It seems counterintuitive that one of the largest bull cycles in modern history would result in flat or negative returns. Is this due to the 529's limited investment vehicles...? At that point, wouldn't you be better off putting the funds into a taxable account instead?
529s are not really worth it unless you have need for additional tax shelter (owning broad-market mutual funds is already relatively "tax advantaged" if you buy and hold) OR you can get tax write-offs for contributing (which is true in some states).
As with all investments, when you get in and when you get out can affect total return, even though you can't time it perfectly.
The problem with 529s is you can't really "choose to let it ride" when college starts, whereas with retirement you DO have that option (by using other funding sources).
Unfortunately the way the college racket is setup, it's often much better to simply be a paper pauper when the FAFSA comes around (hint: they ignore the house and the car(s)).
If their historic allocation was similar to their current one, it's no surprise; its a very bond heavy vehicle and bonds over the last decade have had basically non-existent interest rates.
Most 529 plans are target date funds timed to when you start college. So it lost a lot of money when the pandemic hit and then moved into its very conservative phase as the market recovered. It also took a big hit in 2008 though I was only a few years into investing at that point.
