CHARLESTON, W.Va. (WBOY) — West Virginia is moving away from Chinese investments in the West Virginia College and Jumpstart Savings Programs’ SMART529 Select Plan.
State Treasurer Riley Moore, who also serves as the Chairman of the Board of Trustees for the savings program, announced in a press release on Wednesday that the board adopted his proposal to transition away from the emerging markets investment option to a fund that excludes investments in China-based companies instead.
The SMART529 Select Plan is a college savings program for families; students can use the funds for qualifying tuition, room and board and book expenses. Click here to learn more about it.
“We have a fiduciary duty to act in the best financial interests of SMART529 plan participants, and we believe excluding Chinese emerging market investments from our Select Plan portfolio will help maximize returns while reducing exposure to the potential regulatory and geopolitical risks that come with investing in companies based in China,” Treasurer Moore said in the release.
Emerging markets investments, depending on their risk profile, make up between zero to 10 percent of the SMART529 plan’s portfolios, according to the press release.
Dimensional Fund Advisors, which manages the SMART529 plan’s funds, created an emerging markets portfolio that did not include Chinese companies back in 2021, according to the release, which was shown to outperform the emerging markets fund that did include China.
Additionally, an investment consultant advised SMART529 board members that “ongoing geopolitical tensions between China and the U.S.” and China’s tendency to quickly shift domestic policies could be significant investment risks, the release said.
“This decision is in the best long-term financial interests of those individuals who choose to invest in a SMART529 Select Plan and the children whose educational future benefits from these funds,” Treasurer Moore said in the release.
More information about the SMART529 savings program’s investment options is available on its website.
