MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTINGfunds.rbcgam.com/pdf/fs/semi-annual/rbf7380_e.pdf · 24 840 Dave & Buster's Entertainment Inc. 1 645 1 316 6 912 Deckers Outdoor

The accompanying financial statements have been prepared by RBC Global Asset Management Inc. (“RBC GAM”) as manager of the

RBC GAM Investment Funds (the “Funds”) and approved by the Board of Directors of RBC GAM. We are responsible for the information contained

within the financial statements.

We have maintained appropriate procedures and controls to ensure that timely and reliable financial information is produced. The financial

statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”) (and they include certain amounts that are

based on estimates and judgments). The significant accounting policies, which we believe are appropriate for the Funds, are described in Note 3

to the financial statements.

Damon G. Williams, FSA, FCIA, CFA Heidi Johnston, CPA, CAChief Executive Officer Chief Financial OfficerRBC Global Asset Management Inc. RBC GAM Funds

August 8, 2019

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

Unaudited Interim Financial Statements

The accompanying interim financial statements have not been reviewed by the external auditors of the Funds. The external auditors will be

auditing the annual financial statements of the Funds in accordance with Canadian generally accepted auditing standards.

SCHEDULE OF INVESTMENT PORTFOLIO (unaudited) (in $000s)

2019 INTERIM FINANCIAL STATEMENTS

June 30, 2019

The accompanying notes are an integral part of the financial statements.

PHILLIPS, HAGER & NORTH U.S. MULTI-STYLE ALL-CAP EQUITY FUND

Fair % of Net Holdings Security Cost Value Assets

UNITED STATES EQUITIESCommunication Services 74 852 Activision Blizzard Inc. $ 4 330 $ 4 627 53 724 Alphabet Inc., Class A 66 165 76 138 20 258 Alphabet Inc., Class C 22 051 28 674 38 480 CBS Corp. 2 757 2 514 50 765 Charter Communications Inc. 21 356 26 268 575 646 Comcast Corp., Class A 30 599 31 872 30 407 Electronic Arts Inc. 3 710 4 032 342 482 Facebook Inc., Class A 69 691 86 560 117 240 Glu Mobile Inc. 1 019 1 102 335 679 Gray Television Inc. 5 896 7 205 97 732 Nexstar Media Group Inc. 9 233 12 910 91 208 Omnicom Group 9 559 9 791 133 830 Take-Two Interactive Software Inc. 17 478 19 897 221 604 The Walt Disney Company 34 194 40 535 108 107 TripAdvisor Inc. 7 825 6 553 209 259 Twitter Inc. 10 120 9 564 321 426 Verizon Communications Inc. 21 550 24 047 120 200 Vonage Holdings Corp. 1 467 1 786

339 000 394 075 7.0Consumer Discretionary 62 730 Amazon.com, Inc. 107 839 155 290 2 913 Autozone Inc. 4 306 4 189 205 487 Bed Bath & Beyond Inc. 3 945 3 127 55 636 Best Buy Co. Inc. 5 390 5 077 27 760 Bright Horizons Family Solutions Inc. 2 794 5 499 70 742 Brinker International Inc. 3 429 3 645 16 610 Burlington Stores Inc. 3 117 3 699 6 650 Cavco Industries Inc. 1 037 1 372 57 400 Dana Inc. 1 381 1 501 80 621 Darden Restaurants Inc. 11 425 12 848 24 840 Dave & Buster's Entertainment Inc. 1 645 1 316 6 912 Deckers Outdoor Corp. 1 474 1 592 284 746 Destination XL Group Inc. 1 246 656 11 756 Dillards Inc. 823 958 82 488 Dollar General Corp. 13 212 14 598 136 740 Dollar Tree Inc. 17 042 19 230 505 857 eBay Inc. 24 704 26 167 36 061 Expedia Group Inc. 5 886 6 282 3 738 Foot Locker Inc. 246 205 134 928 Ford Motor Company 1 777 1 808 49 416 General Motors Co. 2 413 2 493 34 954 Genuine Parts Co. 4 784 4 739 95 140 G-III Apparel Group Ltd. 4 775 3 665 70 619 Grand Canyon Education Inc. 6 930 10 822 4 740 Helen Of Troy Ltd. 724 811 169 186 Home Depot Inc. 29 143 46 103 135 789 Kohl's Corp. 11 924 8 452 24 191 LCI Industries 1 798 2 848 11 114 Lear Corp. 2 285 2 033 36 280 Lennar Corp. 2 319 2 301


