College savings plan assets grew about 9% to nearly $218 billion as of Dec. 31 from a year earlier, a report from Morningstar said.
The asset growth of the 85 U.S. 529 college savings plans Morningstar studied was split evenly between net inflows and market appreciation.
Direct-sold plans as of Dec. 31 had a 51.7% market share after growing faster than adviser-sold plans in 2014, up from 50.7% the previous year.
Virginia’s CollegeAmerica plan is still the largest 529 plan by a wide margin, with $50.8 billion in assets, a full 23.3% of the total market, as of Dec. 31; New York’s 529 College Savings Program Direct Plan is second with $19.8 billion, or 9.1% of the market.
Also, even though 529 investment options continue to have higher fees than open-end mutual funds, nearly half of the 85 plans studied by Morningstar reduced their fees in 2014, bringing that price gap down to 18 basis points, down from 40 basis points in 2010. Minnesota College Savings Plan made the greatest reductions of all plans in 2014, reducing fees by an average of 15 basis points.
The full report is available on Morningstar’s website.