Wisconsin’s 529 Plan Adds Low-Cost Portfolios

Effective July 8, 2011, three index portfolios were added to EdVest.The reason for this addition is to provide more low-cost options for plan participants, said Jim DiUlio, Wisconsin’s 529 College Savings Program Director.

One of the new portfolios is the Vanguard International Index Portfolio. It invests entirely in the Vanguard Total International Stock Index Fund, providing a 100% international index investment option. In addition, the existing Baird Bond Portfolio and Legg Mason Aggressive Portfolio have become low-cost index portfolios. The Baird Bond Portfolio has become the Vanguard Bond Index Portfolio, and the Legg Mason Aggressive Portfolio has become the Vanguard Small Cap Index Portfolio. These two shifts result in reductions to underlying fund expenses of nearly 23 basis points and 71 basis points, respectively.

With these changes, EdVest now offers five low-cost Vanguard options covering international, domestic, fixed-income, and balanced asset classes to complement the diversified Wells Fargo portfolios currently available in the plan.

Additionally, the underlying investments in the four Wells Fargo-blended portfolios with an equity component have been reallocated to gain a direct exposure to emerging markets. Wells Fargo says that emerging markets have “proven to be one of the few sources of robust economic growth over the past 10 years. They contributed more than 50% to global growth in the late 2000s and have seen their share of global gross domestic product increase from 24% to more than 35% during the past five years. Emerging markets provide a way to add additional economic diversification while maintaining a level of volatility that has generally been consistent with domestic small-cap stocks.”