N.M. offers alternatives in 529 plan

OppenheimerFunds Inc. has changed its New Mexico 529 college savings plan to include alternative investments and access to some of the firm's most popular funds within the tax-advantaged savings vehicle. As part of a new custom investment option, the Y share class for OppenheimerFunds will serve as the underlying investment in each of the new portfolio offerings, said Steve Dombrower, OppenheimerFunds' director of college savings programs. “Thousands of advisers who sell these funds aren't selling our 529s, and we hope now they will,” he said. “We're also adding alternative investment choices, including commodities, real estate and special minerals.”

NOVEL ELEMENT

There are only a handful of firms that offer alternative investments in Section 529 plans and even fewer that offer access to a minerals portfolio, according to Paul Curley, director of the Financial Research Corp.'s college savings plan research. OppenheimerFunds' Gold and Special Minerals (OGMYX) is one of the funds to which the plans will now have access through the college savings plan. New Mexico residents who invest in the plan, called Scholar's Edge, earn a state tax deduction, as well as federal tax benefits. All Section 529 college savings plans, named after the tax code that created them, grow federal-tax-free as long as the money is used for college expenses. In other changes, OppenheimerFunds made it easier for advisers to access 529 plan product information on its website, advisorsedge529.com. It also refocused the plan's education materials to show the benefits of saving for college versus funding it with student loans.