Morningstar, which ranks mutual funds, also has ratings for 529 college savings plans. Here are the designated class acts among plans that you buy directly:
- Utah Educational Savings Plan. Not only does it offer low-cost Vanguard index funds, Utah keeps total costs down by charging only 0.25 percent for administration.
- Michigan Education Savings Plan. This is the cheapest of the plans managed by TIAA-CREF. The mix of funds is solid, a real estate fund adds diversification, and many age-based options are offered.
- Alaska T. Rowe Price College Savings Plan. T. Rowe Price’s steady, reasonably priced funds make it a standout among actively managed funds in the 529 world.
On the other hand, about 80 percent of 529 plan assets are invested through financial advisors. Here are Morningstar’s picks for broker-sold funds:
- Virginia CollegeAmerica. Consisting of 21 funds from American Funds, brokers are able to craft well-diversified portfolios that meet their clients’ needs.
- Kansas Learning Quest Education Savings Program. There are three investment tracks–conservative, moderate, aggressive–each of which includes seven age-based portfolios, managed by American Century funds.
- Colorado Scholars Choice College Savings Program. Managed by Citigroup, the plan has equity funds from Salomon Smith Barney, a bond fund from noted fixed-income manager BlackRock, and a foreign fund advised by American Funds.
