Table of Contents

• Q2 2026 Vista Plan Performance and Market Conditions
• June 2026 Fund Performance Chart
• How to Build Long-Term Financial Security
• Invest Your Personal Maximum
• It’s Never Too Late to Invest in the Vista 401(k) Plan 
• Nuts and Bolts – How to Invest Your DROP Funds
• The Drop Box
• Helpful Hints

Welcome to Vista 401(k)!

Q2 2026 Plan Performance

By Constantine Mulligan, Director of Investments Partner, Cerity Partners LLC

Vista 401(k) Plan Fund Performance

The second quarter of 2026 was a story of relief and reversal. The US-Israeli military campaign against Iran that dominated the first quarter eased as a ceasefire took hold, and equity markets staged one of their strongest rallies in a generation. Yet the inflation the conflict set in motion did not fade nearly as quickly as the geopolitical risk premium did, and a new Federal Reserve chair took office in the middle of it all. For retirement plan sponsors, the quarter validated a familiar lesson: the discipline that carried participants through the Q1 selloff should also keep them from chasing the Q2 rally.

Key Themes:

• Geopolitical De-escalation Fuels a Historic Rally: A ceasefire eased the Iran conflict and oil prices shifted from a peak near $115 per barrel back toward pre-war levels. Equities responded forcefully, with the S&P 500 posting its best quarter since the 2020 pandemic rebound.
• Inflation’s Delayed Arrival: Even as the conflict wound down, the earlier oil shock worked its way through the economy. May CPI reached 4.2% year-over-year, a three-year high, underscoring that easing geopolitical risk and easing inflation are not the same thing.
• A New Fed Chair, A New Posture: Kevin Warsh was confirmed and sworn in as Federal Reserve Chair in May. His first meeting removed the Fed’s prior easing bias, dropped forward guidance, and revealed a committee now leaning toward a rate hike rather than a cut before year-end.
• Broadening Participation: Unlike prior quarters dominated by a handful of mega-cap names, small-cap, mid-cap, and international equities all outpaced the S&P 500, and semiconductor stocks recorded their strongest quarter in nearly three decades.
• Valuations Now Demand Discipline: The strength of the rally has pushed valuation measures, including the Shiller CAPE ratio, to some of their highest levels on record, raising the bar for continued gains and the case for staying diversified rather than concentrated.

These dynamics point to the same conclusion from a different direction than Q1 did. A disciplined, diversified approach protected participants from overreacting to the first quarter’s shock; that same discipline is what should prevent participants from over-committing to a rally that has already pushed valuations to rich levels. The fiduciary framework, grounded in broad diversification and long-term orientation, is built for both sides of that coin.

The Plan’s investment lineup remains well positioned for an environment defined by a resolved-but-not-forgotten geopolitical shock, a still-elevated inflation backdrop, and a Federal Reserve in transition. Spanning asset classes, geographies, and sectors, the menu gives participants exposure to the broadening rally without requiring a bet on any single outcome. Participants who maintained their contribution schedules and allocations through the first quarter’s volatility captured the recovery; the same steady approach remains the more reliable path to long-term retirement outcomes.

FOR OUR CLIENTS WHO WISH TO TAKE A DEEPER DIVE, WE HAVE PROVIDED THE FOLLOWING ECONOMIC AND MARKET COMMENTARY. THIS WILL PROVIDE AN EXPLANATION OF THE OVERALL MACRO AND MICRO ECONOMIC FACTORS INFLUENCING THE MARKETS AND, IN TURN, YOUR VISTA 401(K) ACCOUNT. IF YOU HAVE ANY QUESTIONS OR WISH TO DISCUSS THESE MATTERS IN GREATER DETAIL, PLEASE CONTACT US AT 866-325-1278 OR E-MAIL US AT 401K@VISTA401K.COM.

