CHOOSE YOUR PATH.
ENSURE THEIR FUTURE.
Investment Option Basics
An overview of the CollegeAdvantage Direct 529 Savings Plan investment options.
TABLE OF CONTENTS
CHOOSE YOUR APPROACH..............................................................................1
KNOW YOUR GOALS........................................................................................2
READY-MADE, AGE-BASED OPTIONS...............................................................3
RISK-BASED OPTIONS....................................................................................7
CAPITAL PRESERVATION (CASH) & FIXED-INCOME (BONDS) OPTIONS............8
BALANCED OPTION (STOCK/BOND MIX)...........................................................9
U.S. EQUITY OPTIONS (STOCKS)....................................................................10
NON-U.S. EQUITY OPTIONS (STOCKS)............................................................11
BANK OPTIONS............................................................................................. 12
CHOOSE YOUR APPROACH
READY-MADE OR DO IT YOURSELF.
NEW TO INVESTING?
Don’t feel overwhelmed if you are new to investing, but ready to start saving today. The CollegeAdvantage Direct Plan offers several ready-made,
professionally managed options along with all of our individual options for college savers, just like you. Don’t wait. Get started today.
READY-MADE MAKES IT EASY
You can choose from three age-based options based on your risk tolerance, or our custom aged-based solution, all of which automatically
diversify to an appropriate mix of investments as your child ages. (See pages 3-6.)
WANT TO DO IT YOURSELF?
If you prefer a more hands-on approach to investing, you can build your own college savings portfolio. Individual options include an assortment
of stock, bond, and cash options, as well as low-risk, FDIC-insured savings accounts and certificates of deposit. (See pages 7-12.)
LEARN MORE
Continue reading for additional details about all of these options. Whether you take the ready-made approach or choose the do-it-yourself way,
it’s your choice, and it’s easy to get started today.
PROFESSIONALLY MANAGED INVESTMENT OPTIONS
To provide you with high-quality, low-cost investment options to help you reach your college savings goals, CollegeAdvantage investment options
are managed by the following leading financial institutions:
This brochure provides an overview of investment options. Before opening an account, please read the CollegeAdvantage Direct 529 Savings Plan Offering Statement and Participation
Agreement available at www.CollegeAdvantage.com. The Offering Statement provides a detailed disclosure of the Direct Plan including investment options, risks, and costs.
1
KNOW YOUR GOALS
BEFORE YOU DECIDE, CONSIDER YOUR GOALS.
When saving for college, it is smart to first determine your goals. With your goals in mind, you can then select options and diversify your
portfolio to meet your needs. Whether you choose the ready-made, age-based options or the do-it-yourself approach, you should begin by
asking yourself these four questions:
1
Remember, the sooner you start, the more time you have to save. Even small contributions add up to big savings when invested regularly.
2
Use our online risk tolerance tool to help identify your preference.
(www.CollegeAdvantage.com/planning-tools)
3
At this point in time, it may be difficult to predict which school or degree program might interest your child in the future. That’s okay. Use our online college cost calculator to get an estimate of costs.
(www.CollegeAdvantage.com/planning-tools)
4
This is a personal decision that will guide your investment strategy.
Some parents want to save enough to pay all college costs, while others feel their children should share some of the costs themselves.
READY-MADE, AGE-BASED OPTIONS
YOUR CHILDREN CHANGE AS THEY GROW.
SO DOES YOUR PORTFOLIO.
The CollegeAdvantage age-based options are the simplest of all our Direct Plan investment options. We call them “ready-made” because
the asset mix and allocation milestones are pre-determined. They are designed to take into account your child’s age and the number
of years before he or she attends college. As your child grows, your portfolio shifts from growth to lower risk options. This is achieved
by reallocating the asset mix each time the beneficiary reaches set age intervals, from a mix weighted toward equity (stocks) to a mix
weighted toward fixed-income (bonds) and money market funds. Our age-based options are our most popular because they offer a longterm investment plan and an easy way to begin saving for college.
