California ScholarShare 529 Plan Strengthens Performance and Reduces Fossil Fuel Exposure with New Vanguard Fund Selection
FOR IMMEDIATE RELEASE: Thursday, January 29, 2026
Contact: Quinn Eide, quinn@fossilfreeca.org
Sacramento, CA — January 29, 2026 —The ScholarShare Investment Board (SIB), under the California State Treasurer’s Office, recently announced a significant update to the ScholarShare 529 College Savings Plan investment lineup, replacing Nuveen Large Cap Responsible Equity Fund with the Vanguard FTSE Social Index Fund. The change improves long-term performance potential for families while reducing fossil fuel exposure by more than sixfold within ScholarShare 529’s investment options.
The Nuveen Large Cap Responsible Equity Fund previously represented between 10-56% of the equity allocation in ScholarShare 529’s enrollment year portfolios. Following a comprehensive annual review, the SIB determined that Vanguard’s FTSE Social Index Fund offered stronger historical performance and lower fees. As a bonus, the FTSE fund addition meaningfully reduces fossil fuel exposure in response to multiple public comments requesting this change.
According to the annual review, Vanguard demonstrated the strongest absolute and relative performance among evaluated ESG equity options over most measured periods, alongside a Morningstar 4-Star/Silver rating, compared to lower ratings for other candidates. Vanguard also offers the most competitive fee structure at 7 basis points, significantly below Nuveen’s 17 basis points.
The update was presented as part of Agenda Item 6 at the SIB Board meeting, including the 2026 Asset Allocation Recommendation, Annual Review Memo, and Sustainability Review. Of the reviewed ESG funds, Vanguard’s FTSE fund emerged as the strongest overall option when evaluating performance, volatility, fees, and fossil fuel exposure together.
“The ScholarShare Investment Board has a responsibility to ensure California families have access to strong, affordable, and well-diversified investment options,” said California State Treasurer and Chair of the SIB Fiona Ma, CPA. “This update reflects the Board’s careful, data-driven review of performance, fees, and long-term risk, resulting in an investment choice that strengthens ScholarShare 529’s competitiveness while supporting California’s broader efforts to reduce reliance on fossil fuels, all while maintaining rigorous fiduciary standards.”
“Our responsibility is to ensure ScholarShare 529 delivers strong, affordable investment options that reflect California’s values while meeting our fiduciary obligations,” said ScholarShare 529 Executive Director Cassandra DiBenedetto. “This update improves long-term performance potential, lowers fees for families, and reduces exposure to the volatility and long-term risks associated with the fossil fuel industry — consistent with California’s broader efforts to reduce reliance on fossil fuels. Importantly, it does so without sacrificing diversification or the rigorous investment standards families expect from the plan’s largest equity allocation.”
Advocates for fossil-free college savings welcomed the move as a major milestone.
Quinn Eide, Fossil Free California:
“This is meaningful progress for California families who want their college savings to fund education, without bankrolling the biggest perpetrators of climate change. Removing Nuveen’s large-cap fund—which dominated ScholarShare’s age-based portfolios—shows that the Treasurer Ma is listening and acting. We look forward to continued collaboration to fully align ScholarShare 529’s ESG options with fossil-free best practices.”
Katharine Bierce, Fossil Free California volunteer:
“I’ve lived through the “orange skies” of California in 2020. I’m inspired to see California taking the lead in lowering fossil fuel exposure in ScholarShare’s investment choices – which will also lower fees for Californians, too.”
Advocates note that additional opportunities remain to further strengthen ScholarShare 529’s ESG offerings, including reviewing remaining non-fossil-free equity and bond funds within the ESG age-based options. Currently, no state in the country has an age-based option that is completely fossil-free. This fund is a meaningful step forward for both families in California and families across the country as Americans are not restricted to their home-state’s plan.
For more information about the ScholarShare 529 College Savings Plan, visit: www.scholarshare529.com.
For more on the Fossil Free 529 campaign, visit: fossilfreeca.org/fossil-free-529-college-savings.
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