Pennsylvania 529 Investment Direction

<p>They just sent a notice that all of the "percentage allocation" funds are going to shift some dollars from domestic stocks to foreign stocks, effective February 17. The bond percentage doesn't change. Does this seem like a good idea? It seemed odd because recently my own domestic mutual funds have done better than the foreign one.</p>

<p>Is this the investment or guaranteed savings plan? I have money in the latter, and while it was (is?) a bit Ponzish, where they invest doesn't directly affect the value. If I recall correctly, Vanguard now manages the non-prepaid "investment" side, and they should have several funds, some of which are based on years-left, and become more and more conservative. I don't know how the fees changed in the investment plan, but for the guaranteed, they increased significantly when they became underfunded. If the fees for your fund is high, it would be worth comparing with other options, some of which may offer the same funds at a lower rate, but I confess I haven't looked into this recently.
savingforcollege.com used to be an informative site and forum when I was more involved about ten years ago, and they may still be.</p>

<p>Is it simply a case of re-balancing to maintain X% in foreign investments? For example, if their ideal portfolio allocation is 60% domestic, 40% foreign, due to (hypothetical) gains in the US and losses in the foreign portion they might now be 65% domestic and 35% foreign, so they move funds from US to foreign investments to get back to the 60/40 ratio. Some funds work that way.</p>

<p>Thanks, dad<em>of</em>3 (I am, too), and NJres. These are investment plan funds managed by Vanguard, and when I looked again only 3 of the 4 are increasing the target X% in foreign stocks, i.e., they are not simply re-balancing. Will look at that other site.</p>