Consumer Discretionary (cont.) 55 870 LKQ Corp. $ 1 504 $ 1 946 13 410 Lowe's Companies 1 947 1 772 87 460 Malibu Boats Inc. 2 601 4 450 23 227 Marriott Vacations Worldwide Corp. 3 044 2 927 7 020 MercadoLibre Inc. 899 5 624 31 790 Mohawk Industries Inc. 7 646 6 132 258 413 Nike Inc. 24 858 28 374 31 910 Nordstrom Inc. 1 984 1 331 7 991 O'Reilly Automotive Inc. 2 471 3 865 29 584 Pulte Corp. 1 094 1 226 95 180 PVH Corp. 14 182 11 796 520 Ralph Lauren Corp. 79 77 122 928 Ross Stores Inc. 13 063 15 956 72 337 Royal Caribbean Cruises Ltd. 11 282 11 479 248 631 Signet Jewelers Ltd. 8 999 5 822 231 556 Starbucks Corp. 19 867 25 420 97 024 Steven Madden Ltd. 2 818 4 314 75 870 Stoneridge Inc. 2 562 3 140 27 605 Tailored Brands Inc. 880 209 91 658 Target Corporation 8 402 10 391 138 010 Taylor Morrison Home Corp. 3 345 3 785 157 380 Tilly's Inc., Class A 3 481 1 578 97 906 TJX Companies Inc. 5 791 6 777 42 100 Tractor Supply Co. 3 776 5 998 173 495 TRI Pointe Homes Inc. 2 950 2 720 28 470 Ulta Salon, Cosmetics & Fragrance, Inc. 12 808 12 937 33 738 Under Armour Inc. 52 981 42 160 Under Armour Inc., Class A 1 816 1 400 88 471 Universal Electronics Inc. 4 050 4 752 16 182 V.F. Corporation 1 595 1 853 43 817 Yum! Brands, Inc. 5 458 6 342 374 141 Zagg Inc. 5 430 3 410

460 547 552 110 9.8Consumer Staples 114 803 Altria Group Inc. 8 895 7 122 28 525 Bunge Ltd. 2 011 2 080 22 700 Casey's General Stores Inc. 3 499 4 637 63 283 Church & Dwight Co. Inc. 3 363 6 055 45 444 Clorox Company 8 892 9 110 214 829 Colgate-Palmolive Company 19 486 20 150 241 290 Conagra Brands Inc. 9 577 8 375 50 497 Costco Wholesale Corp. 12 404 17 470 58 976 Estée Lauder Companies Inc., Class A 10 476 14 135 20 670 Fresh Del Monte Produce Inc. 1 248 729 90 777 Herbalife Nutrition Ltd. 5 644 5 093 173 593 Hostess Brands Inc., Class A 2 982 3 283 20 210 Ingredion Inc. 2 874 2 183 26 480 John B. Sanfilippo & Son Inc. 2 060 2 766 108 740 Kellogg Co. 8 198 7 628 117 742 Kimberly-Clark Corp. 18 067 20 556


June 30, 2019




Consumer Staples (cont.) 61 952 Lamb Weston Holdings Inc. $ 5 868 $ 5 139 19 460 McCormick & Co. Inc. 1 918 3 948 26 064 Medifast Inc. 5 206 4 377 68 753 Molson Coors Brewing Co., Class B 5 515 5 040 305 032 Mondelez International Inc. 19 167 21 531 250 861 PepsiCo Inc. 36 718 43 052 304 148 Philip Morris International Inc. 38 400 31 272 51 300 Post Holdings Inc. 6 348 6 986 13 423 Sysco Corp. 1 296 1 241 15 220 The Andersons Inc. 764 543 400 907 The Coca-Cola Co. 23 086 26 726 40 731 The Hershey Co. 7 570 7 141 57 996 The Kraft Heinz Co. 5 727 2 357 475 702 The Kroger Co. 16 860 13 524 383 511 The Procter & Gamble Co. 44 073 54 976 213 157 Walmart Inc. 20 949 30 828

359 141 390 053 6.9Energy 555 649 Cabot Oil & Gas Corp. 19 767 16 689 518 840 Callon Petroleum Co. 7 821 4 478 111 352 Chevron Corp. 16 591 18 129 33 258 Concho Resources Inc. 6 056 4 495 142 048 ConocoPhillips 11 489 11 354 72 190 Delek US Holdings Inc. 2 859 3 831 19 740 Diamondback Energy Inc. 2 868 2 817 149 750 EOG Resources Inc. 19 514 18 274 585 187 Exxon Mobil Corp. 63 349 58 724 323 618 Halliburton Co. 12 234 9 637 112 000 Hess Corp. 9 577 9 322 345 702 Kinder Morgan Inc. 8 917 9 446 274 650 Magnolia Oil & Gas Corp., Class A 4 852 4 165 138 341 Marathon Oil Corp. 3 279 2 574 80 835 Marathon Petroleum Corp. 7 483 5 915 65 140 Par Pacific Holdings Inc. 1 701 1 752 25 170 Phillips 66 Company 3 461 3 082 13 849 Pioneer Natural Resources Co. 3 070 2 789 18 738 Plains GP Holdings LP 598 613 107 698 Renewable Energy Group Inc. 3 364 2 237 125 262 Ring Energy Inc. 1 910 533 424 274 The Williams Companies Inc. 15 669 15 571 47 040 Whiting Petroleum Corp. 1 921 1 150

