West Virginia Moves Away from Chinese Investments in College Savings Program

West Virginia State Treasurer Riley Moore has announced a significant change in the state’s College and Jumpstart Savings Programs’ SMART529 Select Plan. The board of trustees has approved a proposal to transition away from investing in Chinese emerging markets and instead focus on a fund that excludes investments in China-based companies.

The SMART529 Select Plan is a college savings program designed to help families save for their children’s education expenses. Treasurer Moore emphasized the importance of acting in the best financial interests of plan participants by reducing exposure to potential regulatory and geopolitical risks associated with investing in Chinese companies.

According to the press release, emerging markets investments typically make up between zero to 10 percent of the SMART529 plan’s portfolios. Dimensional Fund Advisors, the firm managing the plan’s funds, had previously created an emerging markets portfolio that did not include Chinese companies in 2021. This portfolio was shown to outperform the fund that did include China.

An investment consultant also highlighted the ongoing geopolitical tensions between China and the U.S. as well as China’s unpredictable domestic policies as significant investment risks. Treasurer Moore stated that this decision is in the best long-term financial interests of plan participants and the children who will benefit from these funds for their education.

For more information on the SMART529 savings program’s investment options, individuals can visit the program’s website. This move away from Chinese investments reflects a strategic decision to maximize returns and minimize risks for plan participants in West Virginia.