This article is part of Virginia529’s “Three Things to Know” Investment Portfolio series, highlighting the more than 20 portfolio choices available to Invest529 customers. The information presented is an overview of the plan’s investment options and should not be considered advice. Before selecting a portfolio consider factors such as the age of your child and your tolerance for risk. Past performance is no guarantee of future results. 

Specialty portfolios are those that don’t fall into other Invest529 investment categories. These portfolios have specific, alternative investment strategies built on a mix of domestic and international stocks. Invest529 offers two specialty portfolios – ESG and Global Equity.

What is ESG Investing? 

ESG investing measures how investments or companies perform in the categories of Environmental, Social, and Governance. Sometimes called “socially responsible investing,” the concept is intended to create investment options that offer competitive returns for customers while also focusing on long-term impacts on the environment and society.  

ESG seeks to include investments companies that respect the environment, have strong governance, ethic business dealings, and a good relationship within their communication. Efforts are made to avoid investments in companies with negative impacts (e.g., poor environmental record or labor practices).

Specific ESG criteria varies between different organizations. The Invest529 ESG Core Equity Portfolio invests entirely in the Parnassus Core Equity Fund. The fund invests in companies with attractive long-term performance expectations, while taking ESG factors into account. Related: Invest529’s ESG Core Portfolio

What is a Global Equity Portfolio? 

A global equity portfolio seeks the best investments from around the world, including the United States. This mix allows for a variety of investments and investment strategies in different economic climates. Global equity funds, with their diversified portfolio, are designed to reduce impact of market fluctuations and have a strong growth potential.

Global portfolios can focus on a single asset allocation or have many asset allocations. The Invest529 Global Equity Portfolio has a fixed asset allocation of 100% equity. Half of the portfolio is domestic equity while the other half is international and small-cap global equity. This combination of asset allocations lessens the impact of international market volatility. Related: Invest529’s Global Equity Portfolio

How have ESG & Global Equity Portfolios performed? 

ESG portfolios have performed mostly in line with the S&P 500 (the stock market index that tracks the stocks of the 500 largest U.S. companies—the benchmark of the overall market).

The Invest529 Global Equity Portfolio has been strong since its inception in 2019, outperforming custom benchmarks.

Key Takeaways:

• ESG investing offers competitive returns for customers while pursuing a socially responsible or ethical investment strategy. 
• Global Equity Portfolios seek the best investments from around the world, including the United States, for long-term growth.
• Invest529’s ESG portfolio generally performs in line with the S&P 500 while the Global Equity portfolio outperforms custom benchmarks.

Review Invest529’s Specialty Portfolios

Low fees, tax advantages and diverse investment options are reasons Invest529 is consistently ranked among the top 529 plans by independent sources.

The examples above are provided for illustrative purposes only and are not intended to reflect or predict the actual performance of any specific investment. Virginia529 cannot and will not provide legal, financial, or tax advice, and nothing herein or in any other written materials shall be construed as such.

For more information on Virginia529’s college savings options, visit Virginia529.com or call 1-888-567-0540 to obtain program materials. These include information on Virginia529 programs, investment objectives, risks, charges, expenses and other important information; read and consider them carefully before investing. Virginia529 encourages prospective participants to seek the advice of a professional concerning any financial, tax or legal implications related to opening an account. For residents of states other than Virginia: before investing, you should consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protections from creditors that are only available for investments in that state’s qualified tuition program. ©2024 Virginia College Savings Plan. All Rights Reserved.