Second Quarter 2026 Economic and Market Review & Third Quarter Outlook 

The defining feature of the second quarter was the unwinding of the first quarter’s defining crisis. The US-Israeli campaign against Iran, which had closed the Strait of Hormuz and sent oil prices surging in Q1, moved toward a ceasefire during Q2. Crude prices, which had climbed further still to near $115 per barrel early in the quarter as hostilities briefly intensified, fell back to roughly pre-conflict levels near $70 by quarter-end as the ceasefire held and shipping through the Strait resumed.

Equity markets responded with one of the strongest rallies of the past several decades. The S&P 500 gained approximately 15% for the quarter, its best showing since the pandemic rebound of Q2 2020, while the Nasdaq Composite rose over 21% and the Dow Jones Industrial Average advanced roughly 13%. Nine of the S&P 500’s eleven sectors finished the quarter higher. Technology led with a gain of roughly 32%, powered by a resurgence in AI enthusiasm and a historic run in semiconductor stocks, which returned nearly 88% for the quarter, their strongest performance in almost thirty years. Energy was the lone sector decliner, falling around 13% as oil prices unwound their first-quarter surge.

The rally’s breadth was as notable as its magnitude. Small-cap stocks, represented by the Russell 2000, gained over 21%, while mid-caps rose nearly 14% and developed international markets advanced meaningfully as well. This marks a shift from the narrow, mega-cap-led advances of recent years, and is a constructive sign for diversified portfolios that had lagged concentrated growth strategies through much of 2024 and 2025.

The quarter also brought a consequential leadership change to the Federal Reserve. Kevin Warsh was confirmed by the Senate in a narrow, historically divisive vote and was sworn in as Fed Chair in mid-May, succeeding Jerome Powell. At his first policy meeting in June, the Fed held rates steady at 3.50%-3.75%, but the accompanying statement was shortened considerably and stripped of the prior easing bias. Chair Warsh also announced that the Fed would step back from providing forward guidance on the future path of rates, preferring that markets react to incoming data rather than anticipated Fed reaction functions. Committee projections released at that meeting showed a majority of participants now anticipating at least one rate hike before year-end, a sharp reversal.

The shift in tone reflects a genuine inflation problem left behind by the energy shock. May CPI came in at 4.2% year-over-year, the highest reading in three years, with more than half of the monthly increase attributable to energy costs; core inflation, which excludes food and energy, registered a more moderate but still elevated 2.9%-3.4% depending on the measure. The labor market, meanwhile, has remained more resilient than expected, with unemployment holding near 4.3% and payroll growth continuing to outperform forecasts. This complicates the case for near-term rate relief even as growth projections have been trimmed modestly, as the Fed projects full-year GDP growth of roughly 2.2%.

Equities

Second-quarter S&P 500 earnings are on pace for roughly 24% year-over-year growth, extending a run of double-digit earnings gains and marking one of the strongest earnings seasons since the post-pandemic recovery, with revenue growth of approximately 12%, the fastest pace since 2022. The rebound in AI enthusiasm was the central driver, but this quarter’s version of the AI trade looked different from prior quarters: rather than being concentrated in the largest technology companies, the biggest winners were the firms supplying the AI infrastructure buildout, including semiconductor and memory chip makers, several of which posted triple-digit returns. That broadening, combined with the strength in small-cap, mid-cap, and international equities, is a healthier setup than the narrow leadership that characterized much of the past three years.

Fixed Income

The Treasury yield curve moved higher over the quarter as the market repriced Fed expectations from cuts to a possible hike; the 10-year Treasury yield, which ended the first quarter at 4.34%, climbed to the mid-4.50% range by quarter-end, with much of the move concentrated around the Fed’s June meeting. Credit spreads remained near historically tight levels, and high-yield bonds continued to appear fully to richly valued given how little compensation they offer relative to Treasuries. Bonds posted positive but modest returns for the quarter, underperforming almost every major equity index, a reminder that fixed income’s role during a quarter like this one is ballast rather than participation.

