Investing in a 529 plan
A 529 plan lets you invest in a portfolio - or several portfolios - that are managed by a professional investment management company. Here are some things to keep in mind:

  • These portfolios are municipal securities, not mutual funds. However, the portfolios themselves can invest in mutual funds.
  • It's important to understand that when you invest in a 529 plan you are buying units of the portfolio that the plan offers - not shares of a mutual fund or a single stock or bond.
  • Under the federal tax rules governing 529 plans, you can reallocate your investments once per calendar year or when you change the account's beneficiary, without incurring taxes.