228 350 207 577 3.7Financials 601 239 Ally Financial Inc. 19 800 24 380 41 808 American Express Company 5 417 6 760 18 730 American Financial Group Inc. 2 227 2 511 202 205 American International Group Inc. 13 935 14 104 133 149 Ameriprise Financial Inc. 25 359 25 317 87 761 Amerisafe Inc. 4 441 7 329 83 061 Aon Plc. 17 579 20 976 256 935 AXA Equitable Holdings Inc. 7 474 7 032 14 260 Bancfirst Corp. 497 1 039 1 382 383 Bank of America Corp. 39 058 52 499 270 307 Berkshire Hathaway Inc., Class B 66 536 75 212 30 885 BlackRock Inc. 16 979 18 959 11 541 Brighthouse Financial Inc. 709 555 102 900 Brown & Brown Inc. 2 017 4 512


Financials (cont.) 8 199 Capital One Financial Corp. $ 955 $ 974 194 979 Chemical Financial Corp. 11 832 10 497 92 773 Chubb Ltd. 15 887 17 890 256 792 CIT Group Inc. 16 234 17 588 559 122 Citigroup Inc. 43 741 51 239 378 322 Citizens Financial Group Inc. 16 140 17 518 31 602 CME Group Inc., Class A 6 045 8 033 82 540 Columbia Financial Inc. 1 677 1 632 89 346 Comerica Inc. 9 917 8 496 27 900 Community Bank System Inc. 1 705 2 404 650 083 Compass Diversified Holdings 13 335 16 256 47 968 Discover Financial Services 4 516 4 874 268 485 E*TRADE Financial Corp. 17 049 15 681 10 611 Factset Research Systems Inc. 2 484 3 979 76 580 First Busey Corp. 3 038 2 651 121 210 FNF Group 5 749 6 385 186 803 Franklin Resources Inc. 8 458 8 507 46 615 Hartford Financial Services Inc. 3 001 3 399 77 510 Heritage Financial Corp. 2 461 2 996 12 040 Intercontinental Exchange, Inc. 1 299 1 352 117 814 Janus Henderson Group Plc. 3 687 3 307 23 944 Jefferies Financial Group Inc. 641 603 454 496 JPMorgan Chase & Co. 52 178 66 527 113 593 LegacyTexas Financial Group Inc. 5 922 6 056 94 079 Legg Mason Inc. 4 247 4 714 1 360 Markel Corp. 1 884 1 934 52 820 Mercantile Bank Corp. 2 073 2 254 234 066 MetLife Inc. 13 956 15 220 52 391 Moody's Corp. 13 340 13 476 414 479 Morgan Stanley 22 768 23 779 18 252 MSCI Inc. 3 300 5 706 91 659 Navient Corp. 1 705 1 638 103 334 Northern Trust Corp. 13 031 12 184 33 460 Northrim BanCorp Inc. 1 497 1 563 136 236 Pacific Premier Bancorp Inc. 5 130 5 512 75 110 PacWest Bancorp 5 243 3 819 57 270 Pinnacle Financial Partners Inc. 4 728 4 311 121 994 Popular Inc. 7 821 8 665 13 560 Preferred Bank 839 839 49 430 Raymond James Financial Corp. 3 642 5 472 130 581 Regions Financial Corp. 1 747 2 552 13 130 Reinsurance Group of America Inc. 2 153 2 683 33 300 RLI Corp. 2 623 3 737 8 824 S&P Global Inc. 1 556 2 633 43 118 Signature Bank 7 240 6 826 40 918 State Street Corp. 3 247 3 005 109 310 Sterling Bancorp 2 591 3 050 103 555 Suntrust Banks Inc. 8 356 8 516 57 520 Synchrony Financial 2 253 2 609 40 320 Synovus Financial Corp. 1 972 1 851 97 074 T. Rowe Price Group Inc. 12 629 13 947 71 990 Texas Capital Bancshares Inc. 6 795 5 786 77 671 The Progressive Corp. 6 948 8 130 214 400 United Community Banks Inc. 6 994 8 012 308 627 Voya Financial Inc. 18 117 22 324 406 980 Wells Fargo & Company 27 298 25 212 12 321 Willis Towers Watson Plc. 2 867 3 090 34 480 Wintrust Financial Corp. 3 357 3 303

