Massachusetts 529 Plan Fees and Expense Ratios

Mark KantrowitzBy Mark KantrowitzBy Savingforcollege.com

Massachusetts 529 plans offer among the lowest fees of any direct-sold 529 college savings plans.

The total asset-based expense ratio for the Massachusetts U.Fund 529 plan portfolios run from 0.11% to 1.13%.

Program management fees are lower in the passively managed index fund portfolios (0.09%) than in the blended portfolios (0.14%) and actively-managed portfolios (0.20%). The bank deposit portfolio has a 0.10% program management fee.

Expense ratios for the underlying investments range from 0.02% to 0.05% for the index fund portfolios, 0.29% to 0.51% for the blended portfolios and 0.30% to 0.76% in the actively-managed portfolios.

The total expense ratios are 0.11% to 0.14% in the index fund portfolios, 0.43% to 0.65% in the blended portfolios and 0.50% to 0.96% in the actively-managed portfolios. The total expense ratio for the bank deposit portfolio is 0.50%.

The index funds are among the most popular in direct-sold 529 plans because they have the lowest expense ratios.

There are no enrollment fees, application fees or annual account maintenance fees.

Based on the Savingforcollege.com’s 529 Fee Study, the 10-year costs on a $10,000 investment in the direct-sold Massachusetts 529 plan range from a minimum of $141 to a maximum of $1,371. The Massachusetts 529 plan ranks 10th for lowest costs, behind Florida, Louisiana, Utah, South Carolina, Texas, California, Illinois, Arizona and Delaware.

Minimizing costs is the key to maximizing net returns. Investors should aim to keep total asset-based fees under 1%. Fidelity, the manager of the Massachusetts 529 plan, has been competing with TIAA and Vanguard to see who can charge the lowest fees. Massachusetts investors have benefited from this competition, as all Massachusetts 529 plan portfolios charge total asset-based fees well under 1%.


NEXT ARTICLE