RBC GAM Seeks New Manager for U.S. Growth Fund After Underperformance

TORONTO, ON – January 09, 2026 – RBC Global Asset Management Inc. (RBC GAM) announced today it has begun a search for a new sub-advisor for its RBC Private U.S. Growth Equity Pool, signaling a significant strategic shift for the fund. The current sub-advisor, Brown Advisory, LLC, which has managed the pool since 2012, will remain in its role until a replacement is secured, with RBC GAM providing direct oversight to ensure a stable transition for investors.

While the official announcement focused on the search process, an analysis of the fund's performance reveals a likely catalyst for the change. The move highlights the proactive stance asset managers are taking to optimize portfolios in a complex and rapidly evolving market, particularly within the high-stakes U.S. growth sector.

A Look Under the Hood: Performance Prompts Review

The decision to replace a sub-advisor is rarely made lightly and is often rooted in a detailed performance review. Data for the RBC Private U.S. Growth Equity Pool shows a consistent and significant period of underperformance against its benchmark, the Russell 1000 Growth Index. This performance gap appears to be a key driver behind RBC GAM's move to seek new management.

As of the end of November 2025, the fund's one-year return stood at a mere 1.7%, starkly contrasting with the benchmark's robust 20.1% gain over the same period. This trend of underperformance extends across longer time horizons as well. Over the past three years, the fund delivered an annualized return of 17.6%, while its benchmark surged ahead with 29.6%. The five-year and ten-year figures tell a similar story, with the fund lagging the index by approximately 10 and 5 percentage points, respectively.

Brown Advisory, known for its fundamental, bottom-up research and concentrated portfolios of 30-40 holdings, focuses on companies with sustainable, above-average earnings growth. While this strategy has seen periods of success, the recent results suggest a disconnect with the market dynamics that have propelled U.S. growth stocks. The fund's top holdings include giants like Microsoft, Amazon, and NVIDIA, but its overall composition has failed to capture the benchmark's momentum.

For an asset manager of RBC GAM's scale, which oversees approximately $790 billion, such persistent underperformance in a key portfolio necessitates action to protect investor interests and maintain the product's competitiveness.

Part of a Broader Strategic Shuffle

This sub-advisor search is not an isolated event but rather the latest in a series of strategic adjustments by RBC GAM. The asset management giant has been actively curating its fund lineup to align with its evolving market outlook and enhance its competitive offerings. This pattern suggests a disciplined, ongoing review process across its entire product suite.

For instance, in late 2025, RBC GAM initiated mergers and investment objective changes for its RBC O'Shaughnessy Funds, with O'Shaughnessy Asset Management ceasing its sub-advisory role. Those assets are being transitioned to RBC's internal Quantitative Investments team, indicating a move to consolidate and leverage in-house expertise. Earlier in the year, the firm appointed BlackRock to sub-advise an international equity index fund, demonstrating a willingness to partner with leading external managers to fill specific mandates.

These moves are taking place against a backdrop of caution from RBC's own market strategists. Recent outlooks from the firm have highlighted concerns about high valuations and concentration risk in U.S. equities after more than a decade of strong performance. By seeking a new manager for its U.S. Growth Equity Pool, RBC GAM may be looking for a sub-advisor whose strategy is better suited to navigate a market environment where outsized gains are expected to diminish and stock selection becomes increasingly critical.

The Sub-Advisory Chess Game

The relationship between a large asset manager and a specialized sub-advisor is a cornerstone of the modern investment industry. Giants like RBC GAM frequently outsource the day-to-day management of specific mandates to boutique firms or specialized teams that possess deep expertise in a particular niche, such as U.S. growth equity. This allows them to offer a diverse range of highly specialized products to their clients.

However, these partnerships are subject to rigorous and continuous evaluation. Beyond lagging performance, common reasons for making a change include strategic misalignment, where a sub-advisor's style no longer fits the parent firm's market view; key personnel changes at the sub-advisory firm; or concerns over risk management protocols. Cost is also a factor, as asset managers face constant pressure to deliver value and keep management expense ratios competitive.

The process of changing a sub-advisor is a carefully managed affair designed to minimize disruption. By announcing that Brown Advisory will stay on during the search and that its own team will provide oversight, RBC GAM is signaling to investors that continuity is a priority. This transitional period gives the firm time to conduct a thorough search for a replacement that aligns with the fund's long-term objectives.

What's Next for Investors and the Pool?

For current and prospective investors in the RBC Private U.S. Growth Equity Pool, the announcement ushers in a period of transition and potential change. While the immediate management remains stable, the fund's future direction will be shaped by the new sub-advisor. Investors and their financial advisors will be keenly watching for an announcement detailing who the new manager will be and, just as importantly, what their investment philosophy entails.

The search will likely focus on firms with a proven track record in U.S. growth investing, robust institutional capabilities, and an investment process that aligns with RBC GAM's forward-looking view of the market. The choice will determine whether the fund pivots to a new style—perhaps one more focused on valuation, or one that takes a different approach to identifying growth opportunities in a mature bull market.

RBC GAM's proactive step underscores a fundamental reality for investors: fund management is not static. As markets evolve, so too must the strategies designed to navigate them. The industry will be watching closely to see which firm RBC GAM selects to steer its U.S. Growth Equity Pool through the complex market landscape ahead.