Selecting an investment portfolio may seem overwhelming for some. However, the LoneStar 529 Plan offers a number of investment options and strategies that you can tailor to align with your risk tolerance, time horizon and financial situation.
The
Plan:
The LoneStar 529 Plan, which is a 529 Plan.
offers a wide range of portfolios with
Underlying Investments:
One or more mutual funds or other investment vehicles in which assets of a portfolio are invested.
managed by Artisan, Baird, DFA, Dodge & Cox, Eaton Vance, Federated Hermes, Neuberger Berman, New York Life, PIMCO, T. Rowe Price, and Vanguard. You can choose from among the Plan’s Target Enrollment Year Options, Risk-based and Individual Asset Class Options, or a combination of each.
Should your goals or needs change, you have the flexibility to rebalance your
Account:
A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries.
or allocate future contributions to different portfolios. Under current federal regulations,
Account Owner:
The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity.
are allowed to change the allocation of existing assets twice per calendar year or whenever you name a new
Beneficiary:
The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established.
You and your advisor select one of the following ten
Target Enrollment Year Portfolios:
An investment vehicle that invests based on the year your Beneficiary is expected to begin using the funds for qualified education expenses (i.e., enrollment year). The asset allocation between equities, bonds, and cash automatically adjusts every six months as the enrollment year approaches, providing a consistent risk reduction path for investments along the way.
based on several factors, such as when you expect your
Beneficiary:
The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established.
to need the funds, your risk tolerance and investment outlook. Once a portfolio is selected, your investments will stay in that portfolio until it is transferred to the Enrolled Years Portfolio or if you chose to make a new investment election to move it to another portfolio, whichever is earlier. You can choose to invest in one or any combination of these portfolios as well as the Risk-based and Individual Asset Class portfolios.
Hover over a pie chart below for details. The center of the chart shows
Asset Allocation:
A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including equity, fixed income, and money market.
2040-2041 Portfolio
Currently invests primarily in equity and seeks capital growth within the portfolio.
2038-2039 Portfolio
Also currently invests primarily in equity and seeks capital growth within the portfolio.
2036-2037 Portfolio
Currently invests in a blended allocation of equity and fixed income, yet is still more heavily weighted toward equity investments seeking to capture further capital growth opportunities.
2034-2035 Portfolio
Currently invests in a blended allocation of equity and fixed income and seeks moderate capital growth and income.
2032-2033 Portfolio
Currently invests in an allocation tilted toward equity over fixed income.
2030-2031 Portfolio
Currently invests in a blended allocation of equity and fixed income with a heavier weight toward fixed income seeking to shift the investment focus more heavily toward capital preservation and income.
2028-2029 Portfolio
Currently invests in a blended allocation of equity and fixed income with a heavier weight toward fixed income.
2026-2027 Portfolio
Currently invests in a blended allocation of equity and fixed income with a heavy weight toward fixed income, as well as the inclusion of stable value seeking to provide additional income.
2024-2025 Portfolio
Currently invests primarily in fixed income, with the inclusion of some equity and some stable value. This portfolio seeks capital preservation and income.
Enrolled Years Portfolio
This is the last
Target Enrollment Year Portfolios:
An investment vehicle that invests based on the year your Beneficiary is expected to begin using the funds for qualified education expenses (i.e., enrollment year). The asset allocation between equities, bonds, and cash automatically adjusts every six months as the enrollment year approaches, providing a consistent risk reduction path for investments along the way.
This portfolio assumes that your
Beneficiary:
The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established.
is enrolled in school and seeks to preserve capital and provide income to support withdrawals from the
Account:
A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries.
.
1. Investments in the New York Life Guaranteed Interest Account are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
The
Risk-based Portfolios:
Investment vehicles featuring the flexibility to choose from among several investment options that may align with your tolerance for risk, your time horizon, and other factors.
offer you the ability to choose investment options based on your risk tolerance. You can choose to invest in one or any combination of these portfolios as well as the
:
and Individual Asset Class portfolios.
Hover over a pie chart below for details. The center of the chart shows
Asset Allocation:
A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including equity, fixed income, and money market.
Aggressive Allocation
Seeks long-term capital growth by investing in an
Asset Allocation:
A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including equity, fixed income, and money market.
weighted heavily toward equity investments versus fixed income investments.
Balanced Allocation
Seeks moderate growth by investing in a balanced
Asset Allocation:
A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including equity, fixed income, and money market.
somewhat weighted toward equity investments over fixed income investments.
Conservative Allocation
Seeks conservative growth by investing primarily in fixed income, with the inclusion of some equity and some stable value.
