Investment Options

The right college financing strategy may be one of the most important investment decisions you will make. What if you're not an investment professional? We know most people aren't, so we've set up a choice of eight investment options. You can invest new contributions in any one or combination of these eight investment options: Managed Allocation Option, Aggressive Managed Allocation Option, High Equity Option, 100% Equity Index Option, Social Choice Option, 100% Fixed-Income Option, Principal Plus Interest Option and the Money Market Option. Effective February 18, 2008, transfers from the Principal Plus Interest Option to the Money Market Option will not be permitted. (If this restriction changes, investors will be notified prior to the effective date of any such change.)

• Review Investment Performance
• Underlying TIAA-CREF Funds - Institutional Class
• Fees and Expenses
• Read the CHET Disclosure Booklet and Participation Agreement (PDF, 2,144KB)

Changing Your Investments

Once you invest in a particular investment option, you can transfer contributions and any earnings to another investment option once per calendar year or upon a transfer of funds to a CHET account for a different beneficiary. Effective February 18, 2008, transfers (including transfers when there is a change of the Beneficiary) from the Principal Plus Interest Option to the Money Market Option will not be permitted. (If this restriction changes, investors will be notified prior to the effective date of any such change.) (See the CHET Disclosure Booklet and Participation Agreement (PDF, 2,144KB) for more information.)

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.

Investing in the Managed Allocation Option follows the method of using the number of years an investor has for saving to determine the appropriate investment allocation. The Managed Allocation Option is the core investment for the Connecticut Higher Education Trust. Although there is no guarantee that the investment objectives will be met, this option offers the opportunity to invest aggressively when the beneficiary is young, and over time, more conservatively, thus  creating a balanced approach. Aged-based investment portfolios combine equity, real estate, fixed income, and money market mutual funds offered by the TIAA-CREF Funds - Institutional Class. Younger beneficiaries will have a higher exposure to equities and real estate investments which will decrease significantly as they approach college age, as the following charts illustrate:

Allocations for all investments are as of January 2009. Allocations are reviewed and adjusted periodically.

Aggressive Managed Allocation Option

This Investment Option also invests in the same underlying Funds as the Managed Allocation Option. However, the initial contributions to this Investment Option are more heavily invested in equities and real estate than in the Managed Allocation Option.

The Aggressive Managed Allocation Option has a higher risk of losing principal than the Managed Allocation Option but is more likely to keep pace with rising tuition rates. In return for greater opportunity for reward, this investment also has possible heightened volatility. Thus, this Investment Option may be a good choice for investors who can tolerate greater risk and volatility in exchange for higher potential returns over time. It may also be appropriate for investors who already have substantial college savings in less volatile investments. This Option may also be considered by Account Owners who intend to pursue enrollment at a later than typical college entrance age.

Allocations for all investments are as of January 2009. Allocations are reviewed and adjusted periodically.

High Equity Option 

The High Equity Option provides a blend of domestic and international securities mutual funds which, may provide greater investment return opportunities over the long-term when compared to an investment option with lower exposure to equities. Given the higher volatility of this option, the risk of loss can be greater over a shorter investment horizon.

 Allocations for all investment options are as of January 2009. Allocations are reviewed and adjusted periodically.

100% Equity Index Option 

The Program allocates your contributions under this Investment Option among a combination of equity Mutual Funds in accordance with the investment policy adopted by the Trustee, after receiving guidelines recommended by the Program Manager.  The percentage of contributions that will be allocated to each of the Mutual Funds may be changed at any time by the Trustee.  The investment objective of this Investment Option is to provide the opportunity for long-term capital growth while avoiding the uncertainty associated with actively managed portfolios.  However, the value of your Account will fluctuate based on the performance of the Mutual Funds underlying this Investment Option. Please read the prospectus for the TIAA-CREF Funds - Institutional Class for more information.

Social Choice Option

The Program allocates 100% of your contributions, together with any return of your contribution, to the TIAA-CREF Social Choice Equity Fund, which invests primarily in equity securities of companies that meet certain social criteria, such as product safety, corporate citizenship, human rights and environmental performance. Because of the high exposure to domestic and foreign equities, and the corresponding degree of risk, this option may be appropriate for you if you have a long investment horizon and you can tolerate a higher level of risk.

100% Fixed-Income Option 

The Program allocates your contributions under this Investment Option between the TIAA-CREF Bond Fund and the TIAA-CREF Inflation-Linked Bond Fund in accordance with the investment policy adopted by the Trustee. The percentage of your contributions that will be allocated to each Fund may be changed by the Trustee at any time. The investment objective of the 100% Fixed-Income Option is to provide the opportunity for favorable long-term total returns through current income, while maintaining the goals of preserving capital and providing a degree of protection from inflation. Please read the prospectus for the TIAA-CREF Funds - Institutional Class for more information.

Principal Plus Interest Option

Contributions under the Principal Plus Interest Option are allocated to the Funding Agreement issued by TIAA-CREF Life. The current Funding Agreement is an insurance contract which provides the Program with a guaranteed return of principal and an annual minimum rate of return, with the opportunity for additional returns. The guarantee of a minimum rate of interest is made to CHET by TIAA-CREF Life Insurance Company, but is not made directly to the account owner or beneficiary. The rate of any additional returns is declared in advance by TIAA-CREF Life for a period of up to 12 months and is not guaranteed for future periods.  The minimum rate over the term of the Funding Agreement will not be less than 1% nor greater than 3% and will be reset each year beginning on July 1. Please refer to the disclosure booklet for more detailed information regarding the calculation of the minimum rate. This investment option provides stability that people may want for a portion of their college investment.

Effective July 1, 2010, accumulations under the Funding Agreement for the Principal Plus Interest Option as of June 30, 2010 as well as any contributions received and earnings on those contributions from July 1, 2010 until further notice, will be credited to the Program Trust with an effective annual interest rate of 2.50%, and are guaranteed to earn this rate through June 30, 2011, subject to the claims-paying ability of TIAA-CREF Life Insurance Company. Teachers Personal Investors Services, Inc. and TIAA-CREF Individual & Institutional Services, LLC, distribute securities products.

Money Market Option

The Money Market Option seeks to provide stability of principal by allocating 100% of contributions, together with any return of your contributions, to the TIAA-CREF Money Market Fund. Unlike the Managed Allocation Option where the allocation changes as your beneficiary approaches the age when he/she would generally be expected to enroll in an eligible educational institution, the Money Market Option will not be changed to reflect the age of the beneficiary. The Money Market Option is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal or state government agency. 

Underlying TIAA-CREF Funds - Institutional Class 

Following is the list of underlying TIAA-CREF Funds - Institutional Class. For the Managed Allocation, Aggressive Managed Allocation, High Equity, 100% Equity Index, Social Choice, 100% Fixed-Income, and Money Market options, an investment in CHET is not the same as a direct investment in the mutual funds. Please read the prospectus for the TIAA-CREF Funds - Institutional Class for more information.

Please read the prospectus for the TIAA-CREF Funds - Institutional Class before investing. However, keep in mind that an investment in the Connecticut Higher Education Trust is not the same as a direct investment in the underlying mutual funds.

The TIAA-CREF Institutional Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to maintain a stable net asset value of $1.00 per share, you can lose money by investing.

PDF files require the free Adobe Acrobat Reader. Get it here.