Investment Options

Building a Section 529 account that is right for you takes planning. The Minnesota College Savings Plan offers you a choice of seven investment options. These options vary in their investment strategy and degree of risk, allowing you to select an option or combination of options that may fit your needs.

For more information on the risks involved in investing in such investment options, and the type of investor for whom each investment option may be appropriate, read the Disclosure Booklet (PDF).

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Investment Options


Managed Allocation Option

(Risk level shifts from Aggressive to Conservative)

This investment option seeks to match up the investment objective and level of risk to the investment horizon by taking into account the beneficiary's current age and the number of years before the beneficiary turns 18 and is expected to enter college. Depending on the beneficiary's age, allocations to this option will be placed in one of six age bands, each of which has a different investment objective and investment strategy. The age bands for younger beneficiaries seek a favorable long-term return by investing primarily in mutual funds invested in equity or real estate-related securities, each of which has a high level of risk, but greater potential for returns than more conservative investments. As a beneficiary nears college age, the age bands allocate less to mutual funds invested in equity and real estate-related securities and allocate more to mutual funds invested in fixed-income and money market securities to preserve capital.

Effective as of June 18, 2013, each Age Band will increase the allocation of its assets to Mutual Funds that are managed to track a particular index and will proportionately decrease the allocation of its assets to actively managed Mutual Funds. In addition, each Age Band will increase the allocation of its assets to Mutual Funds that focus on investment in the equity securities of foreign/emerging market issuers or in instruments with economic characteristics similar to "emerging market securities" and will proportionately decrease the allocation of its assets to Mutual Funds that focus on investment in the equity securities of domestic issuers.

As the beneficiary ages, assets in your account attributable to this option are moved from one age band to the next on the first "rolling date" following the beneficiary's fourth, eighth, twelfth, fifteenth and eighteenth birthdays. The rolling dates are March 20, June 20, September 20 and December 20 (or the first business day thereafter).


Age 0-3: 72.00% Equities; 8.00% Real Estate; 15.00% Core Bond Funds; 5.00% Inflation-Linked Bond Funds; 0.00% Money Market; 0.00% Short-Term Bonds Age 4-7: 58.50% Equities; 6.50% Real Estate; 26.25% Core Bond Funds; 8.75% Inflation-Linked Bond Funds; 0.00% Money Market; 0.00% Short-Term Bonds Age 8-11: 45.00% Equities; 5.00% Real Estate; 37.50% Core Bond Funds; 12.50% Inflation-Linked Bond Funds; 0.00% Money Market; 0.00% Short-Term Bonds
 
Age 12-14: 36.00% Equities; 4.00% Real Estate; 45.00% Core Bond Funds; 15.00% Inflation-Linked Bond Funds; 0.00% Money Market; 0.00% Short-Term Bonds Age 15-17: 22.50% Equities; 2.50% Real Estate; 33.75% Core Bond Funds; 11.25% Inflation-Linked Bond Funds; 12.00% Money Market; 18.00% Short-Term Bonds Age 18+: 13.50% Equities; 1.50% Real Estate; 26.25% Core Bond Funds, 8.75% Inflation-Linked Bond Funds; 30.00% Money Market; 20.00% Short-Term Bonds

Allocations for all investments are as of June 18, 2013. Allocations are reviewed and adjusted periodically.


International Equity Index Option

(Risk level - Aggressive)

International Equity Index: 80.00% International Equity Index; 20.00% Emerging Markets Equity Index

Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly through capital appreciation.

Investment Strategy. Each of the mutual funds in which this Investment Option invests is considered an “index fund,” meaning that the mutual fund attempts to track a benchmark index. The percentage of the Investment Option’s assets allocated to each mutual fund is:

TIAA-CREF International Equity Index Fund — 80.00%
TIAA-CREF Emerging Markets Equity Index Fund — 20.00%

Each of the mutual funds above invests primarily in the equity securities of foreign issuers. Through its investments in these mutual funds, the Investment Option intends to indirectly allocate:

  • approximately 80% of its assets to equity securities of foreign issuers located in developed countries; and
  • approximately 20% of its assets to equity securities of issuers located in emerging markets countries.

Investment Risks. Through its investments in mutual funds, this Investment Option is subject to Emerging Markets Risk, Foreign Investment Risk, Index Risk, Issuer Risk, Large-Cap Risk, Market Risk and Mid-Cap Risk.


100% Equity Option

100% Equity: 80.00% U.S. Equity; 25.00% International Developed Markets; 5.00% Emerging Markets; 10.00% Real Estate Funds

(Risk level - Aggressive)

This investment option seeks to provide a favorable long-term total return, mainly from capital appreciation, by allocating primarily to mutual funds invested in a blend of equity index securities and real estate-related securities. Because of the high exposure to domestic and foreign equities, and the corresponding high degree of risk, this option may be appropriate for you if you already have substantial college savings from less volatile investments (e.g., fixed-income) or you have a long investment horizon and you can tolerate a higher level of risk.

