Glide Path Changes

A Smoother, More Gradual Glide Path in the Age-Based Options

On July 14, 2017, the number of age brackets in all age-based options was expanded to 10 brackets from seven. Starting with the new Age 7-9 bracket, many of the brackets for older beneficiaries contain a higher percentage of equities. More age brackets will produce a smoother transition from equities to fixed-income funds as the account beneficiary gets closer to college, while allowing a greater exposure to stocks over time. What’s more, smaller step-downs from equities to fixed-income allocations should reduce the potential loss in account value if the stock market experiences a downturn on the day when an age-based account qualifies for the next bracket. For more information, please see the Program Description.

 

Glide Path for Age-Based Aggressive Global and Domestic Options

 

Glide Path for Age-Based Moderate Option

 

Glide Path for Age-Based Conservative Option

*College Enrolled

 

Snapshots of Age-Based Option Changes (Effective July 14, 2017)

  • Age brackets increased from 7 to 10
  • Equities in 10 brackets instead of 6
  • College Enrolled trigger is eliminated
  • Vanguard Total International Bond Index Fund added
  • Vanguard Short-Term Bond Index Fund removed

  • Age brackets increased from 7 to 10
  • Equities in 10 brackets instead of 6
  • College Enrolled trigger is eliminated
  • Vanguard Short-Term Bond Index Fund removed

Allocation Table for Age-Based Moderate

  • Age brackets increased from 7 to 10
  • Equities in 8 brackets instead of 6
  • College Enrolled trigger is eliminated
  • Vanguard Total International Bond Index Fund added
  • Vanguard Short-Term Bond Index Fund removed

Allocation Table for Age-Based Conservative

  • Age brackets increased from 7 to 10
  • Equities in 6 brackets instead of 4
  • College Enrolled trigger is eliminated
  • Vanguard Total International Bond Index Fund added
  • Vanguard Short-Term Bond Index Fund removed

Assets in all predetermined age-based accounts automatically transitioned from their allocations in previous age brackets to the redesigned age brackets on July 14, 2017.

Revised Customized Age-Based Option

  • Age brackets increased from 7 to 10
  • College Enrolled trigger is eliminated
  • Vanguard High-Yield Corporate Fund added as an optional underlying investment
  • Vanguard FTSE Social Index Fund added as an optional underlying investment
  • Dimensional U.S. Sustainability Core 1 Portfolio added as an optional underlying investment

Assets in all customized age-based accounts automatically transitioned from their allocations in previous age brackets to the redesigned age brackets on July 14, 2017.

For example, the asset allocation for the previous Age 13-15 bracket is the same for the redesigned Age 13-14 bracket and the Age 15 bracket. No automatic change occurred in account asset allocation percentages or underlying funds.

You can get more information about the changes by reading the Program Description.

 

College Enrolled Trigger Is History

The Age 19+ or College Enrolled age bracket in each age-based option was redesigned to remove the College Enrolled trigger.

Previously, when an account owner withdrew funds to pay for the qualified higher education expenses of a middle or high school student enrolled in a college class, the account was automatically moved to the Age 19+ or College Enrolled bracket.

With the College Enrolled trigger removed, the account will remain in the age bracket corresponding to the beneficiary’s age and continue to move down the glide path designed for the account owner’s investment option.