693 926 778 381 13.9


June 30, 2019




Health Care 387 073 Abbott Laboratories $ 34 507 $ 42 485 67 589 AbbVie Inc. 7 335 6 437 13 600 Abiomed Inc. 3 070 4 639 8 767 Align Technology Inc. 2 622 3 142 97 229 AmerisourceBergen Corp. 10 683 10 860 81 148 Amgen Inc. 19 481 19 580 3 440 Anthem Inc. 1 149 1 271 16 160 Bio-Techne Corp. 3 959 4 412 317 276 Boston Scientific Corp. 12 617 17 851 309 005 Bristol-Myers Squibb Co. 21 929 18 341 5 499 Bruker Corp. 281 360 122 191 Cardinal Health Inc. 7 683 7 537 94 514 Centene Corp. 5 997 6 489 36 180 Cooper Co. Inc. 12 344 15 934 35 267 Corcept Therapeutics Inc. 622 515 168 785 Danaher Corp. 24 499 31 584 27 850 DaVita Inc. 2 508 2 053 78 753 Elanco Animal Health Inc. 3 107 3 487 252 573 Eli Lilly & Co. 32 995 36 640 88 996 Emergent Biosolutions Inc. 4 807 5 630 118 343 Exelixis Inc. 3 678 3 314 150 643 Globus Medical Inc., Class A 5 836 8 351 53 215 HCA Healthcare Inc. 9 224 9 424 41 440 HealthEquity Inc. 2 329 3 549 34 351 Henry Schein Inc. 1 984 3 144 14 040 IDEXX Laboratories Inc. 3 137 5 062 16 360 Incyte Corporation Ltd. 1 767 1 820 40 525 Innoviva Inc. 757 773 23 942 Ionis Pharmaceuticals Inc. 2 293 2 015 57 363 Jazz Pharmaceuticals Plc. 10 431 10 709 414 378 Johnson & Johnson 67 553 75 474 43 310 Laboratory Corp. of America Holdings 8 258 9 804 16 560 Masimo Corp. 1 825 3 227 114 616 McKesson Corp. 19 924 20 165 327 086 Medtronic Plc. 37 424 41 716 619 950 Merck & Co. Inc. 55 644 68 086 4 630 Mettler-Toledo International Inc. 2 686 5 087 85 917 PerkinElmer Inc. 10 752 10 839 906 140 Pfizer Inc. 44 581 51 423 25 130 STERIS Plc. 2 487 4 897 12 420 Teleflex Inc. 4 425 5 384 100 141 Thermo Fisher Scientific Inc. 26 471 38 503 15 132 United Therapeutics Corp. 2 620 1 547 48 827 UnitedHealth Group Incorporated 12 106 15 599 18 680 Varian Medical Systems Inc. 2 313 3 329 8 486 Veeva Systems Inc. 810 1 801 35 244 Vertex Pharmaceuticals Inc. 7 616 8 464 14 706 Waters Corp. 3 086 4 145 54 012 West Pharmaceutical Services Inc. 4 651 8 847 27 920 Zoetis Inc. 3 110 4 143

