I reviewed several (not all, but most) of the 529 options offered in other states in a search for actively managed funds to consider. I came across the Virginia College Savings Plan^SM.  Virginia’s plan is administered by American Funds. That plan offers a fund called The Growth Fund of America^®. This fund is actively managed by Capital Research and Management Company for American Funds. According to Morningstar, Capital Research is “one of the industry’s most reputable active-management shops.”

The description is as follows (as of 22-Feb-2010): The fund’s objective is to provide you with growth of capital. Has the flexibility to invest wherever the best growth opportunities may be. Invests at least 65% of its assets in common stocks. May also invest in convertibles, preferred stocks, U.S. government securities, bonds and cash equivalents. May invest up to 15% of assets in securities of issuers domiciled outside the United States and Canada and not included in the S&P 500. May invest up to 10% of assets in debt securities rated below investment grade.

Source: https://www.americanfunds.com/funds/details.htm?fundGroupNumber=5&fundClassNumber=1000

Sounds like a real actively managed fund without too many restrictions on what type of assets the manager can buy. A mutual fund is only as good as its manager. According the Summary Prospectus dated 01-Nov-2009, this fund is managed by a board of counselors. The counselors have 5–28 years of experience with managing this fund.

Investment Counselors for CGFAX

For the last five years, this fund is ranked 228 out of 1,265 funds in this category, which means it outperformed 1,037 funds in this five-year period—not too bad. Finally, it has a reasonable expense ratio of 0.77% (according to the Summary Prospectus dated 01-Nov-2009). There is a front-end load of 5.75%. Not sure if everyone has to pay that or if it applies only to out-of-state participants. I will have to investigate that because a front-end load will have an effect on overall performance.

Rank in Category

Per Yahoo! Fiance (01-Nov-2009)

Ticker Symbol: CGFAX