Missouri’s college savings plan ranks fourth in performance
The Missouri Saving for Tuition Plan ranked fourth in investment performance last year among similar college-savings plans, according to a report by SavingForCollege.com. The state-sponsored investments, generically known as 529 plans, are a tax-advantaged way to save for college.
Among 53 plans that are sold directly to the public (some states have more than one), only offerings from Florida, South Carolina and Utah ranked ahead of the Missouri plan. Illinois’ Bright Start program was No. 37. To compile the rankings, SavingForCollege.com looked at a subset of portfolios within each plan, making what it called “an apples-to-apples comparison in seven different asset-allocation categories.”
Because of changes within the programs, neither Missouri’s plan nor Illinois’ could be ranked on its 3-year or 5-year performance.
The rankings do not disclose overall returns for last year. Separately, though, Bloomberg reports that 529 plans’ assets shrank by $23.4 billion, or 21 percent, last year, mostly as a result of stock-market losses.
(2 votes, average: 4.5 out of 5)
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
At the end of 2008 I lost all my earnings and was down on my principal when I had to close my account due to the economy.
Strange article. What’s the point? Best of the worst? Have lost approximately 30% in our MOST account. That’s better than losing 50% like the rest of the market, but the MOST isn’t heavily into stocks, so I would expect its losses to be lower.
The MOST program deserves lots of credit for predominantly offering Vanguard funds (which have the smallest fees ). Many other states instead choose other mutual funds, allowing these fund managers to siphon off larger fees while not providing performance any better than an index fund. Also if you don’t like the risk inherent in stocks, you can choose the portfolios that are 100% in bonds… MOST allows you to choose between 100% in stocks all the way to 0%.
As with every other plan, the performance of a MOST account depends primarily on the selection by the participant of the relative proportions of stocks, bonds, and cash equivalents in the account. Anybody who doesn’t understand that is really financially naive and had better savvy up before they are once again “surprised” to see their investments in stocks periodically drop.
Beyond that, the long-term performance is likely to be better in those accounts with the lowest fees, such as the self-directed accounts with Vanguard that are offered by MOST and other 529 plans that put the interests of participants above those of brokerage firms attempting to sell 529 plan investments for big commissions.