SOURCE: BlackRock, Inc.

BlackRock, Inc.

December 06, 2011 15:08 ET

Morningstar Cites iShares 529 Plan® as "Excellent Choice" for Financial Advisors

ETF-Only Structure Enhances Plan's Customization Features; Plan Well Aligned With Advisor Use of 529s in Year-end Planning

LITTLE ROCK, AR--(Marketwire - Dec 6, 2011) - iShares, a global leader in exchange traded funds (ETFs), today announced it was one of only two advisor-sold 529 college savings plans to be given an "Above Average" rating in Morningstar's eighth annual 529 Industry Survey.

The 2011 survey examined 58 of the largest 529 plans and assigned analyst ratings of "Top," "Above Average," "Average," "Below Average," or "Bottom." The iShares 529 Plan also rated "Above Average" in 2010, the first year the plan was evaluated by Morningstar.

The iShares 529 college savings plan is the 529 industry's only plan with all ETFs as the underlying investments.

"Morningstar's favorable ranking further validates the significant appeal of the model on which we have built the iShares 529 Plan," said Stephen Jobe, director of the iShares 529 program at BlackRock. "In considering a range of factors, Morningstar's evaluation acknowledged that the flexibility, transparency, and low cost of the plan combine to form a smart option for investors."

Available through financial advisors, the iShares 529 Plan is a college savings plan sponsored by the State of Arkansas, which offers additional tax benefits to account owners who are Arkansas taxpayers. The plan has grown rapidly since it was first introduced, with plan assets more than doubling year-over-year since the plan's inception in 2007.

"As more and more financial advisors build 529-based college savings strategies into client financial planning, we anticipate that Morningstar's recognition of our 529 plan's quality may drive even greater acceptance of our plan," said Jobe.

Morningstar Praises Customization Features Backed by ETFs

Morningstar noted that because of the iShares 529 plan's broad offering of individual-fund portfolios from which investors can choose, "this plan is an excellent choice for advisors who can build a custom portfolio... this is a well-constructed option and one of the cheapest broker-sold options available."1

The iShares 529 Plan's appeal is also reflected in Morningstar's companion report, the "529 College Savings Plans Research Paper and Industry Survey." The iShares 529 Plan ranked first in Average Account Size ($28,232 as of 9/30/11) and Average Fee Level Percentile Rankings, ahead of even some of the industry's most popular direct-sold plans.

Advisors Adopting the 529 Approach in Financial Planning

529 plans are becoming an increasing popular tool among financial advisors who counsel their clients on college savings and tax planning, industry data indicate.2

529 plans are frequently used in financial planning given key features such as:

  • Tax deferred growth (savers do not lose earnings to federal taxes when withdrawals are made for qualified higher education expenses)3
  • Accelerated gifting (families can in one lump sum gift five years' worth of allowable exclusions -- $130,000 for couples filing jointly -- into 529 plans4)
  • Client control (the account owner -- not the beneficiary -- controls the assets)
  • State tax deduction (for example, Arkansas taxpayers can deduct up to $5,000, or up to $10,000 for married couples, of their iShares 529 Plan contributions from their Arkansas adjusted gross income)5

"529 plans continue to evolve, with more sophisticated offerings and risk management tools entering the marketplace," said Jobe. "Advisors are seeing the potential benefits of incorporating 529 plans into their clients' overall strategies often focusing on 529 planning during year-end gifting conversations, helping them to prepare for escalating college costs while making the most out of the plans' benefits.

"Financial advisors play an invaluable role in helping clients plan for college costs, so we fully anticipate seeing more advisors getting involved in the delivery of this crucial service, with the support of 529 plans," he said. "As this trend builds, iShares will remain committed to maintaining our 529 plan as a superior college savings tool for advisors and their clients."

For more information about iShares 529 Plan, please visit

About the iShares 529 Plan: The iShares 529 Plan is a college savings plan sponsored by the State of Arkansas. It is available through financial advisors, and is the only 529 plan with all Exchange Traded Funds as the underlying investments. With Exchange Traded Funds at its core, the iShares 529 Plan breaks new ground in the 529 plan arena by offering attractive benefits, including low expenses and transparency. For more information about the iShares 529 Plan, please visit

About BlackRock: BlackRock (NYSE: BLK) is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At September 30, 2011, BlackRock's AUM was $3.345 trillion. BlackRock offers products that span the risk spectrum to meet clients' needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of September 30, 2011, the firm has approximately 10,200 employees in 27 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at

About iShares: iShares is the global product leader in exchange traded funds with over 460 funds globally across equities, fixed income and commodities, which trade on 19 exchanges worldwide. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.

For more information about the iShares 529 Plan, contact your financial advisor, call 1-888-529-9552 or visit to obtain a Program Description and Participation Agreement which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing or sending money. Upromise Investments, Inc. Co-Distributor and Underwriter; BlackRock Fund Distribution Company, Co-Distributor.

If you are not an Arkansas taxpayer, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.

The iShares 529 Plan is a college tuition savings program sponsored by the State of Arkansas and is administered by The Arkansas 529 Plan Review Committee (Committee). Upromise Investments, Inc. (UII), and Upromise Investment Advisors, LLC (UIA), serve as the Program Manager and Recordkeeping and Servicing Agent, respectively, with overall responsibility for the day-to-day operations, including marketing and co-distribution of the iShares 529 Plan. BlackRock Fund Distribution Company also has responsibility for co-distribution of the iShares 529 Plan. BlackRock Institutional Trust Company, N.A., serves as Investment Manager of the iShares 529 Plan except for the Savings Portfolio, which is managed by Sallie Mae Bank. The iShares 529 Plan's Portfolios invest in either (i) exchange traded funds; or (ii) a Federal Deposit Insurance Corporation (FDIC)-insured omnibus savings account held in trust by the Committee at Sallie Mae Bank. Upromise, Inc., UII, UIA and Sallie Mae Bank are affiliates. Units of the Portfolios are municipal securities, are not exchange traded funds, and the value of units will vary with market conditions.

Investment returns will vary depending on the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, you could lose all or a portion of your money by investing in the iShares 529 Plan, depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Investing involves risk, including possible loss of principal. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

The Aggregate balance of all 529 Plan accounts sponsored by the State of Arkansas for the same designated beneficiary may not exceed $366,000.

A periodic plan of regular investment cannot assure a profit or protect against a loss in a declining market.

Neither BlackRock Institutional Trust Company, N.A., and its affiliates nor Upromise and its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

BlackRock Institutional Trust Company, N.A. and BlackRock Fund Distribution Company are subsidiaries of BlackRock, Inc., none of which is affiliated with Upromise.

© 2011 BlackRock Institutional Trust Company, N.A. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. BlackRock® is a registered trademark of BlackRock, Inc. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. 529-0222-1211

* Not FDIC Insured (except for the Savings Portfolio) * No Bank, State or Federal Guarantee * May Lose Value

1 Source: Morningstar, October 2011

2 Source: FRC, November 2011

3 Qualified Expenses include tuition, room & board costs, supplies. Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

4 In the event the donor does not survive the 5-year period, a pro-rated amount will revert back to the donor's taxable estate. Your clients should consult their tax advisor for more information.

5 Contributions to the Plan in a taxyear are deductible from Arkansas state income tax, subject to recapture in subsequent years in which non-qualified withdrawals or a rollover out to another state's 529 plan is made.