529 Plan FAQs: About the Portfolios and Investments
How do I choose my investments?
Fidelity offers a wide range of investment options for your 529 plan account.
To help you determine which option may be best for you, consider these two questions:
- Do I want a portfolio that’s managed for me, automatically becoming more conservatively invested as my child nears college age?
- Do I want to choose my own portfolios?
Age-Based Strategy: Fidelity offers three age-based investment options that adjust their asset allocations automatically, becoming more conservative as the beneficiary nears college age. These Age-Based Portfolios provide access to Fidelity Funds, Fidelity Index Funds, and Multi-Firm Funds.
Fidelity Funds: These are designed to generate returns that attempt to beat a major market index over the long term. These portfolios invest solely in Fidelity funds that are managed by dedicated portfolio managers who are making investment decisions backed by Fidelity's proprietary investment research.
Multi-Firm Funds: Like our Fidelity Fund Age-Based Portfolios, these are designed to generate returns that attempt to beat a major market index over the long term. While the funds themselves are managed by Fidelity and other firms, the way the investments are spread among different funds is managed by dedicated portfolio managers at Fidelity. This option provides an opportunity to diversify your funds across multiple fund companies.
Fidelity may use its proprietary asset allocation research to make active asset allocation decisions in the Age-Based portfolios that invest in Fidelity Funds and Multi-Firm Funds. Such active asset allocation decisions may better enable the portfolios to take advantage of short- to medium-term opportunities and market conditions.1
Fidelity Index Funds: These are designed to generate returns that closely mirror the performance of a major market index over the long term. These portfolios invest solely in Fidelity Index Funds, and are able to keep transaction costs and other expenses low because they are passively managed. This means that the securities currently held in the respective index determine your investments.
Custom Strategy: If you want to build your own investment mix, choose from four investment portfolios offered by Fidelity: Static, Individual Fund, Age-Based, and Bank Deposit.
Static Portfolios invest in several different funds managed by Fidelity and have an asset mix that doesn't change over time. You may choose between portfolios invested in Fidelity Funds or Fidelity Index Funds.
Individual Fund Portfolios invest in a single Fidelity Fund or Fidelity Index portfolio. Options include a mix of equity, fixed income, money market, and bank deposit portfolios.
Age-Based Portfolios are managed according to the approximate year the beneficiary is projected to enter college. Also the strategy for those who want a managed Aged-Based portfolio overall, these become more conservative over time.
The Bank Deposit Portfolio seeks preservation of principal and is designed for beneficiaries of any age. This portfolio is composed exclusively of a deposit in an FDIC-insured, interest-bearing account.2
See investment options for more information.
1. Although an active asset allocation strategy is designed to add value, there is no guarantee any value will be added, and the strategy may result in losses to the Portfolios. Please review a 529 plan fact kit for more information on Portfolio asset allocation.
2. Although the underlying deposits are eligible for FDIC insurance, subject to applicable federal deposit insurance limits, the units of the Bank Deposit Portfolio are not insured or guaranteed by the FDIC or any other government agency. You are responsible for monitoring the total amount of your assets on deposit at the depository bank, including amounts held directly at the depository bank. All such deposits held in the same ownership capacity at the depository bank are subject to aggregation and to the current FDIC insurance coverage limitation of $250,000. Please see a 529 Fact Kit for more details.
Can I change how my account is invested?
Yes, new deposits can be made into any of the portfolios available in the Fidelity-managed 529 plans. Many customers establish standing instructions, such as making all contributions to the same portfolios each period, to avoid providing new instructions with every deposit.
You may reallocate previously invested monies (contributions and earnings) once each calendar year and upon a change to the beneficiary. See investment options for more information.
To change instructions on current and future investments, update your account online or complete and mail the 529 College Savings Plan Investment Instructions (PDF).
Can I pick the investments for my account?
You choose the portfolios, but not the individual funds. The IRS does not allow a participant to have direct or indirect control over the investments in a 529 account. The 529 portfolios are invested in a combination of mutual funds. To see a list of the underlying mutual funds that make up each portfolio, visit the plan performance pages for each of the Fidelity-managed 529 plans: UNIQUE College Investing Plan (NH), Fidelity Arizona College Savings Plan, Delaware College Investment Plan, and U.Fund College Investing Plan (MA).
Who are the Fidelity 529 plan portfolio managers?
Andrew Dierdorf and Brett Sumsion are the co-managers of the UNIQUE Plan, the Fidelity Arizona Plan, the U.Fund Plan, and the Delaware Plan Portfolios.
Mr. Dierdorf is a portfolio manager in the Asset Allocation Group of Fidelity Management & Research Company (FMRCo), the investment advisor for Fidelity's family of mutual funds. Mr. Dierdorf currently co-manages the Fidelity Dynamic Strategies Fund, Fidelity Four-In-One Index Fund, Fidelity Income Replacement Funds, Fidelity-Managed 529 College Savings Plans, and Fidelity Freedom Index Funds.
Previously with Fidelity, Mr. Dierdorf was co-manager for the Fidelity ClearPath portfolios, lifecycle funds designed for Canadian investors, until May 2008. He began managing Fidelity-Managed 529 College Savings Plans in October 2007 and Fidelity Dynamic Strategies Fund since its inception in November 2007. He assumed responsibility for the Fidelity Four-In-One Index in January 2009 and both the Fidelity Freedom Index Funds and Fidelity Income Replacement Funds in June 2009. Prior to joining Fidelity in 2004, Mr. Dierdorf held various actuarial and investment positions at CIGNA.
Mr. Dierdorf is a Chartered Financial Analyst charterholder, a Fellow of the Society of Actuaries, and a member of the American Academy of Actuaries.
Brett Sumsion is a portfolio manager on the Target Date team within the Global Asset Allocation (GAA) group at Fidelity Investments. Fidelity Investments is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and other financial products and services to more than 20 million individuals, institutions and financial intermediaries.
In this role, Brett is responsible for co-managing Fidelity Freedom Funds, Fidelity Freedom K Funds, Fidelity Freedom Index Funds, Fidelity Advisor Freedom Funds, Fidelity VIP Freedom Funds, Fidelity VIP Investor Freedom Funds, Fidelity VIP Freedom Lifetime Funds, and Strategic Advisers Multi-Manager Target Date Funds. He also co-manages Fidelity Income Replacement Funds, Fidelity-managed 529 College Savings Plans, Pyramis Lifecycle Funds, Fidelity ClearPath Retirement Portfolios (Canada), ClearPath Lifecycle Solutions (Canada), and Fidelity Income Replacement Portfolios (Canada).
Prior to joining Fidelity in 2014, Brett held various positions at DuPont Capital Management, Inc., including that of managing director of asset allocation from 2008 to 2013 and portfolio manager from 2005 to 2008. Previously, Brett worked at Strategis Financial Group, Inc., where he was chief executive officer from 2004 to 2005 and vice president of asset allocation research from 2001 to 2004. He has been in the investments industry since 2001.
Brett earned his bachelor of arts degree in economics from Brigham Young University and his master of business administration degree in finance from The Wharton School at the University of Pennsylvania. He is also a Chartered Financial Analyst (CFA) charterholder.