The Markets August 24, 2011

South Dakota and Kansas Have Best 529 Plans

Savingforcollege.com released its 529 Plan Composite Performance Rankings for the second quarter.  
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Kansas’ Schwab 529 College Savings Plan was first among all direct-sold 529 plans in three- and five-year investment performance as of June 30, 2011, but did not place among the top 10 plans for one-year performance.

South Dakota’s CollegeAccess 529 plan, available on a direct-sold basis only to residents of South Dakota, placed first in the one-year performance category.

“The results suggest that 529 plans using actively-managed funds can compete effectively with those programs relying exclusively on lower-cost index funds,” said Joseph Hurley, founder of Savingforcollege.com. Many states have switched to index funds in recent years in their efforts to shave expenses for plan participants; however, the 529 plans cited above have a substantial portion of their assets invested in actively-managed funds.

Hurley cautions that past performance does not guarantee future returns, and that a plan currently ranking high will not necessarily outperform its peers in the future.

The full reports showing one-year and three-year rankings for all direct-sold 529 plans can be viewed here.

Savingforcollege.com also produces rankings for adviser-sold 529 plans along with all underlying investment data, available through a subscription. Rankings are updated each quarter.

One-year Composite Performance Rankings (48 plans ranked) 

1. South Dakota: CollegeAccess 529 (Multiple fund families)

2. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)

3. Maine: NextGen College Investing Plan — Client Direct Series (Multiple fund families)

4. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)

5. Maryland: College Savings Plans of Maryland — College Investment Plan (T. Rowe Price funds)

6. Vermont: Vermont Higher Education Investment Plan (TIAA-CREF funds)

7. Utah: Utah Educational Savings Plan (UESP) Trust (Vanguard mutual funds)

8. Oklahoma: Oklahoma College Savings Plan (TIAA-CREF funds)

9. Michigan: Michigan Education Savings Program (TIAA-CREF funds)

10. Rhode Island CollegeBoundfund (Direct-sold, Alternative RI) (AllianceBernstein mutual funds)

Three-year Composite Performance Rankings (45 plans ranked) 

1. Kansas: Schwab 529 College Savings Plan (Multiple fund families)

2. Wisconsin: EdVest (Direct-sold) (Mostly Wells Fargo funds)

3. Maryland: College Savings Plans of Maryland -- College Investment Plan (T. Rowe Price funds)

4. Michigan: Michigan Education Savings Program (TIAA-CREF funds)

5. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)

6. New Jersey: NJBEST 529 College Savings Plan (Franklin Templeton funds)

7. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)

8. New York: New York's 529 College Savings Program -- Direct Plan (Vanguard funds)

9. West Virginia: SMART529 Select (Dimensional Funds)

10. Utah: Utah Educational Savings Plan (UESP) Trust (Vanguard mutual funds)

Five-year Composite Performance Rankings (36 plans ranked) 

1. Kansas: Schwab 529 College Savings Plan (Multiple fund families)

2. Michigan: Michigan Education Savings Program (TIAA-CREF funds)

3. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)

4. Maryland: College Savings Plans of Maryland -- College Investment Plan (T. Rowe Price funds)

5. Nevada: The Vanguard 529 Savings Plan    (USAA mutual funds)

6. Wisconsin: EdVest (Direct-sold) (Multiple fund families)

7. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)

8. Utah: Utah Educational Savings Plan (UESP) Trust (Vanguard mutual funds)

9. Virginia: Virginia Education Savings Trust (VEST) (Multiple fund families)

10. Ohio: Ohio CollegeAdvantage 529 Savings Plan (Vanguard mutual funds)

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