571 973 669 888 11.9


Industrials 695 480 ACCO Brands Corp. $ 8 110 $ 7 168 16 450 Acuity Brands Inc. 4 294 2 971 37 830 ADT Inc. 372 303 70 500 Allegion Plc. 9 502 10 205 47 682 Allison Transmission Holdings Inc. 2 766 2 894 34 337 Ametek Inc. 1 836 4 083 6 914 Arconic Inc. 213 234 198 560 Arcosa Inc. 7 120 9 713 8 286 Armstrong World Industries Inc. 817 1 055 114 362 Astronics Corp. 4 672 6 023 71 480 BMC Stock Holdings Inc. 1 991 1 984 70 557 Boeing Co. 16 261 33 643 38 393 C.H. Robinson Worldwide Inc. 4 632 4 241 20 415 Carlisle Cos. Inc. 2 853 3 754 46 940 Casella Waste Systems Inc., Class A 763 2 436 111 960 Caterpillar Inc. 19 672 19 988 30 080 Clean Harbors Inc. 1 777 2 803 285 646 Columbus McKinnon Corp. 8 764 15 700 49 900 Copart Inc. 1 315 4 884 133 856 Cummins Engine Inc. 28 421 30 026 101 554 Deere & Co. 21 604 22 044 51 085 Dover Corp. 6 522 6 702 150 724 Ducommun Inc. 5 502 8 896 172 596 Eaton Corp Plc. 16 983 18 840 66 280 EnerSys 4 965 5 949 211 442 Expeditors International of Washington, Inc. 20 245 21 005 14 397 FedEx Corporation 3 330 3 097 95 542 Gardner Denver Holdings Inc. 3 153 4 329 908 351 General Electric Company 13 733 12 490 55 128 Graco Inc. 3 045 3 623 5 620 Grainger (W.W.) Inc. 2 076 1 974 7 227 Harris Corp. 1 847 1 791 263 675 Honeywell International Inc. 53 354 60 296 55 575 IHS Markit Ltd. 2 440 4 637 126 906 Ingersoll-Rand Plc., Class A 17 866 21 048 44 366 Insperity Inc. 6 210 7 096 57 017 Insteel Industries Inc. 1 298 1 555 7 010 ITT Inc. 533 601 18 880 J.B. Hunt Transport Services Inc. 1 673 2 259 88 834 Jacobs Engineering Group Inc. 8 628 9 814 25 521 Johnson Controls International Plc. 1 319 1 381 38 210 Kansas City Southern Industries Inc. 5 676 6 092 188 890 Kennametal Inc. 9 141 9 141 12 860 Kirby Corp. 1 318 1 330 30 600 L3 Technologies Inc. 9 580 9 855 37 513 Landstar System Inc. 3 835 5 307 12 816 Lennox International Inc. 3 654 4 608 48 497 Lockheed Martin Corporation 22 009 23 082 47 763 Manpower Inc. 5 924 6 037 73 776 Marten Transport Ltd. 1 667 1 754 13 510 Middleby Corp. 1 623 2 401 22 770 Miller (Herman) Inc. 951 1 333 49 260 Moog Inc., Class A 5 244 6 034 29 660 MSC Industrial Direct Co. 2 889 2 884 885 Nielsen Holdings Plc. 29 26 153 149 NN Inc. 4 293 1 954 21 310 NV5 Global Inc. 1 691 2 272 27 660 Old Dominion Freight Line Inc. 4 966 5 407


June 30, 2019




Industrials (cont.) 48 411 Oshkosh Truck Corp. $ 4 900 $ 5 296 85 260 Owens Corning 7 038 6 498 185 004 Patrick Industries Inc. 9 702 11 917 210 750 Pentair Plc. 12 262 10 272 51 400 PGT Innovations Inc. 1 366 1 125 13 927 Republic Services Inc. 1 148 1 580 151 681 Robert Half International Inc. 12 356 11 324 77 055 Rockwell Automation Inc. 18 357 16 527 36 671 Rollins Inc. 1 617 1 722 50 450 Smith (A.O.) Corp. 3 521 3 116 48 716 Southwest Airlines 3 218 3 241 7 070 Spirit Airlines Inc. 439 442 86 295 Stanley Black & Decker Inc. 15 267 16 337 11 330 Teledyne Technologies Inc. 2 614 4 057 151 022 The Greenbrier Co. Inc. 7 716 6 012 14 370 Trex Co. Inc. 1 156 1 349 166 640 Trinity Industries 6 956 4 534 199 378 Union Pacific Corp. 38 877 44 154 143 227 United Continental Holdings Inc. 15 928 16 418 80 511 United Parcel Service Inc. 11 524 10 888 27 921 United Technologies Corp. 4 353 4 758 21 700 Verisk Analytics Inc. 1 668 4 161 19 860 WABCO Holdings Inc. 3 433 3 438 42 762 Wabtec Corp. 4 525 4 018 41 870 Waste Connections Inc. 2 025 5 239 77 058 Waste Management Inc. 9 359 11 644 4 202 WESCO International Inc. 296 279 41 550 Woodward Inc. 2 900 6 159

611 488 689 557 12.3Information Technology 128 937 Accenture Plc., Class A 19 790 31 191 71 634 Adobe Inc. 20 038 27 641 425 598 Advanced Micro Devices Inc. 16 101 16 926 34 710 Akamai Technologies Inc. 3 079 3 643 8 500 Alliance Data Systems Corp. 2 905 1 560 21 070 Ambarella Inc. 1 604 1 218 60 934 Amdocs Ltd. 5 115 4 956 17 610 Ansys Inc. 1 531 4 723 494 603 Apple Inc. 92 224 128 194 170 094 Applied Materials Inc. 7 713 10 004 11 000 Arista Networks Inc. 2 428 3 740 34 987 Aspen Technology Inc. 3 656 5 694 92 487 Autodesk Inc. 15 951 19 730 42 877 Automatic Data Processing Inc. 8 891 9 283 114 760 AXT Inc. 1 013 595 38 808 Broadcom Inc. 11 615 14 629 116 956 Cadence Design Systems Inc. 7 261 10 849 35 700 CDW Corp. 3 051 5 189 733 685 Cisco Systems Inc. 40 031 52 484 193 253 Citrix Systems Inc. 27 138 24 837 59 390 Cognizant Technology Solutions Corp., Class A 5 785 4 930 7 540 Coherent Inc. 2 035 1 347 135 240 Cohu Inc. 4 154 2 733 207 951 Cypress Semiconductor Corp. 3 708 6 056 133 450 DXC Technology Co. 9 645 9 634 27 850 Envestnet Inc. 2 430 2 494