*Please refer to our CollegeAdvantage Direct Plan Offering Statement and Participation Agreement available at
www.CollegeAdvantage.com for a detailed disclosure of age-based options, their underlying funds, and allocations.
3
There are four age-based options to meet your needs. Three are primarily invested in passively managed Vanguard index options,
offering a conservative, moderate, and aggressive age-based choice. The fourth is The Advantage Age-Based Option, which invests in
four carefully selected portfolios, each with an asset mix of individual CollegeAdvantage equity (stock) and fixed-income (bond) options,
providing a blend of passive and active fund management from multiple fund managers.
INVESTMENT
OPTIONS
UNDERLYING PORTFOLIOS
AND OPTIONS
UNDERLYING INVESTMENTS
OF THE PORTFOLIOS
TIMING OF ASSET
ALLOCATION CHANGE
FUND
MANAGERS
AGE-BASED OPTIONS
Vanguard Conservative
Age-Based Option
Vanguard Moderate Growth
Index Portfolio
Vanguard Conservative
Growth Index Portfolio
Vanguard Income Portfolio
Vanguard Prime
Money Market Option
Vanguard Moderate
Age-Based Option
Vanguard Growth Index Portfolio
Vanguard Moderate Growth
Index Portfolio
Vanguard Conservative Growth
Index Portfolio
Vanguard Income Portfolio
Vanguard Aggressive
Age-Based Option
• Vanguard Total Bond Market II Index Fund
• Vanguard Institutional Total Stock Market Index Fund
• Vanguard Developed Markets Index Fund
• Vanguard Inflation-Protected Securities Fund
• Vanguard Prime Money Market Fund
• Vanguard Institutional Total Stock Market Index Fund
• Vanguard Developed Markets Index Fund
• Vanguard Total Bond Market II Index Fund
• Vanguard Inflation-Protected Securities Fund
• Vanguard Prime Money Market Fund
Vanguard Aggressive Growth
Index Portfolio
• Vanguard Institutional Total Stock Market Index Fund
Vanguard Growth Index Portfolio
• Vanguard Developed Markets Index Fund
Vanguard Moderate Growth
Index Portfolio
• Vanguard Total Bond Market II Index Fund
Vanguard Conservative Growth
Index Portfolio
• Vanguard Inflation-Protected Securities Fund
• Vanguard Prime Money Market Fund
Asset allocation
shifts at the following
age intervals:
Vanguard
Age 6
Age 11
Age 16
Age 19
Asset allocation
shifts at the following
age intervals:
Vanguard
Age 6
Age 11
Age 16
Age 19
Asset allocation
shifts at the following
age intervals:
Vanguard
Age 6
Age 11
Age 16
Age 19
Vanguard Income Portfolio
The Advantage
Age-Based Option
U.S. Equity Portfolio
• Vanguard Institutional Index Fund
International Equity Portfolio
• Vanguard Windsor II Fund
Asset allocation
shifts at the following
age intervals:
Diversified Fixed-Income
Portfolio
• Vanguard Morgan Growth Fund
Age 6
Short-Term Fixed-Income
Portfolio
• Vanguard Extended Market Index Fund
Age 10
• Vanguard Strategic Equity Fund
• GE Institutional International Equity Fund
• Vanguard Developed Markets Index Fund
Vanguard
PIMCO
GE Asset Management
Age 13
Age 17
• Vanguard Inflation-Protected Securities Fund
• Vanguard Total Bond Market II Index Fund
• PIMCO Total Return Fund
• PIMCO High Yield Fund
• Vanguard Prime Money Market Fund
www.CollegeAdvantage.com
4
VANGUARD AGE-BASED OPTIONS
The three Vanguard age-based options allow you to choose based on your tolerance for risk. The assets are managed according
to the age of your child (the beneficiary), along with your risk tolerance, through a series of pre-selected investment portfolios.
