Cocoa Beach pension managers report flat quarter, expect modest equity gains and steadier bond returns in 2025

At a quarterly meeting of the Cocoa Beach Pension Board, investment presenters said the board’s Sterling Capital–managed portion of the pension was essentially flat for the most recent quarter and that managers expect modest equity gains and steadier bond income in 2025.

The report from Sterling Capital, presented by Blake Myton, said U.S. stocks produced strong one‑year returns driven by a small group of large technology companies and that the firm is positioning the portfolio for broader market participation and a “high single digits” equity return for the year. “We’re pretty flat for the quarter,” Myton said, and he added, “high single digits is a pretty realistic equity expectation for this year.”

Myton said the Russell 3000 and other broad indexes were carried in 2024 by a handful of AI‑related companies; growth significantly outpaced value over the last year, and Sterling expects other names to be recognized as beneficiaries of AI over time. The firm also reported that sterling‑managed assets began the fiscal year near $20,000,009.27, received a net city contribution of roughly $560,000, and stood just under $21,000,004.50 at the quarter end. Myton said Sterling’s allocation at quarter end was about 53% equities and 46% fixed income, close to the plan’s 52/48 target, and that the Sterling‑managed piece was almost flat (0.01%) for the quarter versus the blended benchmark (about -0.10%).

On fixed income, Myton and Sterling noted a difficult quarter for bonds: the broad Bloomberg U.S. Aggregate was down over 3% for the quarter, and Sterling’s fixed‑income sleeve lost roughly 2.7% for the quarter. Myton said bond yields are now compensating investors more than in recent years and that a 4–5% return on the bond portion would be a positive outcome if rates remain near current levels. “From that perspective... that’s kind of a 4 or 5% return out of that piece of the portfolio we would call very, very good,” he said.

Larry Cole of Bridges Chambers, who presented an independent market summary, described the same concentration in the market and gave a similar outlook: “I would expect stocks... you know, you’re probably seeing an 8 to 10% year out of most stocks,” he said, while also warning that tariffs, defense‑budget cuts and political volatility could create short‑term market swings. Cole said bonds could produce coupon‑like returns in the 4% range and that higher bond yields reduce the need to take extra equity risk to meet long‑term return goals.

Both presenters said they were not recommending major portfolio changes at the meeting. Sterling noted some funds and sectors to watch — large‑cap growth outperformed, while some value and mid‑cap managers lagged — but described overall positioning as close to neutral after recent rebalancing. Cole said the plan’s long‑term return target (the actuarial assumption discussed later in the meeting) remains achievable with the current allocation.

The managers also flagged risks and watch items for the board: continued market concentration among a handful of large tech names; potential tariff policy that could be inflationary in the short run; and U.S. political developments that may increase volatility.

The board did not vote on any change in investment policy at the meeting. Presenters said they will continue to monitor sector positioning and will report back if manager changes or rebalancing are recommended.