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Fund Spy

6 529 Plans Suffer Downgrades in 2016

2 former Gold-rated plans slip, the list of Negative-rated plans grows.

Earlier this week, we released our annual ratings for 63 529 plans, which in aggregate represent more than 97% of the industry’s assets. Morningstar identified 33 plans that it believes to be best-in-class options, assigning these programs Morningstar Analyst Ratings of Gold, Silver, and Bronze. Twenty-seven plans earned Neutral ratings, and just three received Negative ratings. Some Neutral-rated programs may hold appeal for in-state residents because of meaningful added benefits, such as local tax breaks, so investors should research their states' particular benefits.

In terms of ratings changes, Morningstar upgraded six plans and downgraded six this year. The article published earlier this week focused on the upgrades; this article details the downgrades. In-depth analyses of all 63 plans under coverage are located on Morningstar.com.

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