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Trustees push back on plan to move international holdings into higher‑fee managed funds
Summary
Trustees of the Lincoln Trust Fund questioned a presenter’s recommendation to shift some international holdings into actively managed funds—citing much higher fees—and asked the presenter to pause any change until she provides fund names, fee comparisons, and multi‑year performance figures; the board approved minutes and set a June 4 follow‑up.
Trustees of the Lincoln Trust Fund pressed an outside investment presenter on April 16 over a proposal to move a portion of the fund’s international holdings from passive index funds into actively managed accounts, citing sharply higher fees and a lack of track‑record detail.
Donna, the investment presenter, told trustees that international exposure currently makes up about 5% of the portfolio and that some clients have shifted a limited share of assets into managed funds to try to improve returns. "Five percent of the portfolio is invested in international," Donna said, and she described options that include both Vanguard index funds and potential actively managed international funds with higher management fees.
Several trustees pushed back, citing fee differentials and the trustee‑crafted investment policy. A committee member said trustees expect to know "who we're investing in" before any change and warned that moving from roughly 4 basis points (0.04%) for an index fund to about 75 basis points (0.75%) for a managed fund would be "a huge, huge increase in pay." Trustees repeatedly asked Donna to provide specific fund names, fee schedules and one‑, three‑ and five‑year performance records before they would authorize any shift.
The discussion focused in part on policy language that currently says trustees "prefer" a majority of non‑capital reserve funds be invested in an S&P diversified index. Several trustees said the word "prefer" leaves the policy vulnerable to interpretation and could permit a broader move into managed funds. The board agreed to revisit that wording at a June 4 meeting and asked staff to prepare suggested language to clarify index‑versus‑managed limits.
On operations and liquidity, trustees were told about recent activity: the presenter reported roughly $800,000 in bond maturities this year and about $1.1 million in cash on hand; a trustee also reported a recent withdrawal of $153,998.24 had been processed and funds made available. The presenter recommended holding maturing proceeds temporarily to ensure cash is available for a pending buyer on a municipal transaction.
Formally, the board moved to accept the minutes of the March 12, 2026 meeting and approved them by voice vote; the transcript records ayes without a roll‑call tally. Trustees scheduled a meeting with the bank for July 16 and agreed to add an internal session on June 4 to address investment‑policy wording and to require the presenter to return with detailed fee and performance comparisons before any fund changes.
Next steps recorded at the meeting: the trustees will ask the presenter to leave the Lincoln international holding as an index fund for now, provide specific proposals in writing with fees and multi‑year performance metrics, and consider language edits to the investment policy at the June 4 follow‑up.
