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Investment consultant: OKC plan lineup performing in line with expectations; Loomis small‑mid growth under short‑term pressure
Summary
ACG consultant Jason Pujols briefed trustees on market moves, plan asset allocation and manager monitoring, noting broadly positive performance but a short-term lag in a Loomis small‑mid growth strategy and the potential future demand for private-market options.
Jason Pujols of ACG delivered the investment consultant report to the Oklahoma City Deferred Compensation Board on Aug. 20, describing recent market performance, plan asset allocations and ongoing manager oversight.
Pujols said U.S. large-cap and international equities have rallied this year while U.S. small-cap has lagged relative to other asset classes. He told trustees that the plan menu is “a quality, diversified set of low cost options” and noted that the qualified default option for the plans is the Vanguard target retirement funds, which the consultant said use passive, low-cost underlying index strategies.
On specific funds, Pujols walked trustees through a metrics page tied to the board’s investment policy. He singled out the Loomis small‑to‑mid‑cap growth strategy, noting that its three-month and three-year performance lagged a growth benchmark that was unusually strong in the quarter because many benchmark constituents do not have positive earnings. Pujols said the Loomis strategy is deliberately “higher quality” and that active managers with that bias may miss benchmark rallies that include lower-quality, non‑earner names. Over longer periods he said the strategy’s 10‑year annualized return is “up 10.6%,” and that its volatility has been relatively low.
Pujols emphasized that manager oversight uses more than headline performance: the consultant reviews team stability, firm stability, asset flows and risk metrics and brings recommended changes to the board if issues arise. He also flagged a legislative trend the board should watch: potential moves to allow private-market vehicles into participant-directed retail offerings. Pujols said such vehicles are likely to show up first in target‑date funds but warned they will have different liquidity and fee implications compared with traditional institutional private‑equity investments.
The board asked whether managers would be replaced or whether participants would be mapped to new options if a change were made; Pujols said the normal expectation would be to map participants into the replacement option rather than leaving duplicate choices in the lineup.
The board voted to receive the investment consultant report later in the meeting; that procedural motion passed without recorded roll-call vote.
