Investment consultant wins approval to cut international equity and shorten fixed-income duration

Trustees voted Thursday to implement two portfolio adjustments recommended by Raystown Consulting aimed at lowering risk and reacting to recent market volatility.

Scott of Raystown Consulting told the board that international equities had swung from a top performer to underperformer over recent quarters and recommended reducing international exposure toward 2.5% from the plan's 5% target. He proposed reallocating roughly 2.3 to 2.5 percentage points into the fund's mid-cap managers.

"If the managers underperform, I'll bring a search for the next 0.25," Scott said, noting the firm would include passive options in any search if active managers fail to beat benchmarks. Trustees moved and seconded the motion to reduce international weight and allocate the proceeds to mid-cap managers; the motion passed on a voice vote.

Scott also recommended lowering the fund's long-duration fixed-income exposure. He proposed cutting the core fixed-income allocation from about 14.8% to 12% and moving roughly 2.8 percentage points into the intermediate manager (Madison) to reduce duration risk while retaining some income exposure. A trustee moved the recommendation, it was seconded and approved by voice vote.

Scott said the fund currently holds a meaningful cash balance (over $500,000) and that the team is monitoring managers and asset classes, particularly international and real estate allocations. He warned that real estate remains difficult to exit and that the firm will continue to evaluate manager performance each quarter.

The investment shifts were recorded as formal motions and incorporated into the fund's asset allocation targets for the next period. Scott told trustees he would return next quarter with a manager search if either international manager continued to underperform.

Trustees also approved straightforward administrative items and adjourned; the next quarterly meeting is set for April 10, 2025.