Table of Contents

• Q3 2026 Vista Plan Performance and Market Conditions
• September 2026 Plan Performance Chart
• Start Investing in your Vista 401(k) Plan at a Young Age
• Consolidate Your Qualified Retirement Plans into Your Vista 401(k) 
• Market Performance last 100 years
• Nuts and Bolts – How to Invest Your DROP Funds
• The Drop Box
• Helpful Hints

Welcome to Vista 401(k)!

Q3 2026 Plan Performance

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

Vista 401(k) Plan Fund Performance

The third quarter of 2026 brought two gradual but consequential realizations for investors. First, the ceasefire that fueled the second quarter’s rally proved fragile, and there is no clear path to a near-term resolution of the conflict with Iran. Second, the Federal Reserve under Chair Kevin Warsh moved from hawkish rhetoric to action, delivering its first-rate hike of the cycle in September. Remarkably, the US economy and corporate earnings strengthened through it all. For retirement plan sponsors, the quarter offered a different lesson than the first half of the year: headline index resilience can mask a narrowing market underneath, and rising yields are reshaping the role fixed income plays in participant portfolios.

Key Themes:

• Renewed Conflict, Persistent Energy Risk: Renewed clashes in the Strait of Hormuz in July prompted the US to reinstate its blockade of Iran, voiding June’s memorandum of understanding. Oil climbed back toward, and briefly above, $100 per barrel before easing late in the quarter as tanker traffic neared prewar levels.
• The Fed Shifts from Words to Action: After a “hawkish pause” in July, the Fed raised rates 25 basis points in September to 3.75%-4.00%, with the dot plot signaling one more hike in 2026. Central banks in Europe and Japan moved in the same direction.
• Long-Term Yields Break Out: The 10-year Treasury yield climbed from below 4.5% to over 5.2%, its highest level since before the global financial crisis and a full percentage point above where it began the year.
• Growth and Earnings Accelerate: The Atlanta Fed’s GDPNow tracker estimates third-quarter growth at 3.7%, and second-quarter S&P 500 earnings grew 52% year-over-year. With earnings outrunning prices, valuations compressed despite higher rates.
• Breadth Narrows Again: Large-cap technology reclaimed market leadership while the rest of the S&P 500 treaded water and the small-cap Russell 2000 fell more than 8%, reversing much of the broadening that defined in the second quarter.

These dynamics reinforce why diversification is a discipline rather than a forecast. In the second quarter, broad exposure allowed participants to capture a rally led by small-cap, mid-cap, and international stocks. In the third quarter, those same segments lagged while a narrow group of technology names carried the index. Neither outcome was predictable in advance, but a fiduciary framework grounded in broad diversification is designed so participants do not have to guess.

The Plan’s investment lineup remains well positioned for an environment defined by an unresolved geopolitical conflict, a Federal Reserve that has resumed tightening, and long-term interest rates at their highest levels in nearly two decades. Spanning asset classes, geographies, and sectors, the menu provides participants with equity exposure to an economy still growing above trend, alongside fixed income options that now offer meaningfully higher yields than at any point in recent years. Participants who maintain their contribution schedules and allocations through shifting market leadership remain best positioned to achieve durable 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.

Third Quarter 2026 Economic and Market Review & Fourth Quarter Outlook 

The defining feature of the third quarter was the collapse of the second quarter’s fragile ceasefire. By mid-July, renewed clashes in the Strait of Hormuz prompted the United States to reinstate its blockade of Iran, voiding June’s memorandum of understanding and reducing traffic through the Strait to a trickle. Oil, which had fallen back to roughly $70 per barrel by the end of June, climbed toward and briefly above $100 per barrel during the quarter. By quarter-end, reports indicated that Middle Eastern tanker traffic was nearing prewar levels, though investors continue to demand a meaningful risk premium.

Despite the prolonged energy shock, the US economy accelerated. The Atlanta Fed’s GDPNow tracker estimates third-quarter real GDP growth at 3.7%, with capital investment in artificial intelligence continuing to serve as a major structural tailwind. The data center build-out is helping pull the manufacturing sector out of its own recession, with the July ISM Manufacturing PMI posting its best reading since May 2022. Consumers again proved resilient, absorbing roughly $500 per household in added gasoline costs since the conflict began, aided by low household leverage.