Monetary Policy & Outlook

The most important signpost for the third quarter is whether May’s inflation reading marks the peak of the energy-driven price pressure or merely a way station. A confirmed downtrend in CPI over the next two prints would materially reduce the odds of a Fed hike and could support a further broadening of the equity rally; a reacceleration would validate the more hawkish scenario markets are now pricing. We are also watching valuations, which have become stretched enough that further gains will likely need to be earned through continued earnings growth rather than multiple expansion, and the renewal of conflict with Iran, given that some of the damage to regional energy infrastructure will take time to repair and could still support elevated oil prices relative to pre-conflict levels even without renewed conflict but will certainly take longer with continued strikes. Finally, we continue to monitor Chair Warsh’s planned overhaul of Fed communications, including the new task forces and the retreat from forward guidance.

What We Are Watching

The most important signpost for the third quarter is whether May’s inflation reading marks the peak of the energy-driven price pressure or merely a way station. A confirmed downtrend in CPI over the next two prints would materially reduce the odds of a Fed hike and could support a further broadening of the equity rally; a reacceleration would validate the more hawkish scenario markets are now pricing. We are also watching valuations, which have become stretched enough that further gains will likely need to be earned through continued earnings growth rather than multiple expansion, and the renewal of conflict with Iran, given that some of the damage to regional energy infrastructure will take time to repair and could still support elevated oil prices relative to pre-conflict levels even without renewed conflict but will certainly take longer with continued strikes. Finally, we continue to monitor Chair Warsh’s planned overhaul of Fed communications, including the new task forces and the retreat from forward guidance.

Retirement Plan Implications

The second quarter offers a useful bookend to the first. Participants who stayed invested through the Iran-conflict selloff captured the bulk of this quarter’s historic rebound, reinforcing the value of maintaining allocations through geopolitical shocks rather than reacting to them. The lesson for the current environment cuts the other way: a 15% quarterly gain and record-high valuations are not, on their own, reasons to abandon a diversified strategy in favor of concentrated bets on this quarter’s winners. Committees should continue to reinforce that target-date funds and diversified options remain the appropriate default for most participants, particularly as valuation measures sit near historic extremes and the Fed’s policy path has become less predictable than it was even a quarter ago.

June 2026 Fund Performance Chart

How To Build Long-Term Financial Security

Saving for retirement should not be intimidating, nor should it seem out of reach. The task is simple: Analyze your spending habits, determine what you can change to save money, and invest those saved funds in your Vista 401(k) account. Start small if need be and grow your investment as you grow in your career. These techniques will allow all employees to build long‑term financial security.

Step 1: Identify where your money is going

The first step is to monitor your spending. Many people underestimate how much they spend on discretionary items like dining out, subscriptions, or impulse purchases. Tracking your expenses for a month helps you spot patterns and identify areas where small adjustments can free up meaningful cash.

Common opportunities include:

• Subscription trimming — Eliminate unused streaming services or apps.
• Reduce dining-out frequency — cutting one restaurant meal per week will result in significant savings.
• Smart grocery planning — meal planning and buying store brands can reduce grocery bills.
• Energy efficiency habits — small changes like adjusting thermostat settings can lower utility costs.

If by adhering to the above recommendations you can save $150 per month, that amounts to $1,800 per year. This money can be redirected to your Vista 401(k) account automatically, through payroll.

Step 2: Redirect savings into your Vista 401(k)

A 401(k) is one of the most powerful places to invest your money because of two major advantages:

1. Tax benefits – Traditional Vista 401(k) contributions reduce your taxable income, while Roth Vista 401(k) contributions grow tax‑free. Either way, you keep more of your money working for you.
2. Compound growth Over decades, your contributions earn returns, and those returns earn returns. This exponential growth is the engine of long‑term wealth.

Step 3: Make adjustments as your income grows

As your salary increases, you can raise your contribution rate. If you choose to contribute a percentage of your salary each pay period, your contribution will automatically grow as your salary grows. The Vista 401(k) plan offers automatic annual increases—an easy way to boost your savings without feeling the impact all at once.

Step 4: Stay consistent

The most important factor is consistency. Saving money and investing in your Vista 401(k) account is not about perfection—it’s about steady progress. Even small contributions add up over time, especially when supported by compound growth.

