Oldsmar trustees move U.S. large-cap to S&P 500 index, plan follow-up with underperforming manager

Trustees heard the quarterly investment report and accepted a portfolio change that moved the plan's U.S. large-cap sleeve to an S&P 500 index.

Plan staff (Jeremy) told trustees the change took effect Oct. 1 and was made to reduce fees and align long-term returns closer to the benchmark. "We moved all of the U.S. large cap funds into just that S&P 500 index," he said, noting the index fund carries a roughly 0.01% fee. Staff framed the decision as a cost-saving measure intended to deliver incremental dollar savings to the plan.

Jeremy reviewed results for the fiscal year: the trust fund returned about 8.38% for the fiscal year and showed a 10-year average market return near 7%. He described a broader conversation about passive versus active management and said the board intentionally aims to be conservative.

Trustees also raised concerns about an underperforming small/mid-cap manager, Atlanta Capital. That sleeve historically outperformed its benchmarks but has lagged in the last year and a half. Staff said they will meet with the manager in two weeks for an in-depth review and report back to trustees at the next meeting.

Trustees discussed allocation concentration, diversification options and the tradeoffs between active management's downside protection and index-driven returns in long-running market regimes. No formal change beyond the large-cap indexing was voted at the meeting; staff will provide manager feedback and options at the next session.

Key figures and follow-up: the trust fund's beginning-quarter balance was about $12.14 million; contributions of roughly $215,000 and investment earnings of about $361,000 were reported for the quarter. The board asked staff to return with manager due-diligence findings for the underperforming small/mid-cap allocation.