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Marquette Associates reviews Q4 performance; committee approves report
Summary
Marquette Associates summarized fourth‑quarter 2024 market impacts, noted U.S. equity outperformance and relative active manager headwinds, and the committee approved the investment performance report.
Mr. Wing, an investment consultant from Marquette Associates, briefed the governance committee on Feb. 27 about fourth‑quarter 2024 market performance and how it affected plan options. “Specifically, there wasn't a lot that posted gains in Q4. ... US equities actually posted a marginal gain of about 2.6%, whereas their international counterparts ... were deeply negative,” Mr. Wing said, explaining that U.S. dollar strength weighed on non‑U.S. returns.
Wing outlined three plan‑relevant tilts that helped performance for certain fund families: (1) an overweight to U.S. equities; (2) relatively larger allocations to high‑yield securities in some funds; and (3) lower duration in some active bond managers, which reduced losses as interest rates rose. He said those characteristics helped the American Funds target‑date series produce strong results for the quarter and longer periods.
On plan holdings, Marquette noted that target‑date funds comprised roughly 70% of plan assets (the report cites about $23.7 million in total plan assets). The consultant pointed out an allocation shift in the quarter: the 2025 target‑date option fell by about 4.5 percentage points while allocations into fixed income options (including PIMCO and a Vanguard TIPS fund) rose, suggesting some participants moved from a target‑date approach to a self‑directed fixed‑income allocation.
Performance specifics included PIMCO’s fixed‑income options modestly outperforming their benchmarks during the quarter and several active equity managers lagging benchmarks when mega‑cap U.S. growth stocks led market gains. Marquette recommended continuing periodic manager reviews and suggested inviting American Funds back for another fiduciary‑level presentation in 12–18 months because that series holds a large share of plan assets.
Action: A motion to approve the Marquette Associates fourth‑quarter investment performance report passed unanimously. (Motion moved and seconded; vote tally: 7 yes, 0 no, 0 abstain.)
Why it matters: Investment performance and manager decisions materially affect participant outcomes because roughly 70% of assets are in target‑date funds; committee oversight of manager selection, share classes and allocation shifts is a core fiduciary duty.
Next steps: Marquette will continue routine manager monitoring and return with recommendations as appropriate; the committee indicated interest in a follow‑up American Funds presentation in the coming 12–18 months.
