Uncertain what some investment terms mean? Find explanations of key terms here.
The process of apportioning underlying investments to correspond to a specific investment option.
A fee assessed daily against the total funds in an account. The fee is expressed as a percentage of the account value. For example, a fee of 0.100% would be $1.00 per $1,000 invested annually.
The Asset-Based fee has two parts:
- The Administrative Asset Fee is charged against the account balance by my529 to fund its operations.
- The Underlying Fund Expense is charged against the underlying investments that make up the investment option selected for an account.
- Underlying Fund Expenses are charged by Vanguard, Dimensional and Pacific Investment Management Company LLC (PIMCO).
Customized Investment Option
An investment option where the account owner designs their asset allocation from the underlying funds offered through my529.
Two types of Customized investment options are available:
- Customized Age-Based
- Customized Static
Enrollment Date Investment Option
Enrollment Date options take into consideration the target year the account beneficiary will begin taking withdrawals to pay for qualified education expenses. Over time, the options gradually shift to a more conservative investment allocation as the target enrollment year draws closer. Investment allocations automatically adjust over time and are rebalanced quarterly based on a preset schedule.
Federal Deposit Insurance Corporation (FDIC)
The FDIC insures checking, savings, and other types of deposit accounts held at banks and certain other financial institutions. The FDIC does not insure securities, mutual funds, or other similar investments.
A predetermined blend of underlying investments designed by my529 for account owners. my529 offers 20 investment options to account owners.
Investment Option Change
A change from one investment option to another. An investment option change can be made twice per calendar year for the same beneficiary, according to Internal Revenue Service (IRS) rules.
Net Asset Value (NAV)
NAV represents the daily price of a unit of an investment option and is calculated after the close of market trading on each business day (normally 4 p.m. ET). It is derived from the daily value of underlying investments in an investment option and the daily accrual of asset-based fees.
For Enrollment Date and Customized age-based investment options, reallocation is the process of moving money between underlying investment target asset allocations.
The process of bringing an account’s underlying investments back to a target asset allocation.
Static Investment Option
An investment option that maintains the same underlying investment allocation.
Target Asset Allocation
The target percentage of stocks, bonds, and/or principal preservation funds that make up an investment option.
Underlying Fund Expense
An asset-based fee of an underlying investment charged by Vanguard, Dimensional and PIMCO.
Ownership interests in investment options issued by the my529 trust. Account owners do not own shares of the underlying investments.
Enrollment Date options