Punta Gorda City — Representatives from Garcia Hamilton told the Punta Gorda Employees' Retirement System Board of Trustees that the plan’s fixed‑income sleeve has produced positive returns this year but is positioned defensively, and Mariner-affiliated consultant Jack Evitt recommended the board consider adding a second core bond manager.

Garcia Hamilton representatives said the account is overweight agency mortgage‑backed securities and underweight corporate credit, a stance they said has added value as corporate spreads remain tight. “If you look at how we're positioned today, we have a pretty significant underweight to corporate bonds because corporate bonds are not adding a lot of value right now,” Garcia Hamilton said. They noted month‑to‑date and quarter‑to‑date gains and said the portfolio’s duration is longer than the benchmark to capture anticipated declines in interest rates.

The briefing matters to city retirees and active employees because the total fund is in the tens of millions of dollars and fixed income is the plan’s primary income source. Jack Evitt, the plan’s investment consultant, told trustees that Garcia Hamilton’s approach — which actively anticipates interest‑rate moves rather than remaining duration neutral — has at times led to underperformance when the firm’s timing missed the market. Evitt recommended the trustees consider adding a duration‑neutral core or core‑plus manager to reduce the portfolio’s exposure to timing risk and to provide a reallocation option if Garcia’s strategy does not meet expectations.

Garcia Hamilton described three sources of alpha in its strategy: interest‑rate positioning, sector rotation and yield‑curve shape. The firm said it currently favors mortgage‑backed securities for their convexity and relative value, holds a low allocation to corporate credit (all investment‑grade, A‑ or better, in the presentation), and has positioned duration to benefit from an expected decline in rates. Garcia reported performance snapshots in the presentation book: performance as of 06/30/2025 showed modest gains; later slides cited performance as of 08/31/2025 of roughly 43 basis points month‑to‑date, 47 bps quarter‑to‑date and about 120 bps year‑to‑date on the fixed‑income sleeve (figures presented by Garcia Hamilton during the meeting).

Evitt summarized the plan‑level picture: the total fund rose from about $59 million at the start of the quarter to roughly $62.5 million by quarter end; fiscal‑year returns were strong, and the plan ranked ahead of its total‑fund peer median for the quarter in the consultant’s reporting. Evitt also said Garcia’s near‑term timing calls have been “early by more than a little bit” over the last several years, contributing to relative underperformance in the most recent three‑year window. Trustees and the consultant discussed tactical steps including reducing or reallocating portions of the fixed‑income allocation.

Trustees agreed there was value in identifying alternate managers. The chair directed the consultant to bring candidates to the next meeting for consideration of a new core/core‑plus allocation funded from existing managers (Evitt suggested a potential reallocation of approximately $6 million currently held with Prudential and Credit Suisse into a new core manager as an initial option). That request was framed as a direction to present a search and recommendation rather than as a binding commitment to transfer assets.

Trustees asked questions about mortgage‑backed securities risks, the agency guarantee and prepayment dynamics; Garcia Hamilton explained that the portfolio’s agency MBS holdings are agency‑guaranteed and that, under the current pricing environment, prepayments and positive convexity can enhance returns. The firm also reviewed corporate spread levels (presented at roughly 75–80 basis points in the presentation) and said technicals do not justify a large corporate overweight now.

The board did not take a formal vote to remove or replace any manager during the meeting. The explicit outcomes were (1) direction to the consultant to return with candidate managers and implementation scenarios at the next regular meeting and (2) agreement to consider transferring up to approximately $6 million from listed accounts to a potential new core manager if trustees approve later. Evitt said he would present names and implementation plans at the next quarterly meeting.

The discussion closed with the board expressing appreciation for the presentations and with no final manager changes adopted at the session.