529 plans will apply. Investments are not guaranteed by the State of Colorado, CollegeInvest, CAM North America LLC, Legg Mason Investor Services, LLC, or Legg Mason Inc or any of its affiliates. Scholars Choice(R) is a registered service mark of Legg Mason Investor Services, LLC. CollegeInvest and the CollegeInvest logo are registered trademarks. Administered and issued by CollegeInvest. CAM North America LLC (CAM NA), Investment Manager, is part of ClearBridge Advisors, a Legg Mason affiliated business unit comprised of various investment advisors, including CAM NA and other affiliated advisor entities. Legg Mason Investor Services, LLC, a Legg Mason affiliate, is the primary distributor of interest in the Program. (1) Citigroup, Inc. sold substantially all of its worldwide asset management business, Citigroup Asset Management, to Legg Mason, Inc. on 12/1/2005. As a part of this transaction, CAM North America, LLC became a wholly-owned subsidiary of Legg Mason and replaced Citigroup Global Markets Inc. as the investment manager for the Scholars Choice. (2) Source: Financial Research Corporation (FRC) as of 6/30/06 (3) Prior to April 7, 2006, the fund was known as the Smith Barney Aggressive Growth Fund. The fund's portfolio manager, investment objective and strategy were not changed. (4) Investment management services are provided by CAM North America LLC, a part of ClearBridge Advisors, a Legg Mason affiliated business unit comprised of various investment units, including CAM North American LLC and other affiliated advisor entities. (5) An analysis prepared and based on the opinions and judgments of Morningstar, an independent investment research company. Morningstar analysts evaluated 529 College Savings Plans-26 broker-sold plans and 63 direct-sold plans. Morningstar evaluated each plan and its underlying investments based on the following factors as of 12/31/05: costs, quality of underlying investments, portfolio construction and asset allocation, flexibility of investment options, and the investment managers' record of treating shareholders well. For each plan and its underlying investments that were evaluated, Morningstar assigned a relative grade (e.g., good, average, poor) for each factor. By analyzing and combining the factor grades, the Morningstar analysts determined what they thought were the "best" and "worst" 529 plans. Out of the 26 broker sold plans evaluated by Morningstar, Colorado's Scholars Choice Plan was identified as being among the top three broker-sold plans (the "best" list). (Source: Morningstar FundInvestor, February 2006.) On September 8, 2006, the Scholars Choice program underwent some changes in underlying fund options, benchmarks and allocations. The annual Morningstar rating cited here is as of 12/31/05, and therefore does not reflect the impact of these changes. Morningstar has not evaluated the program since. Results may differ from those provided here.RELATED LINKS
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