LEXINGTON, Ky. — The Police and Fire Pension Fund Board met on August 12 to review second-quarter investment performance, hearing from consultants that the fund grew to nearly $1.1 billion in assets as equity markets staged a broad recovery.

John Jackson and Jim O'Connor of Callan LLC, the fund's investment advisors, presented quarterly results showing domestic equity and international equity each returning approximately 13 percent during the three-month period ending June 30. Domestic fixed income returned 1.2 percent, while real estate added more than 1 percent to the portfolio's value.

The strong performance came as U.S. equities rebounded after weakness in the first quarter. The S&P 500 fell 4 percent in the first quarter before jumping 15.2 percent in the second quarter, Jackson said, erasing earlier losses as oil prices moderated, Middle East tensions eased, and artificial intelligence stocks surged. The technology-heavy growth sector outperformed value stocks, with information technology climbing 32 percent for the quarter.

The board's quarterly meeting also reviewed asset allocation adjustments approved last year that increased domestic fixed income targets to 27 percent of the portfolio while reducing international equity exposure to 19 percent. Jackson noted the changes were designed to balance growth with stability amid geopolitical uncertainty.

The fund faces an unfunded liability of $386.6 million, with a funded ratio of 72.5 percent as of the most recent actuarial valuation, though the board has noted that investment returns in 2025 exceeded the fund's 7 percent assumed rate of return. Employees contribute 12 percent of their salary, while the LFUCG contributes 47.35 percent of salaries to support the fund, which serves sworn members of the Police and Fire divisions.