If you have any questions or wish to discuss this in greater detail, please contact the Retirement Services Department at (866) 325-1278.

Invest Your Personal Maximum 

Many people assume they need large sums of money to build wealth, but the truth is far more encouraging. Consistent, modest investing, started early in your career, can grow into something substantial over time. The combination of time, habit, and compound growth can turn small contributions into significant, long-term gains.

Time is your greatest financial asset

Starting young gives your money more time to grow, and time is the single most valuable ingredient in investing. Even small amounts can multiply when they’re allowed to compound year after year.

Compound growth means your investments earn returns, and then those returns earn returns. Over decades, the results can be significant. Each pay period, simply choose to contribute your personal maximum, do so consistently, and let compound growth and time do the rest.

Small amounts matter more than you think

Small contributions are powerful because they’re sustainable. You don’t need to overhaul your lifestyle or wait until you “make more money.” You can begin with whatever dollar amount feels comfortable per pay period. You may also choose to contribute a percentage of your income, rather than a dollar amount, each pay period. This results in an automatic Vista 401(k) contribution increase every time you receive an increase in pay.

This habit does two things:

1. Builds discipline — You learn to prioritize your future self.
2. Creates momentum — Once you see your balance grow, you’re more likely to increase contributions later.

Starting young gives you flexibility

When you begin investing early, you don’t need to take big risks or make large contributions to reach meaningful goals. Time does the heavy lifting.

Starting young also gives you:

• More opportunities to increase contributions — As your income grows, your investments can grow with it.
• More resilience — Market ups and downs matter less when you have decades ahead of you.

This is why financial planners often emphasize beginning early rather than beginning big.

Consistency beats intensity

Investing isn’t about timing the market or making perfect decisions. It’s about showing up month after month. Automatic contributions to your Vista 401(k) account make investing effortless.

Consistency also protects you from emotional decision‑making. When you invest the same amount regularly, you buy during highs, lows, and everything in between. Over time, this smooths out volatility and keeps you focused on the long game.

The long‑term payoff

The real reward of small, consistent investing isn’t just the final dollar amount, it’s the financial confidence you build along the way. You’re creating a habit that supports your future, reduces stress, and gives you options later in life.

Starting young and investing your personal maximum means you’re giving your future self a gift: time, growth, and freedom.

It’s Never Too Late to Invest in the Vista 401(k) Plan

Many people believe that if they haven’t started saving for retirement in their 20s or 30s, they’ve already missed their chance to build meaningful financial security. While starting early certainly provides the advantage of time and compound growth, the truth is that it’s never too late to invest in the Vista 401(k) plan. Whether you’re in your 40s, 50s, or even approaching retirement, contributing to the Vista 401(k) can still provide significant financial benefits and help you create a more comfortable future.

One of the biggest advantages of the Vista 401(k) plan is the tax savings it offers. Traditional Vista 401(k) contributions are made with pre-tax dollars, reducing your taxable income for the year. This means you may pay less in income taxes while simultaneously building your retirement savings. If you select the Roth Vista 401(k), you contribute after-tax dollars, allowing qualified withdrawals in retirement to be tax-free. Either way, these tax advantages make a Vista 401(k) account one of the most effective retirement savings vehicles available.

Time still matters, even if you start later than planned. Someone who begins contributing consistently in their 50s may still have 10 to 20 years before they fully retire. During that period, investments can grow through market appreciation and compound earnings. While the account may not reach the same size as someone who started decades earlier, meaningful savings can still accumulate through regular contributions and disciplined investing.

Workers aged 50 and older also benefit from special catch-up contributions. These higher contribution limits allow older employees to save more each year than younger workers, making it easier to accelerate retirement savings during peak earning years. For many individuals, their highest income occurs later in their careers, providing an opportunity to contribute larger amounts while taking advantage of valuable tax benefits.

Investing in the Vista 401(k) also encourages financial discipline. Contributions are automatically deducted from each paycheck, making saving consistent and effortless. Rather than relying on willpower to transfer money into savings each month, employees build retirement wealth through automatic investing. This disciplined approach helps reduce the temptation to spend money that could instead be working toward long-term financial goals.

