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Board accepts fourth-quarter investment reports; BCA and Capital City explain market outlook
Summary
The Firefighters' Pension Board accepted quarterly reports from BCA and Capital City Trust. BCA highlighted market concentration in seven large tech companies, sticky inflation, and the Fed's cautious rate path; Capital City said it is holding elevated cash to await buying opportunities.
The Firefighters' Pension Board voted to accept investment reports from its investment consultant BCA and manager Capital City Trust following a presentation on markets, allocations and manager performance.
BCA's fourth-quarter overview emphasized outsized returns from seven large technology companies — described in the presentation as NVIDIA, Microsoft, Apple, Amazon, Alphabet, Meta and Tesla — and noted those firms accounted for the bulk of market gains and losses in recent years. BCA representative Mitchell Brennan told trustees the Magnificent Seven “have really dominated markets, for the past 3 years,” and that the group’s valuations and recent earnings surprises help explain both the 2024 gains and the early-2025 volatility.
BCA also reported that inflation ticked higher in late 2024 and into January 2025, pushing the consultant to expect a cautious Federal Reserve. BCA recommended patience on rebalancing and said the plan’s overweight cash position provided downside protection during the recent sell-offs.
Capital City Trust reported it is overweight cash (earning roughly 4.2% per the presentation) and intentionally holding that allocation as a defensive posture while awaiting a market correction that would create buying opportunities. Capital City said cash yields were close to short-duration bond yields and that the manager preferred to avoid duration risk for limited extra return.
Board action: Trustees voted to accept BCA’s report and Capital City’s report by voice vote. Trustees also discussed inviting Sawgrass (the fixed income manager) to the next quarterly meeting to review strategy and positioning; the board directed staff to invite the manager.
Why it matters: The reports summarized the pension fund’s slight quarterly loss, strong 2024 one-year returns, and the board’s position relative to its strategic targets. Manager and consultant presentations set the context for potential future rebalancing and manager monitoring.
