The San Joaquin County Deferred Compensation Advisory Committee voted unanimously Nov. 7 to place the Vanguard International Growth fund on watch following its quarterly investment review.

The committee's investment consultant presented third-quarter market and fund results, reporting strong performance across multiple asset classes and noting that plan-level returns have been positive year to date. The consultant recommended retaining watch status for several funds that continue to violate longer-term monitoring metrics and formally proposed placing Vanguard International Growth on watch; the committee approved the motion without opposition.

Why it matters: placing a fund on watch does not remove it from the lineup but signals the committee and staff to monitor performance and governance closely and to consider further action if the fund does not improve. The consultant said the watch recommendation for Vanguard International Growth reflected multi-year performance rules for active managers (five-year relative returns and peer percentile thresholds), not only the most recent returns.

Key details from the presentation:
- Plan-level performance: consultant reported broad market gains across fixed income, U.S. large-cap equities and international markets through the quarter; several asset classes produced double-digit year-to-date returns. The consultant noted that some macro data releases were delayed because of the federal government shutdown, which complicated some recent updates.
- Funds on watch: the consultant recommended retaining MFS Mid Cap Growth and DFA Real Estate Securities on watch and placing Vanguard International Growth on watch for lagging five-year metrics relative to peers.
- Manager change flagged: the Invesco Gold & Special Minerals fund posted very strong recent returns but the lead portfolio manager retired after the report was prepared; the consultant recommended monitoring the fund (watch status) because of that management change and because the replacement team is newly elevated, though the team has had continuity since February.
- Fee and menu updates: target-date funds will move to lower-cost collective investment trusts next Friday, which the consultant said should reduce expense ratios for participants.

Actions recorded at the meeting:
- Approval of minutes from the Sept. 2 quarterly meeting (motion carried unanimously).
- Motion to place the Vanguard International Growth Fund on watch (motion passed unanimously).

Next steps and process notes: the committee directed staff and the consultant to continue monitoring any funds on watch and to bring recommendations if additional action (replacement or retention) is warranted. The Invesco manager change will be tracked and reported at future meetings.

Context: committee members emphasized fiduciary responsibility for reasonable fees and invited staff to pursue cost-saving opportunities where feasible. The committee meets next on Feb. 26, when ongoing watch-list items and any fund changes are expected to be revisited.