<p>Any of you savvy investors familiar with this investment option? It looks kind of wonderful ~ 7 percent growth but the prospectus says it entails some risk. The portfolio is 75% bonds and 25% i-bonds. Don’t know if their municipal or corporate - I’m not very financially knowledgeable. Thinking of shifting our 529 funds from the conservative age band fund which have not LOST money this year but not gained.</p>
<p>Can you provide a link for the fund?</p>
<p>I think the risks are because it has bonds. Bond prices flutuate. How does it guarantee 7%?</p>
<p>I can’t find anything from TIAA-CREF called a 529 Fixed Growth Fund. In the mutual fund world, “Fixed Growth” is something of an oxymoron: “Fixed” is a bond word, and “Growth” an equity word. Are you sure you’re reading it right?</p>
<p>Also, 7% is a pretty big yield from a bond fund these days. You can bet there’s some risk built into that. What are “i-bonds”?</p>
<p>(They aren’t – or shouldn’t be – municipal bonds in there, since the 529 plan itself is not taxable. So the last thing you would want to do would be to accept the lower yield on tax-exempt bonds in your fund. And 7% on municipal bonds? That would be really, really risky.)</p>
<p>i-bonds - Inflation Indexed Bonds?</p>
<p>Mammall, did you mean 100% Fixed Income Option? This is the information I found on the Michigan website:</p>
<p>100% Fixed Income Option
MESP allocates your contributions, together with any return on your contributions, under this Investment Option between the TIAA-CREF Institutional Bond Fund and the TIAA-CREF Institutional Inflation-Linked Bond Fund. </p>
<p>Because of a variety of risks associated with fixed income investments, this Investment Option may be considered by Account Owners who are willing and able to accept some volatility in returns in order to pursue a long-term rate of return potentially higher than that offered through less volatile investments. Though this Investment Option may not be appropriate as a single investment option for some Account Owners, it can provide a useful means by which to obtain incremental exposure to fixed income markets as part of an overall college savings strategy. It may also serve as a useful complement to investments in other Investment Options offered by MESP.</p>
<p>[Investment</a> Options | MESP Michigan Education Savings Plan](<a href=“http://www.misaves.com/ourplan/invest_options.html]Investment”>http://www.misaves.com/ourplan/invest_options.html)</p>
<p>Are you talking about the TIAA-CREF Independent 529 Plan? This differs from the state plans, it is actually a pre-paid tuition plan.</p>
<p>TIAA-CREF also operates 529 plans thru the following states: CT, GA, KY, MI, MN, MS, OK, TN, VT.</p>
<p>Just did a quick look at all the plans, (found links on [TIAA-CREF</a> - Retirement planning for those in the academic, medical, cultural & research fields.](<a href=“http://www.tiaa-cref.org%5DTIAA-CREF”>http://www.tiaa-cref.org)) and none of them offers an investment option called Fixed Growth.</p>
<p>You said your kids’ plan didn’t lose money but didn’t make any either. That’s not always a bad thing, especially in today’s volatile market. We kept our kids in age-based 529’s and I think it’s the best thing, it adjusts the risk downward as their time to enter college gets closer.</p>
<p>I-bonds are Inflation Linked Bonds, they are issued by the federal gov’t but are not municipal bonds.</p>
<p>7% growth must be the portfolio’s past performance. They wouldn’t be guaranteeing future performance.</p>
<p>Mezzomom - thanks so much for posting the link to the actual fund. As you can see, I’m lousy when it comes to managing finances (don’t even get then names of the funds right!). Our 529 is in the Michigan plan and the conservative age band fund has done pretty well but stopped growing this year, neglibible loss. I just can’t help noticing the relatively strong growth going on in the fixed income fund - but JHS is probably right, too good to be very safe for students about to start college.</p>
<p>That’s the nice thing about age-banded funds. Takes the thinking away from those of us who don’t want to have to think about it, by adjusting itself appropriately as the children get closer to college.</p>
<p>^ Yes - guess I’ll just leave the funds where they are - but that fixed income option does look tempting.</p>