West Virginia college savings board removes investment in China-based companies
(The Center Square) – West Virginia Treasurer Riley Moore announced the West Virginia College and Jumpstart Savings Program will make the market investment option in its plan free of investments in China-based companies.
The college savings plan has $667 million under management with around $40 million of the SMART529 Plan currently invested in emerging markets, which include China. The decision came after a lengthy study that began in late 2021 of the impact of investments in Chinese companies.
“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,” Moore said in a statement. “I’m grateful to the Board members for carefully considering this recommendation to reduce exposure to these more risky Chinese investment options.”
NEPC, an investment consulting firm, advised board members that “ongoing geopolitical tensions between China and the U.S.” and China’s tendency to quickly shift domestic policies creates significant investment risks.
“China’s domestic policies can create periods of heightened volatility and it is possible that ongoing tensions could increase and negatively impact Chinese stocks,” NEPC said in a report submitted to the board.
