Some investors want added control over their investment option‘s diversification and investment strategy. If you‘re one of those people, the Multi-Fund Investment Options available through the Michigan Education Savings Program (MESP) might be the investment type for you.
With the Multi-Fund investment options, you can select from a range of investment types suitable for a variety of risk profiles and asset allocation blends. Choices may include options such as international investments, which are investments made entirely outside the US and balanced funds, which try to provide a mix of both safety and modest returns.
Most investment options also include index and actively managed choices. Index funds are designed to track a benchmark index. Active management, by contrast, is managed by a person using research, forecasts, and their own experience to make investment decisions.
No matter which option(s) you choose, it‘s important to note that once you‘ve selected an investment, the funds will remain there until you select another.
Changing Your Investments
Once you invest in a particular investment option, you can transfer contributions and any earnings to another investment option only twice per calendar year or upon a transfer of funds to a MESP account for a different beneficiary.
Periodically Review Your Investments
It‘s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change — for example, annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.
How Multi-Fund Investment Options Work
These investment options seek to provide options for people who prefer to select an investment option for its asset allocation. Each multi-fund investment option has a different investment objective and investment strategy.
The allocations to the underlying mutual funds in the multi-fund investment options do not change automatically as the beneficiary ages as they do in the Enrollment Year Investment Options. Investments will remain in the multi-fund investment options until the account owner instructs the Plan to move them to another investment option. The Board may change the asset allocations and underlying mutual funds for these investment options (as well as for the other investment options) at any time.
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AGGRESSIVE ALLOCATION OPTION(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly through capital appreciation.
Investment Strategy. To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 72.00%Equities
20.00%Fixed Income
8.00%Real Estate
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MODERATE ALLOCATION OPTION(Risk Level — Moderate to Aggressive)
Investment Objective. This Investment Option seeks moderate growth.
Investment Strategy. To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 54.00%Equities
40.00%Fixed Income
6.00%Real Estate
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CONSERVATIVE ALLOCATION OPTION(Risk Level — Moderate)
Investment Objective. This Investment Option seeks to provide moderate long-term total return mainly through current income.
Investment Strategy. To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 27.00%Equities
50.00%Fixed Income
20.00%Principal Protected
3.00%Real Estate
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INTERNATIONAL EQUITY INDEX OPTION(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly through capital appreciation.
Investment Strategy. This Investment Option invests in certain funds that mainly invest in foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emergingmarket countries. This Investment Option allocates its assets to funds that are considered to be “index funds,” meaning that they attempt to track a benchmark index. 80.00%International Equities
20.00%Emerging Markets Equities
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GLOBAL EQUITY INDEX OPTION(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly from capital appreciation.
Investment Strategy. This Investment Option invests in certain funds that mainly invest in equity securities. This Investment Option allocates its assets to funds that are considered to be “index funds,” meaning that they attempt to track a benchmark index. The equity securities in which the underlying funds invest include:
70.00%Equities
25.00%International Equities
5.00%Emerging Markets Equities
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100% FIXED-INCOME OPTION(Risk Level — Moderate)
Investment Objective. This Investment Option seeks to provide a moderate long-term rate of return primarily through current income.
Investment Strategy. This Investment Option invests in funds that mainly invest in debt securities, including:
80.00%Bonds
20.00%Inflation-Linked Bonds
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Multi-Fund Investment Options
PORTFOLIO NAME | ALLOCATION | PORTFOLIO OBJECTIVE |
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AGGRESSIVE ALLOCATION OPTION |
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(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly through capital appreciation.
Investment Strategy.To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 72.00%Equities
20.00%Fixed Income
8.00%Real Estate
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MODERATE ALLOCATION OPTION |
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(Risk Level — Moderate to Aggressive)
Investment Objective. This Investment Option seeks moderate growth.
Investment Strategy. To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 54.00%Equities
40.00%Fixed Income
6.00%Real Estate
Read More
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CONSERVATIVE ALLOCATION OPTION |
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(Risk Level — Moderate)
Investment Objective. This Investment Option seeks to provide moderate long-term total return mainly through current income.
Investment Strategy. To varying degrees, each of these Investment Options invests in certain funds that mainly invest in equity securities, including:
Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:
Funds that mainly invest in equity securities may have greater potential for returns than funds that mainly invest in debt securities, but may also have greater risk of loss than funds that mainly invest in debt securities. The Aggressive Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in equity securities (including real estate securities) than the Conservative Allocation Option. The Conservative Allocation Option allocates more assets to funds that mainly invest in debt securities than the Moderate Allocation Option, and the Moderate Allocation Option allocates more assets to funds that mainly invest in debt securities than the Aggressive Allocation Option. In addition to its investments in funds, the Conservative Allocation Option also invests in a funding agreement. See “Principal Plus Interest Option” for a description of the funding agreement. 27.00%Equities
50.00%Fixed Income
20.00%Principal Protected
3.00%Real Estate
Read More
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INTERNATIONAL EQUITY INDEX OPTION |
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(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly through capital appreciation.
Investment Strategy. This Investment Option invests in certain funds that mainly invest in foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emergingmarket countries. This Investment Option allocates its assets to funds that are considered to be “index funds,” meaning that they attempt to track a benchmark index. 80.00%International Equities
20.00%Emerging Markets Equities
Read More
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GLOBAL EQUITY INDEX OPTION |
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(Risk Level — Aggressive)
Investment Objective. This Investment Option seeks to provide a favorable long-term total return, mainly from capital appreciation.
Investment Strategy. This Investment Option invests in certain funds that mainly invest in equity securities. This Investment Option allocates its assets to funds that are considered to be “index funds,” meaning that they attempt to track a benchmark index. The equity securities in which the underlying funds invest include:
70.00%Equities
25.00%International Equities
5.00%Emerging Markets Equities
Read More
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100% FIXED-INCOME OPTION |
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(Risk Level — Moderate)
Investment Objective. This Investment Option seeks to provide a moderate long-term rate of return primarily through current income.
Investment Strategy. This Investment Option invests in funds that mainly invest in debt securities, including:
80.00%Bonds
20.00%Inflation-Linked Bonds
Read More
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