Your Mutual Fund Owns the Winners. So Why Are Your Returns Lagging?
A Roytrin case study on active management, fees, stock selection; and knowing when to look under the hood.
It is easy to look at a mutual fund’s holdings, see names such as Nvidia, Apple, Microsoft, Alphabet and Amazon, and assume you are getting something close to the performance of the U.S. stock market.
But that is not necessarily how it works.
A fund can own many of the market’s biggest winners and still significantly underperform.
Why?
The answer lies not simply in what a fund owns, but in how much it owns, when it buys and sells, what else sits alongside those investments, how its bond portfolio is managed; and, importantly, how much investors are paying for all of that active decision-making.
The recent performance of the Roytrin TTD Income & Growth Fund provides an interesting case study.
To be clear, this is not an allegation of wrongdoing, nor is it an assessment of any individual portfolio manager. It is simply an investor’s analysis of publicly available fund statements, holdings, fees, and performance data.
The lessons apply well beyond Roytrin.
A good fund does not have to beat the S&P 500
Read that headline again. Roytrin Income & Growth is not an S&P 500 fund.
Its stated objective is to generate income while providing long-term capital appreciation with reasonable capital protection. As at June 2026, only about 55% of the portfolio was invested in USD equities. Roughly 22% was in Trinidad & Tobago government bonds, with additional allocations to money-market instruments and corporate bonds.
So comparing Roytrin's return directly with the S&P 500 and saying, “The S&P did 10%, therefore Roytrin should have done 10%,” would be unfair.
But that does not mean investors should stop there.
The more useful question is:
How did the fund perform compared with what a simple, low-cost portfolio with approximately the same mix of stocks, bonds and cash might have delivered?
That is where things become more interesting.
The performance gap
Roytrin returned 9.99% in 2024, followed by 8.05% in 2025.
For the first six months of 2026, however, the fund returned only 0.40%.
Over that same six-month period, the S&P 500 ETF SPY returned 10.13%, while the iShares MSCI ACWI ETF, a broad global equity portfolio, returned 11.64%.
Again, Roytrin only had around 55%–57% in equities, so those are not appropriate direct benchmarks.
But consider the mathematics.
If approximately 55% of a portfolio had simply been invested in a broad global equity ETF earning 11.64%, that equity sleeve alone would have contributed roughly 6%+ to the overall portfolio, even before receiving any return from the other 40%+ held in bonds and cash.
55% x 11.64% + 45% x 0% = 6.40% Year to June 2026
vs
Roytrin's total return= +0.40%.
In my own reconstruction, using a basic portfolio of global equities, investment-grade bonds and short-term cash at approximately Roytrin's asset allocation, the passive alternative would have produced roughly 6% to 7% in the first half of 2026, compared with Roytrin's 0.40%.
That is not Roytrin's official benchmark and should not be treated as one. It is an analytical comparison designed to answer a simpler question:
Was active management adding value relative to simply owning the underlying markets?
For this period, the answer appears to be no.
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This is where “alpha” matters
Investment professionals often talk about alpha.
The term can sound unnecessarily technical, but the idea is straightforward. If you could buy a broad market cheaply and earn 8%, but an active manager with similar risk earns 10%, the manager may have added value. That additional return is positive alpha.
If the manager earns 5%, despite having access to the same markets and taking similar risk, the active decisions may have produced negative alpha.
This is the real test of active management.
You are not paying an active manager simply to own Nvidia, Apple or government bonds. You can obtain broad exposure to those markets relatively cheaply. You pay the manager to make decisions that should improve outcomes through security selection, position sizing, asset allocation, risk management, or some combination of them.
Interestingly, when RBC advertised in 2024 for the senior portfolio-management role responsible for Roytrin's proprietary funds, the job description specifically referred to managing the funds to outperform their respective designated benchmarks.
This is precisely the standard investors should care about.
Owning good stocks is not the same as building a good portfolio
The June 2026 Roytrin portfolio included Nvidia, Alphabet, Apple, Microsoft, Amazon, Palo Alto Networks, ASML and Quanta Services among its largest holdings.
Several of those companies performed extremely well. Yet my examination of the fund's disclosed holdings also found periods where individual active positions materially detracted from returns.
There were disappointing periods for stocks such as PayPal, Alibaba, Intuitive Surgical and Albemarle. At other times, positions such as Palo Alto Networks, ASML and Quanta produced excellent results.
The point is not that every active pick was bad. The point is that successful investing is about what happens when all the decisions are combined.
A manager can make several excellent calls and still underperform if the losing positions are too large, winners are trimmed too early, too much cash is held during a rally, the bond portfolio struggles, or fees absorb too much of the gross return.
That is why investors should judge a portfolio, not a collection of good-sounding stock names.
And don't forget the bond portfolio
“Income and growth” funds are sometimes viewed as safer because a meaningful portion of the portfolio is invested in bonds.
But bonds involve active decisions too.
Managers decide:
how much interest-rate risk to take, which companies or governments to lend to, what credit quality to accept, and how long to commit capital.
Roytrin's public reports show that its fixed-income positioning changed over time. Its weighted-average duration increased through much of 2025, while its average credit rating was reported at BBB during that period before subsequently returning to BBB+.
The fund's financial statements have also recorded material credit-impairment charges (Niquan exposure?).
That is a useful reminder that a bond allocation does not automatically equal “safe money.”
Credit selection can either add value or destroy it, just as stock selection can.
A management change should trigger questions — not conclusions
Another lesson from this case is what investors should do when the people managing their money change.
RBC's public materials show that its current Senior Portfolio Manager, with direct oversight of its proprietary fund suite, was appointed in 2024. Publicly available information also indicates that the investment research function experienced senior personnel changes around the same period, alongside other leadership changes within RBC Investment Management.
The timing is noteworthy given the subsequent deterioration in relative performance, but timing alone does not establish that the personnel changes caused that underperformance.
Markets change. Portfolios contain inherited positions. Credit problems can predate a new manager. Investment strategies sometimes take years to evaluate properly.
What a management change should do, however, is trigger renewed due diligence.
Investors should be asking:
Has the investment philosophy changed?
Has turnover increased or decreased?
Is the fund still taking the same amount of risk?
What is its actual benchmark, and is it beating it after fees?
Is underperformance coming from asset allocation, stock selection, bond selection, or fees?
And, perhaps most importantly, is the manager still delivering something you can't obtain more simply elsewhere?
Those are questions worth asking of any actively managed fund.
Are my investments performing as well as they can be?
Fees matter even more when alpha disappears
This brings us to cost.
Roytrin's June 2026 statement reports a Management Expense Ratio of 1.94%.
For comparison, ACWI, the broad global equity ETF used in my analysis, currently reports an expense ratio of 0.32%.
Those products are not identical, so the comparison should not be oversimplified.
A mutual fund provides administration, portfolio management, diversification, liquidity, and convenience. A multi-asset fund also does considerably more than a single equity ETF.
But a fee approaching 2% creates a substantial hurdle (although not uncommon in the local mutual fund space).
Before an investor receives any benefit from active management, the manager first has to generate enough value to justify the additional cost.
When positive alpha is being generated, investors may quite reasonably conclude that the fee is worthwhile.
When alpha turns negative, the calculation becomes very different.
Does that mean mutual funds are a bad investment?
Absolutely not. Mutual funds can be extremely useful.
For an investor who is starting with a smaller portfolio, wants immediate diversification, does not want to manage individual securities, values simplicity, or wants professional management without building a full portfolio from scratch, a well-run mutual fund can be an excellent solution.
They can also remain useful building blocks inside larger portfolios.
But as an investor's wealth grows, the economics begin to change.
A high-net-worth investor or successful business owner may eventually have enough capital to own a diversified portfolio of ETFs, individual bonds, and carefully selected securities directly.
At that level, working with a dedicated wealth manager can potentially provide:
greater customization, clearer benchmark accountability, better alignment with cash-flow needs, more control over risk and currency exposure, and, depending on portfolio size and the manager's fee structure, potentially lower all-in costs.
Importantly, it does not guarantee higher returns. No legitimate investment manager can promise that.
But it can allow the investor to ask a different question:
Instead of fitting my wealth into an existing fund, can the portfolio be built around me?
For business owners in particular, that can matter. Your investment portfolio may need to complement business risk, future capital requirements, property exposure, retirement planning, foreign-currency needs, and family goals.
A pooled fund cannot know all of that.
The bigger lesson
The lesson from Roytrin is not that investors should rush to sell Roytrin. Nor is it that passive investing is always better than active management.
The lesson is that fund selection should not stop at the name on the label or the securities in the top-10 holdings.
If you are paying for active management, ask what active management is actually contributing.
Look at performance over multiple periods. Compare it with a reasonable benchmark. Understand the fees. Pay attention when the investment team changes. And distinguish between simply being exposed to a good market and having a manager who is actually adding value.
Because a fund can own some of the world's best companies and still leave a surprising amount of return on the table.
Is your portfolio still doing the job you hired it to do?
As portfolios grow, it can be worthwhile to periodically review whether the funds and investment products you own are still appropriate, not only in terms of returns, but also fees, risk, diversification and how they fit into your broader financial plan.
I work with professionals, business owners and families who want a more deliberate approach to portfolio construction and wealth management.
If you'd like a second opinion on your existing investments, feel free to reach out and have a conversation.
Sometimes simply understanding what you own, what you're paying, and what is driving your returns is the most valuable place to start.
As always, no pressure, just perspective.
- Daniel Tittil, CFA, CAIA, MSc.
Lead Advisor, WealthwithDaniel.com
Portfolio & Wealth Manager, Director, Admiral CapitalChief Investment Officer, Legacy Wealth Management (Cayman) Ltd.
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Important Information
This article is for educational purposes only and does not constitute investment advice. Performance comparisons discussed above use publicly available information and, where indicated, illustrative benchmark portfolios. Past performance is not indicative of future results.
I personally hold units in the Roytrin TTD Income & Growth Fund and other Roytrin-managed funds. These holdings are not material to my overall investment portfolio. This article reflects my independent analysis of publicly available information and is provided for educational purposes only; it should not be construed as investment advice or a recommendation to buy, hold or sell any investment.
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