Newest Savingforcollege.com Rankings Show Michigan with Top-Performing 529 Plan

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Quarterly performance rankings produced by Savingforcollege.com show the Michigan Education Savings Plan as providing solid investment returns to college savers, placing at the top of three-year performance rankings, and ranking in the top ten of one- and five- year performance as well.

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We find it notable that many of the best performers utilize higher cost, actively-managed funds in their investment portfolios.

The Michigan Education Savings Program (MESP) placed first among all direct-sold 529 plans in three-year investment performance as of December 31, 2012, according to Savingforcollege.com's newly-released 529 Composite Performance Rankings. MESP also scored well for one-year investment performance (second place) and for five-year performance (seventh place).

Michigan's 529 plan is managed by TIAA-CREF Tuition Financing Inc (TFI) and utilizes TIAA-CREF's institutional mutual funds in its investment portfolios.

The top one-year performer among direct-sold 529 plans was the resident-only version of the CollegeAccess 529 program in South Dakota, managed by Allianz Global Investors Distributors LLC, while Nevada's USAA 529 College Savings Plan scored best for five-year performance. For ten-year performance, Alaska's T. Rowe Price College Savings Plan ranked highest.

"We find it notable that many of the best performers utilize higher cost, actively-managed funds in their investment portfolios," remarked Savingforcollege.com founder Joe Hurley. "Certainly, the lowest-cost 529 plans that rely on passively-managed index funds or ETFs are well represented in our Top Ten lists, but they are not clearly dominant."

In producing its quarterly rankings, Savingforcollege.com compares the reported investment performance of a subset of portfolios from the 529 savings plans in every state. Portfolios are selected based on their mix of stocks, bonds, and money-market funds, aiming for an apples-to-apples comparison in seven different asset-allocation categories.

Hurley cautions, however, that past performance does not guarantee future returns, and that a plan currently ranking high will not necessarily outperform its peers in the future. "As you might expect, our one-year performance rankings are much more volatile from quarter to quarter as compared to our three-, five-, and ten-year rankings," he said.

The full reports showing rankings for all direct-sold 529 plans can be viewed at http://www.savingforcollege.com/articles/2012-plan-performance-rankings-q4 . Savingforcollege.com also produces separate rankings for advisor-sold 529 plans and for RIA-channel 529 plans, along with all underlying investment data, available through a subscription. Rankings are updated each quarter.

One-year Composite Performance Rankings (49 plans ranked)
1. South Dakota: CollegeAccess529 (Direct-sold) (multiple fund families)
2. Michigan: Michigan Education Savings Program (TIAA-CREF funds)
3. California: The ScholarShare College Savings Plan (multiple fund families)
4. Virginia: Virginia529 inVEST (multiple managers and fund families)
5. West Virginia: SMART529 WV Direct (mostly Hartford Funds)
6. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)
7. District of Columbia: DC 529 College Savings Program (Direct-sold) (Calvert funds)
8. Connecticut: Connecticut Higher Education Trust (CHET) (multiple fund families)
9. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)
10. Nevada: USAA 529 College Savings Plan (USAA funds)

Three-year Composite Performance Rankings (43 plans ranked)
1. Michigan: Michigan Education Savings Program (TIAA-CREF funds)
2. Virginia: Virginia529 inVEST (multiple managers and fund families)
3. New York: New York’s 529 College Savings Program – Direct Plan (Vanguard funds)
4. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)
5. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)
6. Pennsylvania: Pennsylvania 529 Investment Plan (Vanguard funds)
7. Oklahoma: Oklahoma College Savings Plan (TIAA-CREF funds)
8. Minnesota: Minnesota College Savings Plan (TIAA-CREF funds)
9. South Dakota: CollegeAccess 529 (Direct-sold) (multiple fund families)
10. South Carolina: Future Scholar 529 College Savings Plan (Direct-sold) (multiple fund families)

Five-year Composite Performance Rankings (42 plans ranked)
1. Nevada: USAA 529 College Savings Plan (USAA funds)
2. Utah: Utah Educational Savings Plan (UESP) Trust (mostly Vanguard funds)
3. Florida: Florida College Investment Plan (multiple money managers)
4. Kansas: Schwab 529 College Savings Plan (multiple fund families)
5. Pennsylvania: Pennsylvania 529 Investment Plan (Vanguard funds)
6. New York: New York’s 529 College Savings Program – Direct Plan (Vanguard funds)
7. Michigan: Michigan Education Savings Program (TIAA-CREF funds)
8. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)
9. Ohio: Ohio CollegeAdvantage 529 Savings Plan (mostly Vanguard funds)
10. Nevada: The Vanguard 529 Savings Plan (Vanguard funds)

Ten-year Composite Performance Rankings (9 plans ranked)
1. Alaska: T. Rowe Price College Savings Plan (T. Rowe Price funds)
2. Alaska: University of Alaska College Savings Plan (T. Rowe Price funds)
3. Virginia: Virginia529 inVEST (multiple managers and fund families)
4. Maryland: College Savings Plans of Maryland – College Investment Plan (T. Rowe Price funds)
5. Louisiana: START Saving Program (mostly Vanguard funds)
6. Iowa: College Savings Iowa (Vanguard funds)
7. South Carolina: Future Scholar 529 College Savings Plan (Direct-sold) (multiple fund families)
8. Nevada: The Vanguard 529 Savings Plan (Vanguard funds)
9. Rhode Island CollegeBoundfund (Direct-sold, Alternative RI) (mostly AllianceBernstein funds)

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