It’s also important to remember that retirement is becoming longer for many Americans. Advances in healthcare mean people often spend 20 to 30 years in retirement. Building additional savings—even later in life—can help cover healthcare expenses, housing costs, travel, and everyday living expenses. Every additional dollar invested today has the potential to provide greater financial flexibility in the future.

Many people hesitate to invest because they worry about market volatility. While no investment is risk-free, the Vista 401(k) plan is designed for long-term investing. Market fluctuations are a normal part of investing, and maintaining a diversified portfolio over time can help reduce overall risk. Individuals approaching retirement can also adjust their investment allocations to better match their risk tolerance and retirement timeline.

Ultimately, the best time to begin investing in the Vista 401(k) plan may have been years ago, but the second-best time is today. Every contribution moves you closer to greater financial security, regardless of your age. By taking advantage of tax benefits, automatic savings, and long-term investment growth, you can strengthen your retirement outlook and gain greater confidence about the future. No matter where you are in your career, it’s never too late to invest in yourself and your financial well-being.

Nuts & Bolts: How to Invest Your DROP Funds

How to Invest DROP Funds in Your Traditional Vista 401(k) Account:

• Let the Florida Retirement System (FRS) know you would like to roll your DROP funds into your Traditional Vista 401(k) Account.
• Should you choose to roll your funds into your Traditional Vista 401(k) Plan, the Vista 401(k) Retirement Services Department sends a rollover form to you to complete and return to Retirement Services.

Note: If you do not have a Traditional Vista 401(k) Account, you need only set one up prior to retirement and fund it with at least one payroll contribution. Please be aware that you cannot roll your DROP funds into your Roth Vista 401(k) Retirement Plan.

Why Roll Drop Funds into Your Traditional Vista 401(k) Account: 

• Consolidation: Individuals often accumulate multiple retirement accounts over their career. Consolidating these accounts makes it easier to track performance, adjust asset allocation, and plan for your financial future. Consolidation not only streamlines your financial strategy but also provides a clearer picture of your overall retirement readiness.
• Tax Advantages: DROP funds are treated as income the year they are paid out to participants. If you do not place these funds in a tax-deferred account, the funds will be treated as income in that year. However, if you roll them into a tax-deferred plan like the Traditional Vista 401(k) Plan, taxes will be taken as you withdraw funds over the years. By then you may be in a lower tax bracket.
• Portability: Your DROP funds are portable. This means that should you choose to roll these funds out of your Traditional Vista 401(k) account, you can do so with no waiting period or penalty.

Please call us at (866) 325-1278 if you have any questions. You may also visit Vista401k.com to make changes.

The DROP Box

• Are you enrolled in DROP and close to retiring?
• Do you have questions about what to do with your DROP benefits?
• Would you like to speak with a 401(k) Plan Specialist about your distribution options?

CALL 866-325-1278 or EMAIL 401k@vista401k.com

• If you qualify for normal retirement from the School Board and reach the age of 55, you qualify to withdraw your funds without incurring the age 59½ withdrawal penalty from your Traditional 401(k) Plan. This means that if you choose to rollover your DROP funds to your Traditional Vista 401(k) Account, instead of a traditional IRA, you can withdraw funds before age 59½, without a penalty.

If you entered DROP in 2021, your DROP benefit will be distributed in 2026.

We also accept rollovers from your BENCOR, 403(b) or 457 accounts, so you can have all of your retirement funds in one convenient account. Call us at 866-325-1278 or email us at: 401k@vista401k.com for one-on-one support from our experienced Retirement Services Team.

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The material herein is provided for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. The material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations. Situations differ among individuals and you should not assume that these generalizations or information apply to you. Keep in mind that past performance is no guarantee of future performance, and investments involve the risk of loss of principal and earnings. Additionally, neither your employer nor the plan administrator nor FBMC is able to provide you with investment advice–if you would like specific investment advice, you should consult Cerity Partners or your own personal investment advisor.