The Vanguard age-based options are primarily invested in passively managed index funds, meaning they seek to match market
performance, but generally cost less than actively managed options.
AGE OF
BENEFICIARY
MODERATE
CONSERVATIVE
5 or younger
Vanguard Moderate
Growth Index Portfolio
Vanguard Growth
Index Portfolio
Vanguard Conservative
Growth Index Portfolio
Vanguard Moderate
Growth Index Portfolio
• 75%
• 25%
• 20%
• 5%
• 75%
Vanguard Conservative
Growth Index Portfolio
Vanguard Income Portfolio
16 through 18
• 75%
• 25%
• 75%
• 25%
Vanguard Income Portfolio
19 or older
Vanguard Income Portfolio
• 100%
5
• 75%
• 25%
Vanguard Income Portfolio
Vanguard Prime
Money Market Option
U.S.
Stocks
Vanguard Aggressive
Growth Index Portfolio
• 60%
• 15%
• 25%
• 40%
• 10%
• 50%
• 20%
• 5%
• 75%
11 through 15
• 80%
• 20%
• 60%
• 15%
• 25%
• 40%
• 10%
• 50%
6 through 10
AGGRESSIVE
Bonds
International
Stocks
Vanguard Growth
Index Portfolio
• 40%
• 10%
• 50%
Vanguard Moderate
Growth Index Portfolio
• 20%
• 5%
• 75%
Vanguard Conservative
Growth Index Portfolio
• 75%
• 25%
Vanguard Income Portfolio
Short-Term
Investments
THE ADVANTAGE AGE-BASED OPTION
The Advantage Age-Based Option invests in four distinct asset class portfolios made up of existing CollegeAdvantage equity (stock) and
fixed-income (bond) options. Each portfolio combines actively managed and passively managed investment options in order to reduce both
fees and relative risk. Actively managed funds seek to outperform the market through the buying and selling strategies of the professional
investment managers, while passively managed funds are included to add diversification and to help lower fees.
AGE OF
BENEFICIARY
ASSET ALLOCATION TARGETS OF UNDERLYING PORTFOLIOS
5 or younger
• 60.00% U.S. Equity Portfolio
• 30.00% International Equity Portfolio
•9.75% Diversified Fixed-Income Portfolio
•0.25% Short-Term Fixed-Income Portfolio (not shown)
6 through 9
• 55.00% U.S. Equity Portfolio
• 30.00% International Equity Portfolio
•14.62% Diversified Fixed-Income Portfolio
•0.38% Short-Term Fixed-Income Portfolio (not shown)
10 through 12
• 50.00% U.S. Equity Portfolio
• 25.00% International Equity Portfolio
•24.37% Diversified Fixed-Income Portfolio
•0.63% Short-Term Fixed-Income Portfolio (not shown)
13 through 16
• 20.00% U.S. Equity Portfolio
• 20.00% International Equity Portfolio
•58.50% Diversified Fixed-Income Portfolio
•1.50% Short-Term Fixed-Income Portfolio (not shown)
17 or older
• 5.00% U.S. Equity Portfolio
• 5.00% International Equity Portfolio
• 37.05% Diversified Fixed-Income Portfolio
• 52.95% Short-Term Fixed-Income Portfolio
U.S.
Stocks
Bonds
International
Stocks
Short-Term
Investments
www.CollegeAdvantage.com
6
RISK-BASED OPTIONS
EARNINGS POTENTIAL BASED ON RISK.
Risk-based options allow you to invest based on your risk tolerance. Whether you are conservative or seek aggressive growth, we offer
several options along the continuum of risk, so you can choose the portfolio that best suits your risk tolerance and goals.
INVESTMENT
OPTIONS
INVESTMENT OBJECTIVE
UNDERLYING INVESTMENTS AND ASSET ALLOCATION
RISK-BASED OPTIONS
Vanguard Income Portfolio
Seeks to provide current income.
