Morningstar Updates Analyst Ratings for 529 College-Savings Plans; Identifies 29 Medalists, Two Negative-Rated Plans

CHICAGO, Oct. 20, 2015 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced new Analyst Ratings and reports for 63 of the nation's largest 529 college-savings plans. The plans together represent more than 90 percent of the more than $200 billion in 529 plan assets as of Sept. 30, 2015. Morningstar has identified 29 plans that are likely to outperform their peers on a risk-adjusted basis over a market cycle of at least five years.

The five-tiered, qualitative Morningstar Analyst Rating™ scale has three positive levels—Gold, Silver, and Bronze—in addition to Neutral and Negative ratings. The three positive ratings indicate Morningstar Medalists. This year, Morningstar manager research analysts awarded four Gold ratings, seven Silver ratings, 18 Bronze ratings, 32 Neutral ratings, and two Negative ratings to 529 college-savings plans. To view the full list of Analyst Ratings for the 63 plans and other featured content about saving for college, please visit http://www.morningstar.com/goto/529-2015.

Compared with 2014, Morningstar analysts upgraded five plans and downgraded one plan:

"Overall, the 529 savings plan industry remains on solid footing," Leo Acheson, Morningstar's lead research analyst for 529 college-savings plans, said. "Many states have partnered with asset managers that are strong stewards of capital, and a number of states have hired an investment consultant to provide an additional layer of oversight. In addition, fees continue to come down. Of the five plans that were upgraded this year, three meaningfully reduced fees."

529 plans receiving a Morningstar Analyst Rating of Gold incorporate the industry's best practices and contain investment choices that are highly regarded by Morningstar analysts. Overall, these plans stand out as best of breed for their ability to help college savers meet their goals. Plans receiving Silver or Bronze ratings are also viewed positively by Morningstar analysts, have notable advantages, and are likely to outperform their peers. A Neutral rating indicates plans that are not likely to deliver standout returns, but are also unlikely to significantly underperform. On the other end of the scale, a Negative rating indicates at least one major flaw within a plan that is likely to significantly hinder future performance, in Morningstar's view.

The Morningstar Analyst Rating for 529 plans gives investors saving for a child's college education a tool to help comprehensively assess 529 plan options. To determine a plan's rating, Morningstar analysts consider five factors: the plan's strategy and investment process; an assessment of the plan's underlying investment managers; the stewardship practices of the plan's administration and parent firm; whether the plan's investment options are a good value proposition compared with those of its peers; and the plan's risk-adjusted performance. Morningstar also takes into consideration unique benefits that a plan offers to college savers, including local tax breaks, grants, and scholarships.

Morningstar will host a webinar to discuss this year's ratings at 11 a.m. CT on Nov. 3, 2015; to attend, please register here. Visit http://global.morningstar.com/529Methodology for a fact sheet with more information about the Analyst Rating scale for 529 plans. In May, Morningstar published a study about best practices of U.S. 529 college-savings plans, a companion piece to the ratings.

Morningstar has also published "Choosing a 529 Investment," an investor's guide that outlines considerations for selecting a 529 plan, including tax benefits, age-based or static portfolios, asset allocation, active or passive management, and fees. The guide includes information about specific 529 plans more advantageous to in-state investors and those with nationwide appeal.

Individual investors who subscribe to Morningstar.com may use the site's interactive 529 Plan Center to view the Morningstar Analyst Ratings for 529 college-savings plans, accompanying analysis, and data on the plans' investment options. The research and ratings are also available in Morningstar® Advisor Workstation^SM, Morningstar Office^SM, and Morningstar Direct^SM, the company's core investment research and analysis platforms. Morningstar® ByAllAccounts^SM aggregates data from more than 70 529 college-savings plans and delivers it to portfolio accounting platforms. Morningstar also offers a family of 529 college-savings plan indexes. More information is available at http://global.morningstar.com.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement and management as of June 30, 2015. The company has operations in 27 countries.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar analysts' current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar's expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its Analyst Ratings to be guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; any mention of a specific 529 college-savings plan should not be considered a solicitation by Morningstar.

©2015 Morningstar, Inc. All Rights Reserved.

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Media Contact:
Nadine Youssef, +1 312 696-6601 or [email protected]

SOURCE Morningstar, Inc.

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