Vallejo committee keeps Vanguard U.S. Growth option, adds watch flags and replaces international-value fund
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Summary
The City of Vallejo Deferred Compensation Committee voted unanimously to continue watch status on multiple funds, add two funds to its watch list, and replace the Vanguard International Value option with DFA International Value. The committee also voted to retain Vanguard U.S. Growth Admiral as an option while keeping it under formal watch.
The City of Vallejo Deferred Compensation Committee on a unanimous vote continued watch status for several existing funds, added two additional funds to its watch list and approved a replacement of the Vanguard International Value option.
The committee voted to retain watch status for the Mission Square Plus Fund, MFS Value, Vanguard U.S. Growth (Admiral), MFS Mid Cap Growth and Vanguard International Value and to add Sterling Capital Total Return and Vanguard International Growth to the watch list. The same session approved replacing the Vanguard International Value fund with DFA International Value.
Why it matters: the committee’s watch and replacement decisions are part of its fiduciary oversight: watch status documents underperformance or structural change and starts a formal monitoring process. Vincent of the Highest Group, the committee’s investment consultant, cited an ownership change for Sterling Capital and multi-year underperformance for Vanguard International Growth as reasons to add them to the watch list. He recommended replacing Vanguard International Value with DFA International Value on the basis of stronger multi-year peer rankings while noting similar expense ratios.
Votes at a glance: - Approval of minutes from the 07/28/2025 regular meeting — Passed (5–0). (Recorded votes: Peterson Yes; Garcia Yes; Crutchfield Yes; Chair Brown Yes; Vice Chair Olsen Yes.) - Continue watch status for Mission Square Plus Fund, MFS Value, Vanguard U.S. Growth, MFS Mid Cap Growth and Vanguard International Value — Passed (5–0). - Add Sterling Capital Total Return and Vanguard International Growth to watch list — Passed (5–0). - Retain Vanguard U.S. Growth (Admiral) as a plan investment option and keep it on watch — Passed (5–0). Staff noted 184 participants hold the fund (~$8.5 million across plans). - Replace Vanguard International Value with DFA International Value — Passed (5–0).
What the consultant said: Vincent of the Highest Group summarized fund-level metrics, peer-percentile rankings and risk/return measures. He told the committee that the Vanguard U.S. Growth fund had mixed median rankings over multi-year windows and that three candidate replacement managers (JPMorgan, Fidelity Blue Chip Growth and Putnam) showed varying tradeoffs between long-run performance, volatility and expense. After discussion the committee opted to keep Vanguard U.S. Growth in the lineup while maintaining formal watch status.
What happens next: if a fund is replaced, plan participants’ existing assets in the replaced fund will be mapped into the replacement fund; vendor communications to participants and plan sponsor notices will be provided in advance. The committee asked the consultant and recordkeeper to provide focused performance history, participant counts and dollar exposure for any fund under consideration at the next review to inform future decisions.
Quotes: “Our recommendation is to place that fund on watch,” Vincent said when describing Sterling Capital’s ownership change. On the replacement vote, Chair Brown called the motion and the committee voted unanimously.
Background: watch lists are used to document monitoring and the committee’s deliberative process; members said watch status supports prudent process and transparency to participants.