The labor market showed signs of emerging from its “no hire, no fire” rut. Payrolls grew to a modest 21,000 in July before accelerating to 162,000 in August, nearly triple economist estimates. With little evidence of widespread layoffs, the unemployment rate fell from 4.3% to 4.1% over the quarter, while wage growth cooled to 3.1% year-over-year.

The Federal Reserve moved decisively. Despite cool inflation readings in June and July, the Fed held rates steady in July with a notably hawkish tone, as three voters dissented in favor of a hike. At the Jackson Hole symposium in August, Chair Warsh brushed aside the recent soft data to emphasize longer-term inflation stickiness and warned that price stability is not self-executing. Following a hotter August CPI report, the FOMC raised rates 25 basis points to 3.75%-4.00% on September 16, with the dot plot signaling one additional hike in 2026. Interest rates rose sharply in response. Long-term Treasury yields broke out of their five-year range, with the 10-year yield climbing from below 4.5% at the start of the quarter to over 5.2%, its highest level since before the global financial crisis. Catalysts included sticky inflation, elevated energy prices, heavy bond issuance from AI hyperscalers, and fiscal concerns.

Equities

Equity investors absorbed everything commodity and bond markets delivered surprisingly well. The S&P 500 set a record high in August and ended the quarter within 1.5% of that peak. Earnings remain the primary tailwind: second-quarter S&P 500 earnings grew 52% year-over-year, the fastest pace since 2021, and an impressive 34% even excluding one-time investment gains at Alphabet and Amazon. With earnings outrunning prices, the forward price-to-earnings ratio compressed from roughly 20.4x to 19x, a level we consider fair at current interest rates. Beneath the surface, however, breadth deteriorated notably. Large-cap technology reclaimed leadership as the Nasdaq-100 pushed higher, the rest of the S&P 500 treaded water, and the small-cap Russell 2000 fell more than 8%, not far from correction territory. With AI-related companies driving most earnings growth and relatively insensitive to rates, the rest of the market is more exposed to multiple contractions as yields rise. 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 upward shift in the yield curve weighed on bond prices during the quarter, but it has also reset the opportunity set for fixed income investors. With Treasury yields at levels not seen in roughly 20 years, the investment-grade market has finally reached fair value after being expensive for much of the past several years. Credit spreads held close to historic lows for most of the quarter before widening slightly at quarter end, still consistent with very low default risk. 

Monetary Policy & Outlook

Chair Warsh has made clear that the Fed’s primary objective is restoring price stability, defined as core PCE inflation returning to 2.0%. With core PCE at 3.0% entering the fourth quarter, there is a high probability of at least one more rate hike in 2026, and futures markets price roughly one-in-three odds that it comes as soon as October. Before the conflict began, inflation was trending steadily towards the target, so any stabilization in energy prices could allow that downward drift to resume. The more significant risk now may be policy that becomes too tight in an economy already absorbing the contractionary effect of higher prices. We expect US growth to settle back toward 2.0% in the fourth quarter as AI capital investment continues to offset the drag from higher energy prices.

Looking Ahead

The central question entering the fourth quarter is whether economic and earnings momentum can continue to offset the pressure from higher financing costs. The trajectory of the Iran conflict remains the most important external variable. Outside of geopolitical disruptions, oil and gas markets would be oversupplied, so any easing of hostilities could bring meaningful energy price relief and help restore the broader market participation seen earlier in the year. We are also watching the shape of the yield curve, where flattening could signal slower growth and an eventual lower rate path, while further steepening would point to a stronger economy and continued upward pressure on rates. Finally, we are monitoring whether global tightening tips into policy error, particularly in Europe, where growth remains anemic.

Retirement Plan Implications

The third quarter delivered a reminder that market leadership rarely moves in a straight line. The small-cap and broader-market segments that led the second quarter’s rally gave back ground, while a narrow group of large-cap technology stocks carried the index. Participants who held diversified allocations did not capture every gain, but they also avoided the concentration risk that comes with chasing the most recent winners. The quarter also brought a meaningful development for fixed income. With Treasury yields near 20-year highs, bonds once again offer real income alongside their traditional role as ballast, an important consideration for participants approaching or in retirement. Committees should continue to reinforce that target-date funds and diversified options remain the appropriate default for most participants, particularly as the Fed has resumed tightening, market breadth has narrowed, and the path of the Iran conflict remains highly uncertain.

