Savingforcollege.com released its list of the top-rated 529 plans based on their flexibility, costs, investment performance and additional economic benefits such as tax incentives. There are 17 plans in its 5-cap list, two each in Colorado, Nebraska and South Carolina.
(Related: 16 Best & Worst 529 Plans of 2016: Morningstar)
Most are sold directly to savers but two are advisor-sold plans: the Nebraska Education Savings Trust, Advisor College Savings Plan and the Future Scholar 529 College Savings Plan (Advisor-sold) plan. Their direct-sold affiliates also made the 5-cap list.
Four of the top-rated 5-cap funds also placed among the top 10 performing 529 funds for the first 12 months through the first quarter, and they are all directly sold to consumers: Smart 529 VW (West Virginia) Direct College Savings Plan, University of Alaska College Savings Plan; Edvest (Wisconsin) and NextGen College Investing Plan – Client Direct Services (Maine). The West Virginia, Alaska, and Maine plans also placed in the top 10 performing funds over five years.
The rankings are based on apples-to-apples comparisons of funds’ allocations among stocks, bonds and short-term instruments that are then averaged to produce a composite percentile ranking.