To augment both of your points, Kralon and Z, one can allocate their own index
fund mix in the My529 plan (I know because I'm actively contributing to
it). I agree with both of you that index funds are the most attractive option
with historically the best yield.
@Kralon, an index fund has a different focus than a tax-advantaged college
investment fund. You are correct that for general investing, an index fund is
often the best way to go. But there are specific tax advantages surrounding 529
plans when the money is used specifically for education, which boosts their
Not withstanding the data presented in the article, $13 billion is a very small
fund and should not be actively managed. The fees would best be minimized by
investing in market index funds.I have worked at brokerage firms,
hedge funds and mutual funds. All of them traded more than $13 billion per day
and only one was considered a large fund.The odds are against
Utah's college saving plan continuing to be competitive. Index funds would
provide a reasonable return with less cost and lower risk, especially if market
index fund diversification and a small amount of contrary hedging is used.