Information Technology (cont.) 426 EPAM Systems Inc. $ 96 $ 97 15 050 Euronet Worldwide Inc. 1 532 3 317 114 184 F5 Networks Inc. 23 460 21 776 89 850 Fidelity National Information Services Inc. 14 545 14 430 160 533 Fortinet Inc. 14 398 16 149 87 450 Global Payments Inc. 15 091 18 334 21 139 HP Inc. 485 576 403 735 Intel Corp. 20 954 25 309 24 994 InterDigital Inc. 1 837 2 108 44 392 Intuit Inc. 8 269 15 192 14 400 Jack Henry & Associates Inc. 2 651 2 525 80 659 Lam Research Corp. 18 829 19 841 14 470 Littelfuse Inc. 3 517 3 352 67 243 Manhattan Associates Inc. 4 828 6 105 148 061 Mastercard Inc. 25 604 51 281 29 750 Microchip Technology Inc. 3 391 3 376 141 838 Micron Technology Inc. 7 795 7 168 1 164 727 Microsoft Corp. 107 188 204 325 136 460 Mitek Systems Inc. 2 062 1 776 41 360 MKS Instruments Inc. 3 703 4 220 80 040 Model N Inc. 1 887 2 061 117 817 NetApp Inc. 10 966 9 520 47 390 Novanta Inc. 2 656 5 852 35 173 Nuance Communications Inc. 796 736 60 366 Nvidia Corp. 15 647 12 978 10 918 NXP Semiconductor N.V. 1 182 1 395 306 926 Oracle Corporation 19 277 22 848 7 454 Palo Alto Networks Inc. 1 898 1 988 19 706 Paychex Inc. 1 608 2 124 18 713 Paycom Software Inc. 3 267 5 518 224 688 PayPal Holdings Inc. 24 451 33 674 52 530 PC Connection Inc. 1 938 2 406 25 150 PTC Inc. 2 943 2 956 175 363 QUALCOMM Inc. 14 964 17 466 41 000 RealPage Inc. 3 354 3 161 46 489 Salesforce.com Inc. 5 712 9 225 94 826 Sapiens International Corp. N.V. 1 416 2 064 29 958 ServiceNow Inc. 9 345 10 812 35 767 Synchronoss Technologies Inc. 1 320 371 52 753 SynOpsys Inc. 5 662 8 900 42 189 Teradyne Inc. 2 624 2 647 34 059 Tessco Technologies Inc. 733 797 169 214 Texas Instruments Inc. 21 927 25 387 17 468 Tyler Technologies Inc. 2 846 4 937 113 498 Verisign Inc. 21 729 31 088 88 910 Viavi Solutions Inc. 1 453 1 547 241 692 Visa Inc., Class A 35 618 54 653 50 263 Vishay Precision Group Inc. 1 985 2 674 6 024 VMware Inc. 1 394 1 319 24 690 WEX Inc. 3 910 6 732 19 853 Xerox Corp. 872 920 48 291 Xilinx Inc. 7 870 7 457 40 009 Zebra Technologies Corp. 5 211 10 982

837 588 1 132 732 20.2


June 30, 2019



Materials 22 039 Air Products & Chemicals Inc. $ 5 172 $ 6 532 32 570 Aptargroup Inc. 2 495 5 306 67 215 Celanese Corp. 9 304 9 489 55 255 CF Industries Holdings Inc. 2 998 3 378 17 406 Corteva Inc. 634 674 116 430 Domtar Corp. 7 310 6 790 89 435 Dow Inc. 6 886 5 766 17 406 DuPont de Nemours Inc. 2 298 1 710 54 280 Eagle Materials Inc. 5 222 6 589 47 601 Eastman Chemical Company 4 910 4 855 13 922 Ecolab Inc. 3 197 3 588 21 061 Element Solutions Inc. 311 285 49 760 Fuller (H.B.) Co. 3 265 3 021 43 595 FutureFuel Corp. 630 667 367 187 Huntsman Corp. 13 598 9 841 23 810 Ingevity Corp. 2 905 3 279 25 480 International Flavors & Fragrances Inc. 4 699 4 842 47 386 International Paper Co. 2 896 2 690 18 160 Kaiser Aluminum Corp. 2 198 2 321 89 276 Koppers Holdings Inc. 2 863 3 440 43 300 Linde Plc. 10 307 11 386 112 540 LyondellBasell Industries N.V. 14 805 12 699 194 185 Newmont Goldcorp Corporation 8 096 9 779 487 611 Omnova Solutions Inc. 4 815 3 997 114 949 PPG Industries Inc. 17 134 17 560 22 100 Reliance Steel & Aluminum Co. 2 152 2 738 100 738 Steel Dynamics Inc. 4 498 3 986 32 936 The Chemours Co. 1 670 1 034 326 718 The Mosaic Co. 13 644 10 716 109 160 Universal Stainless & Alloy 3 244 2 284 94 439 WestRock Co. 5 321 4 505

