I was just checking in on my son's 529 fund today and it's looking really sad. He's almost six years old and the average return since we started investing is 4.13%. Over the same period Vanguard's VTMSX seems to have gone up almost 50%. We only put in $100 per month, and it's up to about $7,000 now, so it's not a huge issue for me, but does this even make any sense? Can I possibly be reaping enough tax benefits to make this a better idea than just putting that money in an index fund and taking it out later when he needs it?
Our fund manager is the West Virginia Select 529. They don't seem to have any better options for us to switch to, but I have considered switching to Wisconsin's fund, since I live in Wisconsin and would get some tax benefits for that and also their fund seems to be better managed, with a 6% return over that same period that we have gotten a 4% return. What do you think?