- 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.
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: