#42425 - 01/17/08 03:24 PM
Savingforcollege.com's 529 Fee Study?
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Joe Hurley
Registered: 01/07/00
Posts: 2080
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Mirror, mirror, on the wall: Who’s the cheapest of them all? Find the answer to that question with our newly updated 529 Fee Study which compares the 10-year cost charts of all direct-sold 529 plans. We’ve compiled the lowest cost options in each 529 plan, the highest cost options, and two options in between.
The “winners”, if you want to look at it that way, are the residents of Louisiana and Utah who can tap into the fixed-income funds managed by their respective state treasurers at essentially no cost. The rest of us don’t have those super-cheap options available, and besides, we may not want to invest all our college savings in fixed-income investments.
But you can find plenty of low-cost options with underlying investments in equities. Of course, you’ll want to avoid annual account fees if possible, as those can push up the costs quite significantly, especially on low-balance accounts.
We haven’t quite figured out a way to place an overall ranking on the plans. Would we base it on the lowest cost options or highest cost options? How would we distinguish resident-only fee structures from nonresident fee structures? Instead, our goal is simply to give you a good sense for the costs among competing 529 plans, without overcomplicating the analysis.
As you might expect, the lowest cost options tend to be those that use index funds as underlying investments, those that keep their program management costs very low, and those that do not charge an annual account fee.
I know I’ll get some pushback on this, but remember, the lowest costs don’t necessarily lead to the highest returns. Many 529 plans use actively-managed funds, which tend to be significantly more expensive than index funds, and which attempt to outperform the indices. Your selection of a 529 plan should not be based solely on costs, but also on the quality of the investment management, the asset allocation and risk profile of the portfolios, state tax and other benefits, and a host of other factors.
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Edited by Joe Hurley (01/17/08 03:27 PM)
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#42823 - 02/27/08 03:02 PM
Re: Savingforcollege.com's 529 Fee Study?
[Re: Joe Hurley]
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JohnnyC
Registered: 02/19/08
Posts: 7
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Hi Joe. When will the updated 529 Performance Rankings be posted? The site says they are updated quartely. Thanks.
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#42825 - 02/27/08 08:17 PM
Re: Savingforcollege.com's 529 Fee Study?
[Re: JohnnyC]
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Joe Hurley
Registered: 01/07/00
Posts: 2080
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Doing final review and hoping to post mid-next week.
Joe
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#43101 - 04/15/08 07:02 PM
Re: Savingforcollege.com's 529 Fee Study?
[Re: Joe Hurley]
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Quandt61
Registered: 11/16/07
Posts: 4
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In evaluating plans with your Plan Composite Performance Rankings, performance/rank/plan scores are stated for NAV, which I would presume is Net Asset Value. Is this net of all expenses/fees? The same factors are listed for POP 1 year and 3 years. What is POP?
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#43102 - 04/15/08 07:03 PM
Re: Savingforcollege.com's 529 Fee Study?
[Re: Quandt61]
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Quandt61
Registered: 11/16/07
Posts: 4
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When will 1st Quarter '08 results be posted?
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#43103 - 04/16/08 07:05 AM
Re: Savingforcollege.com's 529 Fee Study?
[Re: Quandt61]
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Joe Hurley
Registered: 01/07/00
Posts: 2080
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Performance is net of asset-based expenses and fees. Enrollment fees and annual account maintenance fees, if any, are not factored in. POP refers to performance after factoring in maximum sales charges and is applicable to 529 plans sold through financial advisors/brokers.
Joe
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#43104 - 04/16/08 07:06 AM
Re: Savingforcollege.com's 529 Fee Study?
[Re: Joe Hurley]
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Joe Hurley
Registered: 01/07/00
Posts: 2080
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Q1 performance rankings are targeted for mid-May release.
Joe
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