Michigan Education Savings Program (MESP)

Multi-Fund Investment Options

Want investment options with more choices when it comes to diversity and risk? If so, Multi-Fund investments are worth a closer look.

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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Multi-Fund Investment Options
Multi-Fund Investment Options
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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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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
+ X

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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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
+ X

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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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
+ X

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
+ X

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:
  • U.S. equity securities across all capitalization ranges; and
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries.


  70.00%Equities
  25.00%International Equities
    5.00%Emerging Markets Equities
+ X

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:
  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).


  80.00%Bonds
  20.00%Inflation-Linked Bonds
+ X

Multi-Fund Investment Options


Multi-Fund Investment Options
PORTFOLIO NAME ALLOCATION PORTFOLIO OBJECTIVE
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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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
Read More X

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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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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 X

View Underlying Mutual Funds

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:
  • U.S. equity securities across all capitalization ranges;
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries; and
  • Stocks of U.S. companies across all capitalization ranges within the real estate sector, including equity real estate investment trusts (commonly known as “REITs”).

Also, to varying degrees, each of these Investment Options invests in certain funds that mainly invest in debt securities, including:

  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).

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 X

View Underlying Mutual Funds

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
Read More X

View Underlying Mutual Funds

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:
  • U.S. equity securities across all capitalization ranges; and
  • Foreign equity securities of large- and mid-capitalization companies, including the securities of issuers located in developed countries and emerging-market countries.


  70.00%Equities
  25.00%International Equities
    5.00%Emerging Markets Equities
Read More X

View Underlying Mutual Funds

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:
  • A wide spectrum of public, investment-grade, taxable, fixed-income securities in the U.S., including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities;
  • A diversified group of high-yielding, higher-risk corporate bonds (commonly known as “junk bonds”) with medium- and lower-range credit quality ratings; and
  • Publicly issued U.S. Treasury Inflation-Protected Securities (commonly known as “TIPS”).


  80.00%Bonds
  20.00%Inflation-Linked Bonds
Read More X

View Underlying Mutual Funds

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The investment portfolios are subject to the risks of the underlying funds including the loss of principal.


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