The Section 529 college savings plan that Wells Fargo Funds Management LLC manages for Wisconsin performed the best of the nation's 35 adviser-sold plans over the past year, according to ratings by Savingforcollege.com.
The Wisconsin tomorrow's scholar program — which has $978 million in assets and has set up accounts for 68,000 students — also tops the adviser-sold chart of 529 plans for performance over the past three years and ranks second over five years.
The ranking was handled by Savingforcollege.com, which tracks the universe of 529 plans. The website issues a quarterly ranking based on an analysis of investment performance across portfolios. It separates adviser-sold plans from direct plans and ranks each over three investment periods.
“The Wisconsin plan scored really well, based primarily on its asset allocation options,” explained Joe Hurley, who is the founder of Savingforcollege.com.
“They have a bunch of options that are a blend of funds to achieve a particular asset allocation,” such as income, moderate growth, etc., he said.
The tomorrow's scholar plan offers three age-based investment options and seven portfolios that incorporate mutual funds from Wells Fargo Advantage Funds, Columbia Management Investment Advisers LLC, Harbor Capital Advisors Inc. and ING Investment Management.
The 10-year-old plan offers state tax incentives for investors in Wisconsin and is marketed outside of the state, as well. About 95% of its assets come from non-Wisconsin investors, said Sarah Henriksen, Wells Fargo Fund Management's 529 product development manager.
The plan's success comes, in part, from choosing a great lineup of funds from multiple vendors, she said. Ten of the 13 funds that make up the portfolio beat their benchmarks, and the Harbor International Fund and the Wells Fargo Advantage Growth Fund were two of the biggest winners, Ms. Henriksen said.
“The plan is slightly overweight on midcap and small-cap funds, sectors that have helped the portfolios as a whole,” she said.
The Wells Fargo plan ranked second over the five-year period, behind an adviser-sold plan managed for Arizona by Waddell & Reed Inc.
Legg Mason's plan for Colorado and a Michigan 529 plan managed by TIAA-CREF Tuition Financing Inc. and Allianz Global Distributors LLC ranked second and third, respectively, among adviser-sold plans with a one-year performance data, according to Savingforcollege.com.
Meanwhile, assets in 529 plans overall continued to rise.
Total assets in 529 plans jumped to $146 billion through March 31, a 5.8% increase from the end of December, according to data released last week by Financial Research Corp.
Over the 12-month period through March, 529 assets grew 18.5%, compared with a 17.3% annual boost in long-term mutual fund and ETF assets, which increased to a combined $9.4 billion, from $8 billion, the FRC data show.
E-mail Liz Skinner at [email protected].