Vanguard Total Bond Market II Index Fund
• 50%
25%
Vanguard
Securities Fund
• 25% Vanguard Inflation-Protected
Prime
Money
Market
Fund
•
Vanguard Conservative Growth
Index Portfolio
Seeks to provide income and low to
moderate capital appreciation.
Vanguard Total Bond Market II Index Fund
• 75%
20%
Vanguard
• Total Stock MarketInstitutional
Index Fund
5%
Vanguard
Developed
Markets Index Fund
•
Vanguard Moderate Growth Index
Portfolio
Seeks to provide capital appreciation
and current income.
Vanguard Growth Index Portfolio
Seeks to provide capital appreciation
and low to moderate income.
Vanguard Institutional
• 60%
Total Stock Market Index Fund
Vanguard Developed Markets Index Fund
• 15%
• 25% Vanguard Total Bond Market II Index Fund
Vanguard Aggressive Growth Index
Portfolio
Seeks to provide capital appreciation.
Vanguard Institutional
• 80%
Total Stock Market Index Fund
• 20% Vanguard Developed Markets Index Fund
7
Vanguard Total Bond Market II Index Fund
• 50%
40%
Vanguard
• Total Stock MarketInstitutional
Index Fund
10%
Vanguard
Developed
Markets Index Fund
•
CAPITAL PRESERVATION
AND FIXED-INCOME OPTIONS
LESS RISK. MORE SECURITY.
Capital preservation (cash) options may appeal to risk-averse investors, parents with children near college age, or those with children
currently enrolled in college.
Fixed-income (bonds) options may appeal to investors seeking to diversify their portfolios and those seeking to reduce risk.
INVESTMENT
OPTIONS
INVESTMENT
OBJECTIVE
ASSET
CATEGORY
UNDERLYING
INVESTMENTS
INVESTMENT STYLE/
CHARACTERISTICS
CAPITAL PRESERVATION (CASH) AND FIXED-INCOME (BONDS) OPTIONS
Vanguard Prime
Money Market Option
(cash)
PIMCO Total Return Option
(bonds)
Vanguard InflationProtected Bond Option
(bonds)
PIMCO High Yield Option
(bonds)
Seeks to provide current income
while maintaining liquidity and
preserving principal.
Cash/Short-Term
Investments
Vanguard Prime Money
Market Fund
Invests in high-quality,
short-term money market
instruments.
Seeks maximum total return,
consistent with preservation
of capital and prudent
investment management.
Investment-Grade
Intermediate-Term Bond
PIMCO Total Return Fund
Invests in a diversified portfolio
of actively managed high quality
bonds to maximize return and
control risk.
Seeks to provide inflation
protection and income
consistent with investment
in inflation-indexed securities.
Treasury Inflation-Protected
Securities (TIPS)
Vanguard
Inflation-Protected
Securities Fund
Volatility typically lower than
nominal U.S. Treasury bonds.
Provides unique diversification
benefits.
Seeks maximum total return,
consistent with preservation
of capital and prudent
investment management.
High-Yield Bond
PIMCO High Yield Fund
Invests primarily in high-yield,
non-investment-grade bonds.
www.CollegeAdvantage.com
8
BALANCED
OPTION
(MIX OF STOCKS AND BONDS)
A BALANCED MIX TO HELP YOU ACHIEVE YOUR GOAL.
If you are interested in an investment that combines active management with a balanced exposure to both equities and bonds, you may
want to consider the balanced investment option.
INVESTMENT
OPTION
INVESTMENT OBJECTIVE
UNDERLYING INVESTMENTS & ASSET ALLOCATION
BALANCED OPTION (MIX OF STOCKS AND BONDS)
Vanguard Wellington Option
9
Seeks to provide long-term capital
appreciation and reasonable current
income.
Invests 100% in the Vanguard Wellington Fund
• 60%-70% U.S. Large and Mid-Cap Value Stocks
• 30%-40% U.S. Fixed-Income (Bonds) Securities
U.S.
EQUITY
OPTIONS
(STOCKS)
HIGHER RISK. GREATER POTENTIAL.
CollegeAdvantage offers several U.S. equity options from various segments of the stock market, including the stocks of small, midsize,
and large domestic companies, both growth and value, across all industries. Historically, stocks have provided the highest returns over
time, but stock prices fluctuate, sometimes dramatically. Because of this, equity investments tend to have the highest level of risk of all
asset classes.
INVESTMENT
OPTIONS
INVESTMENT
OBJECTIVE
ASSET
CATEGORY
UNDERLYING
INVESTMENTS
INVESTMENT STYLE/
CHARACTERISTICS
U.S. EQUITY OPTIONS (STOCKS)
Vanguard 500
Index Option
Seeks to track the performance
of a benchmark index that
measures the investment return
of large-capitalization stocks.
U.S. Large-Cap Stocks
Vanguard Institutional
Index Fund
Employs an indexing investment
approach designed to track the
S&P 500.
Vanguard
Windsor II Option
Seeks to provide long-term
capital appreciation and income.
U.S. Large-Cap Stocks--Value
Vanguard Windsor II Fund
Invests mainly in large- and midcap U.S. companies whose stocks
are considered to be undervalued.
Vanguard Morgan
Growth Option
Seeks to provide long-term
capital appreciation.
U.S. Large-Cap Stocks--Growth
Vanguard Morgan Growth Fund
Invests mainly in mid- and
large-cap U.S. companies whose
revenues are expected to grow
faster than the average company.
Vanguard Extended
Market Index Option
Seeks to track the performance
of a benchmark index that
measures investment return of
small- and mid-cap stocks.
U.S. Small- and Mid-Cap Stocks
Vanguard Extended Market
Index Fund
An index of broadly diversified
stocks of small and midsize U.S.
companies.
Vanguard Strategic
Equity Option
Seeks to provide long-term
capital appreciation.
U.S. Small- and Mid-Cap Stocks
Vanguard Strategic Equity Fund
Invests in small- and mid-cap
domestic stocks.
www.CollegeAdvantage.com
10
NON-U.S.
EQUITY
OPTIONS
(STOCKS)
HIGHER RISK. GREATER POTENTIAL.
In addition to the U.S. equity options, we also offer international equity options for those seeking to invest in the stocks of international
companies. Just as with all equity fund investments, they offer a higher level of risk along with the potential for higher returns over time.
INVESTMENT
OPTIONS
INVESTMENT
OBJECTIVE
ASSET
CATEGORY
UNDERLYING
INVESTMENTS
INVESTMENT STYLE/
CHARACTERISTICS
NON-U.S. EQUITY OPTIONS (STOCKS)
Vanguard Developed
Markets International
Stock Index Option
Seeks to track the FTSE Index
(companies located in Europe,
Australia, Asia and the Far East).
International Stocks
Vanguard Developed Markets
Index Fund
Mimics the investing and
weighting of the target index.
GE Institutional
International Equity
Option
Seeks to provide long-term
growth of capital.
International Stocks
GE Institutional International
Equity Fund
Invests mainly in growth and value
companies in both developed and
emerging markets.
11
BANK OPTIONS
100% CASH. 100% GUARANTEED.
FIFTH THIRD 529 SAVINGS ACCOUNT
A Fifth Third 529 savings account lets your money grow over time with the security of FDIC insurance and 529 tax advantages. Other advantages
include premium market rates of interest, guaranteed rate of return, no fees, and a low minimum deposit of $25.
Please visit www.CollegeAdvantage.com for current Annual Percentage Yields (APYs), which are based on your 529 savings account balance.
FIFTH THIRD 529 CERTIFICATE OF DEPOSIT
The Fifth Third 529 CDs offer a wide variety of terms, allowing you to
maximize your return and take advantage of longer-term market rates.
