South Dakota and Kansas Have Best 529 Plans
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)