Allocations for all investments are as of June 18, 2013. Allocations are reviewed and adjusted periodically.


Balanced Option

Balanced: 54% Equity; 6.00% Real Estate Funds; 30.00% Core Bond Funds; 10.00% Inflation-Linked Bond Funds

(Risk level - Moderate)

This investment option seeks to provide a favorable long-term total return by allocating to a balanced mix of mutual funds invested in domestic and foreign equity securities, fixed-income securities and real estate- related securities. Because of the high exposure to domestic and foreign equities, and the corresponding degree of risk, this option may be appropriate for you if you can tolerate a degree of volatility in exchange for potentially higher returns over time. This investment option may be appropriate for use as a single investment option, or for use in conjunction with other investment options offered by the Plan.

Effective as of June 18, 2013, this Investment Option will increase the allocation of its assets to Mutual Funds that are managed to track a particular index and will proportionately decrease the allocation of its assets to actively managed Mutual Funds. In addition, this Investment Option will increase the allocation of its assets to Mutual Funds that focus on investment in the equity securities of foreign/emerging market issuers or in instruments with economic characteristics similar to "emerging market securities" and will proportionately decrease the allocation of its assets to Mutual Funds that focus on investment in the equity securities of domestic issuers.

Allocations for all investments are as of June 18, 2013. Allocations are reviewed and adjusted periodically.


100% Fixed-Income Option

100% Fixed Option: 75.00% Core Bond Funds; 25.00% Inflation-Linked Bond Funds

(Risk level - Moderate)

This investment option seeks to provide preservation of capital along with a moderate rate of return through a diversified mix of fixed-income investments. This investment option may be appropriate for you if you have a medium to short investment horizon and can tolerate a moderate level of risk.

Effective as of October 20, 2011, this Investment Option will increase the allocation of its assets to Mutual Funds that are managed to track a particular index and will proportionately decrease the allocation of its assets to actively managed Mutual Funds.

Allocations for all investments are as of June 18, 2013. Allocations are reviewed and adjusted periodically.


Money Market Option

(Risk level - Conservative)

This investment option seeks to provide high current income consistent with preserving capital and may be appropriate for you if you have a short investment horizon and are looking for a conservative investment with a low level of risk. This investment option is allocated to the TIAA-CREF Money Market Fund — Institutional Class.


Guaranteed Option

(Risk level - Conservative)

This investment option seeks to preserve capital and provide a stable return. It may be appropriate for you if you have a short investment horizon and are looking for a conservative investment with a low level of risk. The contributions invested in this investment option are allocated to a Funding Agreement issued by TIAA-CREF Life to the Minnesota State Board of Investment, which is the policyholder under the agreement. The Funding Agreement provides for a return of principal plus a guaranteed rate of interest and allows for the possibility that additional interest may be credited as declared periodically by TIAA-CREF Life. The interest rate guarantee is made to the Minnesota State Board of Investment only, and not to account owners or beneficiaries. The rate of any additional interest is declared in advance for a period of up to 12 months and is not guaranteed for any future periods. The term of the Funding Agreement is intended to coincide with the term of the Management Agreement.

Transfers from the Guaranteed Option to the Money Market Option are not permitted. If this restriction changes, you will be notified prior to the effective date of any such change.

Effective April 1, 2014, contributions received, and accumulations arising from such contributions, under the Funding Agreement for the Guaranteed Option as of March 31, 2014 will be credited to the Minnesota State Board of Investment (on behalf of the Minnesota Office of Higher Education) with an effective annual interest rate of 1.20% and are guaranteed to earn this rate through March 31, 2015, subject to the claims paying ability of TIAA-CREF Life.


Underlying TIAA-CREF Funds - Institutional Class

Following is the list of underlying Institutional Class Shares of the TIAA-CREF Funds - Institutional Class:

  • International Equity Fund
  • Large-Cap Growth Index Fund
  • Large-Cap Value Index Fund
  • Equity Index Fund
  • S&P 500 Index Fund
  • Small-Cap Blend Index Fund
  • Real Estate Securities Fund
  • Inflation-Linked Bond Fund
  • Money Market Fund
  • Emerging Markets Equity Index Fund
  • Bond Index Fund
  • Short-Term Bond Fund

Please read the prospectus for the Institutional Class Shares of the TIAA-CREF Funds - Institutional Class before investing. However, keep in mind that an investment in the Minnesota College Savings Plan is not the same as a direct investment in the underlying mutual funds.

The TIAA-CREF Institutional Money Market Fund is not insured or guaranteed by the federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to maintain a stable net asset value of $1.00 per share, you can lose money by investing.



Account values are not guaranteed and will fluctuate with market conditions. For a complete discussion of risks associate with each investment option, please refer to the Disclosure Booklet.

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