The New Mexico Deferred Compensation plan has replaced the Fidelity Growth and Income Fund with the Victory Capital Management Diversified Stock Fund. Joann Garcia, manager of deferred compensation for the $250 million 457 plan, said the fund was popular--about 2,000 of 13,000 participants had it in their portfolios--but it was not performing as well as it needed to in order to stay in the plan.

According to data from Morningstar, the Growth and Income Fund returned 19.0% in 2003, but that dropped to 9.8% in 2004 and 2.7% in 2005. Year-to-date it has only returned 3.90%, and over the last five years it has returned 2.94%. Against its peers it has trailed consistently for three years: in 2003 it was -8.6%, -0.3% in 2004, -3.0% in 2005 and -0.6% year-to-date. The Victory fund's returns have been -22.8% in 2002, 35.6% in 2003, 10.2% in 2004, and 9.4% in 2005. Year-to-date it has returned 4.3%. Against its peers it has returned -1.0%, 8.0%, 0.1% and 3.7% over the same period, with a year to date performance of -0.3%.

Separately, the plan has also removed the American Century Ultra fund, and mapped the participants over into another large-cap fund already in the lineup.