BOSTON (MainStreet) -- Across the country, states are offering college savings vehicles known as 529 plans.

Similar to 401(k) plans, the offerings allow money to be invested on behalf of a child's college expenses. Like a retirement plan, contributions benefit from compound interest.

Morningstar (Stock Quote: MORN), a leading provider of independent investment research, has issued its annual research study and ratings based on an analysis of the nation's largest 529 plans.

Its mutual fund analysts evaluated the quality of the portfolio of investment options; the investment options' performance; the skill of the options' managers; the stewardship practices of the 529 plan's administration; and the costs associated with the plan. They then assign ratings of "Top," "Above Average," "Average," "Below Average," and "Bottom." 529 plans getting a "Top" rating incorporate the industry's best practices, including solid investment choices at a fair price.

Six plans got "Top" ratings this year: Alaska's T. Rowe Price College Savings Plan and the Maryland College Investment Plan, managed by T. Rowe Price (Stock Quote: TROW); Nevada's The Vanguard 529 Savings Plan, managed by Upromise; Ohio's CollegeAdvantage 529 Savings Plan, managed by Ohio Tuition Trust Authority; Utah Educational Savings Plan, managed by the agency of the same name; and Virginia's CollegeAmerica, managed by American Funds.

Participants can invest with any of the geographically based and municipally managed plans, although certain tax breaks and incentives may not apply to out-of-state residents.

Morningstar focused on 58 plans that together manage more than 95% of the $133 billion in U.S. 529 plan assets. Of the plans reviewed, 15 got "Above Average" ratings, 30 were designated "Average" and seven "Below Average."

"Overall, the 529 industry has grown more competitive and responsive to college savers' needs over the past year," said Laura Pavlenko Lutton, editorial director for fund research at Morningstar and a lead author of the study, in a statement. "Plans have lowered fees, offered better investment options and expanded distribution choices. None of the plans we reviewed this year warranted a 'Bottom' rating."

The 2011 529 College Savings Plans Research Paper and Industry Survey also compared the performance and fees of 529 investment options and quantified the tax benefits associated with each state's 529 plans.

Among the other findings by Morningstar in this year's report:

  • 529 plan assets increased by 12% over the previous 12 months (through Sept. 30). That growth outpaced market returns for the period.
  • Conservative allocation options in 529 plans gained the most in asset flows during the first nine months of 2011 among Morningstar's static-allocation categories.
  • Virginia had the most 529 plan assets of any state, with more than $29 billion in its adviser-sold and direct-sold plans.
  • "Open architecture" plans -- which include a variety of asset managers' funds in their offerings -- did not have a consistent performance edge during the past year over "closed architecture" plans, which feature just a single firm's portfolio strategies.

This is the eighth year Morningstar has reviewed 529 plans and the second time it has provided analyst tatings on them as well as ratings on the investment options within them.

The full survey can be found here.

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