Investment options
With 22 American Funds available in CollegeAmerica®, you and your financial professional can design a college savings program to match your individual needs.
Single fund approach
See a listing of all 22 American Funds and their categories.
You can keep it simple and invest in a single fund that you can buy and hold for many years.
If your child has a long time before college, you may consider investing a share of assets in one of the seven funds in the growth category.
If you have a shorter time frame or want to be more conservative, you may want an “all-weather” fund that invests in both stocks and bonds. Consider one of the three funds in the equity-income and balanced categories.
Diversified portfolio approach
You may prefer to build a portfolio of funds that you can change every few years as your child moves from preschool through high school.
Below are five model portfolios designed as guides to help you get started. These models, based on your child’s age, begin with an emphasis on growth but become progressively more conservative as your child gets closer to college.
These models are suggestions and your portfolio will not automatically rebalance. Your financial professional can guide you when you make adjustments.
Getting a head start
 Growth |
45% |
|---|---|
 Growth-and-income |
40% |
 Equity-income/Balanced |
15% |
If you’re thinking of starting a family or expecting yours to grow, your time horizon is a long one. This portfolio benefits from a significant concentration in growth funds, as well as the balancing effect of the dividend-paying stocks that comprise the biggest share of most growth-and-income and equity-income funds.
Newborn to 7 years old
| Growth |
25% |
|---|---|
| Growth-and-income |
35% |
| Equity-income/Balanced |
20% |
 Bond |
20% |
As your child goes from newborn to infant to toddler to grade schooler, college is still a long way off. A mix of equity funds that strikes a balance between growth and income is in line with your time horizon. But it’s likewise important to begin introducing bond funds, which in addition to providing income, offer the portfolio increased stability.
8–12 years old
| Growth |
15% |
|---|---|
| Growth-and-income |
25% |
| Equity-income/Balanced |
20% |
| Bond |
40% |
With your child roughly halfway to college, your portfolio should reflect an increasingly conservative posture. Growth funds still play a role, but the portfolio’s income-oriented component and increased bond fund holdings emphasize the importance of preserving your investment.
13–15 years old
| Growth |
5% |
|---|---|
| Growth-and-income |
20% |
| Equity-income/Balanced |
15% |
| Bond |
60% |
As your child enters high school, college is well within sight and it’s time for stability to become the investment focus. This means further reducing holdings in each of the different equity fund categories and earmarking the largest share of the portfolio for bond funds.
16+ years old
| Growth-and-income |
10% |
|---|---|
| Equity-income/Balanced |
10% |
| Bond |
80% |
This portfolio is designed for the period immediately before college as well as the time your child will spend enrolled. During these years, preserving capital is essential. By maintaining a fraction of the portfolio in equity funds, you’re recognizing the importance of diversification, but a portfolio invested primarily in bond funds best matches your needs.
Of course, you may prefer a different mix of investments or want to change your allocation at a different time than these models show. Your financial professional can help you choose funds that best fit your time horizon and risk tolerance and guide you when you make adjustments to your portfolio.
American Funds and their categories
Here are the 22 American Funds available in CollegeAmerica:
Growth funds
- AMCAP Fund®
- The Growth Fund of America®
- The New Economy Fund®
- EuroPacific Growth Fund®
- New Perspective Fund®
- New World FundSM
- SMALLCAP World Fund®
Growth-and-income funds
- American Mutual Fund®
- Capital World Growth and Income FundSM
- Fundamental InvestorsSM
- The Investment Company of America®
- Washington Mutual Investors FundSM
Equity-income funds
- Capital Income Builder®
- The Income Fund of America®
Balanced fund
- American Balanced Fund®
Bond funds
- American High-Income TrustSM
- The Bond Fund of AmericaSM
- Capital World Bond Fund®
- Intermediate Bond Fund of America®
- Short-Term Bond Fund of AmericaSM
- U.S. Government Securities FundSM
Money market fund
The Cash Management Trust of America®
CollegeAmerica is sponsored by Virginia College Savings Plan. But you can invest no matter where you live, and your beneficiary can go to school in any state. However, depending on your state of residence, there may be an in-state plan that provides tax and other benefits not available through CollegeAmerica. Before investing in any state’s 529 plan, you should consult your tax adviser.