169 477 165 747 2.9Real Estate 17 200 Alexandria Real Estate Equities Inc. 2 483 3 176 43 761 Apple Hospitality Inc. Real Estate Investment Trust 1 043 909 44 037 AvalonBay Communities Inc. Real Estate Investment Trust 11 656 11 717 7 590 Boston Properties Inc. 1 195 1 281 112 252 Brixmor Property Group Inc. Real Estate Investment Trust 2 562 2 631 88 374 CBL & Associates Properties Inc. 1 297 119 146 652 CBRE Group Inc. 9 796 9 852 155 511 Columbia Property Trust Inc. Real Estate Investment Trust 4 557 4 224 55 960 Community Healthcare Trust Inc. Real Estate Investment Trust 1 848 2 883 89 418 Crown Castle International Corp. Real Estate Investment Trust 13 148 15 254 49 890 CubeSmart Real Estate Investment Trust 1 893 2 187 428 570 DiamondRock Hospitality Co. Real Estate Investment Trust 6 175 5 803 22 938 Digital Realty Trust Inc. 3 529 3 537 23 740 EastGroup Properties Inc. Real Estate Investment Trust 2 893 3 606



Real Estate (cont.) 39 734 Equity Commonwealth Real Estate Investment Trust $ 1 759 $ 1 691 19 915 Extra Space Storage Inc. Real Estate Investment Trust 2 401 2 767 74 851 First Industrial Realty Trust Inc. Real Estate Investment Trust 2 886 3 601 36 155 Gaming and Leisure Properties Inc. Real Estate Investment Trust 1 569 1 847 148 683 HCP Inc. Real Estate Investment Trust 6 223 6 224 85 521 Healthcare Trust of America Inc. Real Estate Investment Trust 3 446 3 072 24 130 Highwoods Properties Inc. 1 579 1 306 147 170 Hospitality Properties Trust 5 446 4 822 38 703 Hudson Pacific Properties Inc. Real Estate Investment Trust 1 762 1 688 198 425 Invitation Homes Inc. Real Estate Investment Trust 7 058 6 942 29 710 Lamar Advertising Co., Class A Real Estate Investment Trust 3 179 3 140 234 235 Medical Properties Trust Inc. Real Estate Investment Trust 5 285 5 345 29 840 National Storage Affiliates Trust Real Estate Investment Trust 1 014 1 130 9 446 Paramount Group Inc. Real Estate Investment Trust 183 173 119 221 Park Hotels & Resorts Inc. Real Estate Investment Trust 4 644 4 300 109 780 Physicians Realty Trust Real Estate Investment Trust 2 717 2 507 24 602 Piedmont Office Realty Trust Inc., Class A Real Estate Investment Trust 640 641 54 821 ProLogis Inc. Trust 4 778 5 748 30 324 Public Storage Inc. Real Estate Investment Trust 9 336 9 456 79 871 Senior Housing Properties Trust Real Estate Investment Trust 1 801 867 61 664 Simon Property Group Inc. 14 567 12 901 25 861 SL Green Realty Corp. Real Estate Investment Trust 3 206 2 714 82 980 STAG Industrial Inc. Real Estate Investment Trust 3 014 3 290 15 400 Terreno Realty Corp. Real Estate Investment Trust 557 988 173 280 The Geo Group Inc. Real Estate Investment Trust 5 049 4 764 5 210 The Howard Hughes Corp. 839 845 102 210 UMH Properties Inc. Real Estate Investment Trust 1 961 1 661 1 420 931 VEREIT Inc. Real Estate Investment Trust 15 929 16 766 249 150 VICI Properties Inc. Real Estate Investment Trust 6 917 7 186 449 860 Weyerhaeuser Company Ltd. 16 072 15 508

