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Officials press managers after small‑cap and international underperformance
Summary
Advisors told the meeting Fuller & Taylor (small-cap) and an international manager underperformed in the quarter, largely due to an AI/semiconductor rally that left value and underweight strategies behind; officials asked follow-up questions about manager selection and benchmarks.
Presenters identified manager-level detractors and explained performance drivers. The Morgan Stanley presenter said Fuller & Taylor (small-cap, value-focused) and an international manager lagged because they were underweight fast‑rising semiconductor names; "Fuller and Taylor... were down 26 basis points in both," the presenter said, and noted MFS international missed exposure to ASML and Tokyo Electron.
Committee members queried why managers missed the sector rally and whether any changes were warranted. The presenter said these managers remain on an approved or focus list, explained their valuation-driven process, and said underweighting cyclically strong sectors can produce short-term lag but may benefit longer-term returns.
Officials agreed to monitor manager performance and review attribution in the next report; no manager removal or reallocation decision was taken during the meeting.
