Morningstar Updates Analyst Ratings for 62 of the Nation's Largest 529 College-Savings Plans; Assigns Nine Upgrades, Eight Downgrades

CHICAGO, Oct. 22, 2019 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced updates to Morningstar Analyst Ratings^TM and reports for 62 of the nation's largest 529 college-savings plans, which represent approximately 97 percent of the more than $319 billion in 529 plan assets as of Sept. 30, 2019. The five-tiered, qualitative Morningstar Analyst Rating™ scale has three positive levels—Gold, Silver, and Bronze—in addition to Neutral and Negative ratings. This year, Morningstar manager research analysts awarded four Gold ratings, 13 Silver ratings, 13 Bronze ratings, 27 Neutral ratings, and five Negative ratings to 529 college-savings plans. The full list is available here.

"The 529 industry continues to improve, with lower-cost college-savings plans and higher-quality investment lineups increasingly becoming the norm. Additionally, more plans have introduced progressive glide paths in age-based portfolios that smooth the transition from stocks to bonds over time, like California's ScholarShare College Savings Plan, which we upgraded to Gold from Silver after it adopted a progressive glide path," said Madeline Hume, manager research analyst on Morningstar's multi-asset and alternative strategies team. "However, some 529 plans have remained static in light of these trends, causing them to fall behind. For instance, we downgraded Nevada's The Vanguard Plan, which has been a Gold-rated plan since 2012, to Silver this year because it hasn't lowered fees like other Vanguard-managed plans, reducing its fee advantage for investors."

In 2019, Morningstar analysts upgraded nine plans and downgraded eight plans:

The 30 plans that earned Gold, Silver, or Bronze ratings are considered Morningstar Medalists, which are likely to offer the best investment experiences for college savers. A Neutral rating indicates plans that may have appealing aspects but have room for improvement, and a Negative rating indicates at least one major flaw within a plan, 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 assess five factors: the design of the plan's investment options; the plan's underlying money managers; the stewardship practices of the plan's program manager and state overseer; the value of the plan's investment options compared with those of its peers; and the plan's risk-adjusted performance.

In May 2019, Morningstar published its latest 529 Landscape Report, which examines key industry developments and improvements. The report also covers 529 industry best practices, trends including industry growth and recent expansions of tax benefits, and reviews new Morningstar Categories for 529 plan age-based portfolios that launched in April 2019.

Individual investors who are Premium Members of 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 50 529 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://www.morningstar.com/company.

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, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with about $220 billion in assets under advisement and management as of June 30, 2019. The company has operations in 27 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar's Manager Research Group's current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund's or separately managed account's underlying securities' creditworthiness. This press release is for informational purposes only; references to securities or a separately managed account investment strategy in this press release should not be considered an offer or solicitation to buy or sell the securities or to invest in accordance with that strategy.

©2019 Morningstar, Inc. All Rights Reserved.

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Rebecca Rogalski, +1 312 244-7771 or [email protected]

SOURCE Morningstar, Inc.

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