September 2026 Fund Performance Chart

Start Investing in Your Vista 401(k) Plan at a Young Age

If you are just starting your career, retirement may be the last thing on your mind. After all, when you’re in your 20s or even your early 30s, retirement is years away. However, one of the smartest financial decisions you can make is to begin investing in your 401(k) plan as early as possible. The earlier you start, the easier it can be to build a comfortable retirement and achieve long-term financial security.

The biggest reason to start early is simple: time. When you invest money in a 401(k), your contributions have years, and sometimes decades, to grow. The money you invest can earn returns, and those returns can generate additional returns over time. This process is called compounding, and it is one of the most powerful tools in investing.

Think of it like rolling a snowball down a hill. At first, the snowball is small and doesn’t seem to grow very quickly. But as it continues rolling, it picks up more snow and becomes larger and larger. Your retirement savings work the same way. The longer your money stays invested, the more opportunity it has to grow.

Consider a simple example. Imagine two employees, Sarah and Ben. Sarah starts contributing $100 per month to her 401(k) at age 25. Ben waits until age 35 to start contributing the same amount. Both continue investing until they turn 65.

By retirement, Sarah will have contributed $48,000, while Ben will have contributed $36,000. Although Sarah only contributed $12,000 more, her retirement account could end up being worth significantly more because she gave her investments an extra ten years to grow. Those additional years of compounding can create a dramatic difference in retirement savings.

Another important benefit of starting young is that you do not have to save as much each month to reach your retirement goals. People who begin investing early can often contribute smaller amounts and still accumulate substantial savings over time. Those who wait may have to contribute much larger portions of their income later in life to catch up. Saving a little now is usually much easier than trying to save a lot later.

Starting young also helps create positive financial habits. Since 401(k) contributions are automatically deducted from your paycheck, saving becomes a regular part of your routine. Over time, you become accustomed to living on the income that remains after your contribution is made. This can make saving feel effortless and help you develop lifelong financial discipline.

Some people avoid investing because they worry about stock market declines. While markets do experience ups and downs, younger investors have a major advantage: time. If the market declines, they typically have many years before retirement for their investments to recover and continue growing. In fact, periods of market downturn often allow investors to purchase more shares at lower prices, which can benefit them when the market rebounds.

Starting a 401(k) early can also provide greater flexibility later in life. A strong retirement account may allow you to retire earlier, reduce financial stress, handle unexpected expenses, or enjoy more freedom in your retirement years. The sooner you begin building that foundation, the more options you may have in the future.

The bottom line is simple. Time is one of the most valuable assets an investor has. Beginning your 401(k) contribution at a young age allows your money to benefit from decades of compound growth and long-term market appreciation. Even small contributions made early can grow into substantial retirement savings. While retirement may seem far away, the decisions you make now can have a tremendous impact on your financial future.

Consolidate Your Qualified Retirement Plans into Your Vista 401(k)

As people change jobs throughout their careers, it is common to accumulate multiple retirement accounts. You may have a 401(k) from a previous employer, a 403(b), a governmental 457 plan, or other qualified retirement plans scattered across several financial institutions. While having multiple accounts is not necessarily a problem, managing them can become complicated over time. Consolidating your qualified retirement plans into your current Vista 401(k) can help simplify your financial life and potentially improve your retirement planning.

One of the most significant benefits of consolidation is simplicity. When retirement savings are spread across multiple accounts, it can be difficult to keep track of balances, investment performance, beneficiary designations, and account statements. By rolling eligible retirement assets into a single 401(k) plan, you can view your retirement savings in one place. This makes it easier to monitor your progress toward retirement goals and make informed decisions about your investments.

Consolidation can also help improve investment management. When money is scattered among several plans, investors may unintentionally duplicate investments or maintain an asset allocation that no longer matches their goals. Combining accounts allows you to evaluate your retirement portfolio as a whole and create an investment strategy that aligns with your risk tolerance, retirement timeline, and financial objectives.

