Data & Research October 6, 2010

Many Saving for College Have Never Heard of 529 Plan

Half of respondents who don’t participate in a 529 plan say they have never even heard of the increasingly popular college savings vehicle.
Reported by

In a recent poll sponsored by higher education lender Sallie Mae, nearly half of those not saving for college do not know how (18%) or are not sure which are the best college savings options (28%).

Among all respondents saving for their childrens’ college expenses, the average amount saved for college in retirement accounts is $6,503, compared to $3,340 in 529 plans.  

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The announcement said sixty percent of respondents use at least two savings vehicles, and the number of options utilized increases with income. General savings accounts and CDs are the most popular (50%) followed by investment accounts (34%). Eight percent save through a college savings rewards program.

“The good news is that savers start early and plan to save enough to cover two years at a public university or one year at a private one,” said Albert L. Lord, vice chairman and CEO, Sallie Mae.

Sixty percent of parents have saved for their child’s college education, about the same as last year despite the difficult economic environment, and are on track to save $48,367 on average by the time their child turns 18.

Twenty percent of respondents named college savings as a top saving priority, according to the announcement.

The Markets October 6, 2010

U.S. REITs See Better 2010 Return than Broader Equity Market

Real Estate Investment Trust (REIT) returns were nearly five times greater than those of the broader U.S. equity market in the first three quarters of 2010.
Reported by

According to the National Association of Real Estate Investment Trusts (NAREIT), the FTSE NAREIT Equity REIT Index delivered a 19.1%-total return and the FTSE NAREIT All REITs Index delivered an 18.5%-total return for the period, compared to 3.89% for the S&P 500. On a 12-month basis ended September 30, REITs nearly tripled the returns of the broader market, with the FTSE NAREIT Equity REIT Index delivering a 30.28%-total return and the FTSE NAREIT All REITs Index delivering 28.27%, compared to 10.16% for the S&P 500.  

A NAREIT news release said the Apartments sector was the top performing segment of the U.S. REIT market in the first nine months of the year with a 32.83%-total return. Other top performing segments were Free-Standing Retail facilities, up 29.99%; Diversified REITs, up 23.07%; Self-Storage REITs, up 22.34%; Regional Malls, up 21.86%; and Lodging/Resorts, up 19.12%.  

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REITs also performed well for yield-seeking investors in the first nine months of the year, according to the announcement. The cash dividend yield of the FTSE NAREIT All REITs Index on September 30 was 4.55%, and the cash dividend yield of the FTSE NAREIT Equity REIT Index was 3.78%, compared to a 2.52% yield for 10-year U.S. Treasuries and 2.03% for the S&P 500.  

NAREIT said a primary factor driving the share performance of REITs is the fact that the REIT industry significantly recapitalized itself through its access to the public equity and debt markets in 2009 and through the first nine months of this year – sources of capital that were unavailable to private equity real estate funds.  

REITs raised $34.7 billion in 130 equity and debt offerings in 2009 and $32.5 billion in 131 offerings through the first nine months of this year, including $14.9 billion this year in 69 secondary equity offerings and another $1.6 billion in eight IPOs. REITs have used the proceeds of the offerings to pay down debt and begin to make strategic acquisitions of properties. The debt ratio of the FTSE NAREIT Equity REIT Index (debt as a percentage of total market capitalization) currently stands at 43.5%, down approximately one-third from 66.3% at the REIT market’s trough in March 2009. 

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