1. Investments in the New York Life Guaranteed Interest Account are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
Individual Asset Class portfolios allow you to create your own portfolio allocation by selecting from among select asset classes. You can also invest in any number of Individual Asset Class Portfolios alongside other investment in
Target Enrollment Year Portfolios:
An investment vehicle that invests based on the year your Beneficiary is expected to begin using the funds for qualified education expenses (i.e., enrollment year). The asset allocation between equities, bonds, and cash automatically adjusts every six months as the enrollment year approaches, providing a consistent risk reduction path for investments along the way.
or
Risk-based Portfolios:
Investment vehicles featuring the flexibility to choose from among several investment options that may align with your tolerance for risk, your time horizon, and other factors.
Hover over a pie chart below for details. The center of the chart shows
Asset Allocation:
A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including equity, fixed income, and money market.
Diversified Equity Portfolio
Seeks long‑term capital appreciation by investing its assets in equity investments.
Diversified Fixed Income Portfolio
Seeks low volatility and income from a diversified selection of fixed income investments.
U.S. Value Portfolio
Allocation – 100% Artisan Value Fund (APHLX)
Seeks long-term capital growth through value equity investments, which are those companies that are cash-producing and in strong financial condition, while selling at discounted prices to their expected intrinsic value.
U.S Growth Portfolio
Allocation – 100% T. Rowe Price Large Cap Growth (TRLGX)
Seeks long-term capital growth through growth equity investments, which are those companies with above-average expectations for earnings and cash flow growth.
U.S. Total Stock Market Portfolio
Allocation – 100% Vanguard Total Stock Market Index (VSMPX)
Seeks long-term capital growth through equity investments by tracking the returns of the U.S.
stock market.
Small-Cap Portfolio
Allocation – 100% DFA US Small Cap Portfolio (DFSTX)
Seeks long-term capital growth by investing in smaller companies, or those with low market capitalizations.
Active International Portfolio
Allocation – 100% Dodge & Cox International Stock (DODFX)
Seeks long-term capital growth and income by investing at least 80% of its assets in non-U.S. company equities.
Passive International Portfolio
Allocation – 100% Vanguard Total International Stock Market (VTPSX)
Seeks long-term capital growth through equity investments of developed and emerging non-U.S. companies.
Seeks to provide inflation protection and earn current income consistent with inflation‑protected securities.
Short-Term Fixed Income Portfolio
Allocation – 100% Baird Short-Term Bond (BSBIX)
Seeks to provide a total return, net of fees, greater than the Bloomberg Barclays 1-3 Year U.S. Government/Credit Bond Index.
Socially Responsible Portfolio
Allocation – Vanguard FTSE Social Index (VFTAX)
Seeks capital growth while investing in large-and-midcapitalization stocks that meet certain environmental, social, and corporate governance (ESG) criteria.
Commodity Portfolio
Allocation – 100% PIMCO Commodity Real Return (PCRIX)
Seeks to capture performance potential of commodities through derivative exposure to the broad-based Bloomberg Commodity Index.
Real Estate Portfolio
Allocation – 100% Vanguard Real Estate Index (VGSLX)
Seeks to provide total return and diversification from stocks and bonds by investing in Real Estate Investment Trusts (REITs).
Capital Preservation Portfolio
Allocation – 100% New York Life Guaranteed Interest
Seeks to provide a stable flow of current income. The current investment selected for this portfolio is the New York Life Guaranteed Interest Account.
1. Investments in the New York Life Guaranteed Interest Account are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
The portfolios and their
Underlying Investments:
One or more mutual funds or other investment vehicles in which assets of a portfolio are invested.
involve investment risks that are described in the Plan Description. For example, prices of small- and mid-cap stocks often fluctuate more than large-company stocks. There are special risks inherent to international investing, including currency, political, social, and economic risks. Emerging market stocks are generally riskier than stocks in developing countries. Fixed income investing entails interest rate, credit, and inflation risks. Investments in specific industries or sections, such as real estate, have industry concentration risk.
The performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s units, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted.
Performance data for each portfolio are based on the total return of a hypothetical account, net of the LoneStar 529 Plan program and administration fees.
Portfolio returns for periods less than 1 year are cumulative and are not annualized.
1. Expense ratios for each of the portfolios include underlying investment expenses and plan fees.
2. Although there are no investment expenses associated with the Capital Preservation Portfolio, the yield of the underlying investment, New York Life GIA (“GIA”) is reduced by 0.10% to compensate New York Life for operating, administrative, and marketing costs. This will reduce the return of the portfolios that invest in the GIA. The interest rate (Crediting Rate) for the GIA resets every six months on January 1 and July 1. The Net Crediting Rate for the GIA is currently 3.80%.
1. Expense ratios for each of the portfolios include underlying investment expenses and plan fees.
2. Although there are no investment expenses associated with the Capital Preservation Portfolio, the yield of the underlying investment, New York Life GIA (“GIA”) is reduced by 0.10% to compensate New York Life for operating, administrative, and marketing costs. This will reduce the return of the portfolios that invest in the GIA. The interest rate (Crediting Rate) for the GIA resets every six months on January 1 and July 1. The Net Crediting Rate for the GIA is currently 3.80%.