Another advantage is reduced paperwork and administrative burden. Multiple accounts mean multiple statements, websites, passwords, tax forms, and beneficiary records. Over time, it becomes easier to lose track of old retirement plans, especially those associated with employers you left many years ago. Consolidating retirement assets into your current Vista 401(k) can help eliminate unnecessary complexity and reduce the chances of overlooking an account.

Many 401(k) plans offer institutional investment options that may have lower fees than what some individuals can access on their own. Lower fees can have a meaningful impact on long-term savings because every dollar paid in fees is a dollar that is no longer working toward your retirement goals. While fees should never be the sole reason for consolidation, they are an important factor to consider when evaluating your options.

Consolidation may also make retirement income planning easier. As retirement approaches, managing withdrawals from several different accounts can become complicated. Having a larger balance in one account may simplify distribution planning, account maintenance, and tracking required distributions when applicable. A consolidated account can provide a clearer picture of your available retirement resources and make financial planning discussions more productive.

There are also practical benefits related to account maintenance. Beneficiary information, contact details, and investment selections can be updated and reviewed in a single location.

While consolidation offers many advantages, it is important to review the features of both your current 401(k) plan and your existing retirement accounts before making a decision. Some plans may offer unique investment options, favorable distribution provisions, or other benefits that should be carefully evaluated. Individuals should also ensure that any rollover is completed properly to maintain the tax-advantaged status of their retirement savings.

The bottom line is that consolidating qualified retirement plans into your current Vista 401(k) can provide greater organization, simplify investment management, reduce administrative hassle, and make retirement planning more efficient. By bringing your retirement savings together in one place, you can spend less time managing multiple accounts and more time focusing on building a secure financial future.

How the Stock Market Has Performed Over the Last 100 Years

Over the past century, the U.S. stock market has been one of the most successful wealth-building mechanisms in history. Despite wars, recessions, inflation, financial crises, and political uncertainty, stocks have delivered strong long-term returns and rewarded patient investors. Looking back over nearly 100 years helps illustrate both the power of compounding and the importance of maintaining a long-term perspective.

Since 1928, the U.S. stock market, as measured by the S&P 500 and its predecessors, has generated an average annual total return of approximately 10% when dividends are reinvested. After adjusting for inflation, real returns have averaged about 6% to 7% per year. This means that an investment of $100 made in the late 1920s would have grown into several hundred of thousand dollars over time through the combined effects of capital appreciation and reinvested dividends.

The journey, however, was far from smooth. The stock market suffered its most devastating collapse during the Great Depression. Between 1929 and 1932, stock prices fell dramatically, with 1931 producing a loss of nearly 44%, the worst calendar year on record. Yet the market eventually recovered and entered a lengthy period of expansion following World War II. During the 1950s and 1960s, strong economic growth, rising consumer spending, and industrial development helped propel stocks higher. In fact, 1954 remains one of the best years ever for the market, with gains exceeding 50%.

The 1970s presented new challenges. High inflation, oil shocks, and economic stagnation produced a difficult environment for investors. Although stocks generated positive returns over the decade, gains were modest after accounting for inflation. The situation improved dramatically in the 1980s and 1990s as inflation declined, productivity increased, and technological innovation accelerated. These decades produced one of the strongest bull markets in history, culminating in the technology-driven boom of the late 1990s.

The early 2000s reminded investors that markets move in cycles. The bursting of the dot-com bubble led to significant losses, and the 2008 Global Financial Crisis triggered another severe decline. In 2008 alone, the S&P 500 lost approximately 37%. Nevertheless, the market recovered once again, and the decade that followed became one of the longest bull markets on record, driven by low interest rates, corporate earnings growth, and the rise of major technology companies.

The COVID-19 pandemic caused a sharp but relatively brief market decline in 2020. Massive fiscal and monetary support helped fuel a rapid recovery, and stocks reached new highs in subsequent years. Although inflation and rising interest rates created volatility during the early 2020s, the long-term trend remained positive.

The key lesson from the last 100 years is that short-term declines are inevitable, but long-term growth has been remarkably consistent. The market has experienced crashes, recessions, and periods of uncertainty, yet it has repeatedly recovered and reached new highs. For investors with patience, discipline, and a diversified approach, the history of the stock market demonstrates the enduring power of long-term investing.

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.