The Annual Percentage Yield (APY) is based on the CD term length, not
on the opening balance. Minimum opening contribution for all Fifth Third
CDs is $500. Please visit www.CollegeAdvantage.com for current APYs on
Certificates of Deposit.
CD features:
•Premium market rates of interest
•Guaranteed rate of return with FDIC backing, up to federal limits
•Option to choose the maturity that best suits your needs (3 months to 12 years; early withdrawal penalties apply)
•Automatic transfer to a Fifth Third 529 Savings Account at maturity
Once CDs mature and transfer to a Fifth Third 529 Savings Account, you
can withdraw the funds, exchange the funds to another Fifth Third 529 CD or to
other CollegeAdvantage investment options,* or leave the money in the savings
account to earn interest.
*Federal regulations for 529 plans limit the number of times account owners can reallocate investment
options for the same beneficiary. See the CollegeAdvantage Direct Plan Offering Statement and
Participation Agreement for details.
12
OHIO TUITION TRUST AUTHORITY
35 E. Chestnut St., 8th Floor
Columbus, OH 43215-2541
To enroll, or for more information about the CollegeAdvantage Direct 529 Savings Plan,
visit www.CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734).
If you work with a financial advisor, you may also consider the CollegeAdvantage Advisor
529 Savings Plan offered by BlackRock. To learn more, go to www.BlackRock.com/
CollegeAdvantage.
The CollegeAdvantage Direct 529 Savings Plan is sponsored by the Ohio Tuition Trust Authority, a state agency within the Office of the Chancellor of the Ohio Board of Regents.
The Ohio Tuition Trust Authority sponsors three college savings plans: CollegeAdvantage Direct 529 Savings Plan, CollegeAdvantage Advisor 529 Savings Plan offered through BlackRock,
and CollegeAdvantage Guaranteed 529 Savings Plan (which is closed to new enrollments and new contributions). You may own accounts in one or more of these CollegeAdvantage Plans.
For questions about the CollegeAdvantage Direct 529 Savings Plan or the CollegeAdvantage Guaranteed 529 Savings Plan, call CollegeAdvantage at 1-800-AFFORD-IT (233-6734), Monday
– Friday from 8:30 a.m. to 6:00 p.m. ET, or by email to CustomerService@CollegeAdvantage.com. For questions about your CollegeAdvantage Advisor 529 Savings Plan offered through
BlackRock, please contact BlackRock at (866) 529-8582.
Any investment in a CollegeAdvantage investment option, except a Fifth Third investment option, is not insured or guaranteed by the FDIC or any other government agency or other party,
including the State of Ohio, Ohio Tuition Trust Authority (OTTA), or any of the mutual fund firms under contract with OTTA. Any investment in a Fifth Third investment option is insured by the
FDIC, up to the limits set by the FDIC. An investment in a CollegeAdvantage mutual fund-based investment option is not a direct investment in a mutual fund itself. Except for the Fifth Third
investment options, participants assume all investment risk of an investment in CollegeAdvantage, including the potential loss of principal. Regular investing does not ensure a profit or
protect against a loss. The amount actually available for withdrawal will depend on the investment performance of the investment options chosen.
Participation in the CollegeAdvantage Direct 529 Savings Plan does not guarantee that contributions, or the investment return on contributions, if any, will be adequate to cover the future
tuition and other qualified higher education expenses, or that a beneficiary will be admitted to or permitted to continue to attend an institution of higher education.
To learn more about CollegeAdvantage, its investment objectives, risks, and costs, read the Direct Plan Offering Statement and Participation Agreement available at www.CollegeAdvantage.
com. If you are not an Ohio resident, check with your home state to learn if it offers state tax or other benefits for investing in its own 529 plan.
All other trademarks, servicemarks, or registered trademarks are the property of their respective owners. Used with permission.
© 2014 Ohio Tuition Trust Authority. All rights reserved.
Ohio Tuition Trust Authority, 35 E. Chestnut St., 8th Floor, Columbus, OH 43215
I0B (3-14)