Trustees place three funds on watch after quarterly investment review

At its Sept. 11, 2025 meeting, the Sarasota City Employee Retirement Account Committee voted to place three investment options on the plan—s watch list after a quarterly review presented by Capital Group.

Capital Group Principal Howard told trustees the plan—s investments produced solid results in the second quarter of 2025 and that most funds have outperformed peers year to date. "When you look at the 22 individual funds... 19 out of the 22 or basically 86% of the funds... have actually outperformed the peer group," Howard said.

The committee kept three funds on the formal watch list for closer monitoring: Hartford Dividend and Growth; JPMorgan Growth Advantage; and Janus Henderson Global Life Sciences. Trustees voted on each watch recommendation during the meeting and recorded unanimous approval for each motion.

Howard summarized market drivers behind the quarterly results, saying the S&P 500 rebounded in Q2 after a weak Q1, driven in part by technology stocks benefiting from renewed investor interest in artificial intelligence. He also noted that international markets performed well in the quarter and that bond returns remained modest.

Hartford Dividend and Growth: Capital Group noted the fund had returned nearly 5% in the quarter and roughly 6% year to date, with about $1,200,000 invested in the plan (less than 5% of DC assets). Although performance and expense looked acceptable, the consultant recommended retaining the fund on the watch list because it has appeared on the list multiple times and staff wants continued observation. Trustees voted to keep Hartford on watch (motion passed; roll call: Trustee Ben Billingsley '1; Secretary Shayla Griggs '1; Treasurer Kelly Strickland '1; Vice Chair Lauren Sullivan '1; Alexia Bolanos '1).

JPMorgan Growth Advantage: Capital Group said the fund had a strong bounce in Q2 (roughly 19% during the three-month period) but still warrants monitoring. The plan held just under $300,000 in the fund (under 1% of DC assets). Trustees voted to maintain JPMorgan Growth Advantage on watch (motion passed; roll call: Billingsley yes; Griggs yes; Strickland yes; Sullivan yes; Bolanos yes).

Janus Henderson Global Life Sciences: The consultant placed this healthcare-focused fund on watch for risk-related metrics rather than performance. Capital Group reported approximately $1,400,000 invested in the fund as of June and said the fund ranks in the top 15 of its peer group on several horizon returns but shows higher volatility on measures such as three-year standard deviation and capture ratios. Capital Group recommended monitoring the fund to see whether risk measures moderate; trustees voted to place Janus Henderson Global Life Sciences on watch (motion passed; roll call: Billingsley yes; Griggs yes; Strickland yes; Sullivan yes; Bolanos yes).

Howard also reviewed asset-weighting in the DC plan and noted that five funds accounted for about 65% of DC plan assets, with the Vanguard Wellington Fund the largest holding (just over 20% of plan assets). He told trustees the plan held about $28.8 million in DC assets as of the June report and that target-date funds were trending higher but had not become dominant.

Votes at a glance

- Motion to place Hartford Dividend and Growth on watch: Passed (unanimous). Assets in fund: $1,200,000; reason: continued monitoring after mixed watch-history and volatility metrics.

- Motion to maintain JPMorgan Growth Advantage on watch: Passed (unanimous). Assets in fund: ~ $300,000; reason: strong short-term bounce but retained for observation.

- Motion to place Janus Henderson Global Life Sciences on watch: Passed (unanimous). Assets in fund: $1,400,000; participants invested: ~170; reason: elevated risk measures (standard deviation and capture ratios) despite competitive returns.

Committee members and staff said they had no additional concerns after the review and expect Capital Group to report back at the next quarterly meeting. Howard recommended routine monitoring and a full reassessment of watch-listed funds at the next quarterly review in Q4.

The committee did not adopt changes to the plan lineup at the meeting; trustees directed staff and the consultant to continue monitoring the flagged funds and return with any material developments or recommendations at the next quarterly review.