199 892 201 069 3.6


June 30, 2019




Utilities 98 540 AES Corp. $ 1 469 $ 2 163 12 805 Ameren Corporation 1 025 1 259 67 855 CMS Energy Corp. 3 941 5 146 23 340 Consolidated Edison Inc. 2 765 2 680 67 266 Dominion Energy Inc. 6 812 6 809 83 896 DTE Energy Company 11 992 14 047 40 180 Evergy Inc. 2 794 3 166 721 Eversource Energy 74 72 259 926 Exelon Corp. 16 317 16 318 203 687 FirstEnergy Corporation 11 174 11 419 45 524 Hawaiian Electric Industries Inc. 2 578 2 595 77 336 NextEra Energy Inc. 16 936 20 747 9 730 NorthWestern Corp. 669 919 405 622 NRG Energy Inc. 18 594 18 647 29 373 Pinnacle West Capital Corp. 3 742 3 618 72 160 Portland General Electric Co. 3 840 5 121 153 187 Public Service Enterprise Group 11 772 11 795 30 280 Southwest Gas Holdings Inc. 3 183 3 551 102 530 Spire Inc. 8 481 11 268 86 610 UGI Corp. 6 275 6 055 202 290 Vistra Energy Corp. 5 456 5 998 215 802 Xcel Energy Inc. 15 295 16 812

155 184 170 205 3.0TOTAL UNITED STATES EQUITIES 4 626 566 5 351 394 95.2UNDERLYING FUNDS 286 000 iShares Core S&P 500 ETF 110 145 110 389 13 500 iShares Russell 2000 ETF 2 496 2 757

TOTAL UNDERLYING FUNDS 112 641 113 146 2.0SHORT-TERM INVESTMENTS* 196 667 194 798 3.5TOTAL INVESTMENTS $ 4 935 874 5 659 338 100.7OTHER NET ASSETS (LIABILITIES) ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (41 819) (0.7)NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 5 617 519 100.0

* Short-term investments, which may be made up of treasury bills, commercial paper, term deposits and discount notes, earn interest at rates ranging from 2.30% to 2.41% and mature between July 3, 2019 and September 12, 2019.

FINANCIAL STATEMENTS (unaudited)

The accompanying notes are an integral part of these financial statements.


Statements of Financial Position (unaudited) (in $000s except per unit amounts)

(see note 2 in the generic notes)June 30

2019December 31

2018

ASSETSInvestments at fair value $ 5 659 338 $ 5 003 150Cash 12 541 10 597Due from investment dealers 1 234 1 111Subscriptions receivable 1 382 38Dividends receivable, interest accrued and other assets 3 883 5 254TOTAL ASSETS 5 678 378 5 020 150LIABILITIESDue to investment dealers 59 682 1 332Redemptions payable 877 81Accounts payable and accrued expenses 300 283TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 60 859 1 696NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 5 617 519 $ 5 018 454

Investments at cost $ 4 935 874 $ 4 613 143

NAV SERIES A $ 3 717 $ 3 349 ADVISOR SERIES $ 1 042 $ 912 SERIES D $ 36 505 $ 34 661 SERIES F $ 8 194 $ 7 071 SERIES O $ 5 568 061 $ 4 972 461NAV PER UNIT SERIES A $ 17.52 $ 15.71 ADVISOR SERIES $ 17.55 $ 15.73 SERIES D $ 18.39 $ 16.41 SERIES F $ 18.29 $ 16.31 SERIES O $ 18.06 $ 16.05

Statements of Comprehensive Income (unaudited) (in $000s except per unit amounts)

For the periods ended June 30 (see note 2 in the generic notes) 2019 2018

INCOME (see note 3 in the generic notes)Dividends $ 47 841 $ 51 293Interest for distribution purposes 1 644 406Income from investment trusts 4 825 –Derivative income 60 (1 200)Net realized gain (loss) on investments 251 876 256 063Change in unrealized gain (loss) on investments 333 457 136 285TOTAL NET GAIN (LOSS) ON INVESTMENTS AND DERIVATIVES 639 703 442 847Securities lending revenue (see note 7 in the generic notes) 263 231Net gain (loss) on foreign cash balances (619) 1 547TOTAL OTHER INCOME (LOSS) (356) 1 778TOTAL INCOME (LOSS) 639 347 444 625EXPENSES (see notes – Fund Specific Information)Management fees 216 210Administration fees 1 371 1 367Independent Review Committee costs 1 1GST/HST 194 193Transaction costs 1 235 705Withholding tax 7 265 8 317TOTAL EXPENSES 10 282 10 793INCREASE (DECREASE) IN NAV $ 629 065 $ 433 832INCREASE (DECREASE) IN NAV SERIES A $ 389 $ 244 ADVISOR SERIES $ 102 $ 58 SERIES D $ 4 118 $ 2 684 SERIES F $ 879 $ 420 SERIES O $ 623 577 $ 430 426INCREASE (DECREASE) IN NAV PER UNIT SERIES A $ 1.82 $ 1.24 ADVISOR SERIES $ 1.77 $ 1.21 SERIES D $ 2.00 $ 1.33 SERIES F $ 1.99 $ 1.29 SERIES O $ 2.02 $ 1.44




Statements of Cash Flow (unaudited) (in $000s)


CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 629 065 $ 433 832ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Non-cash distributions from underlying funds – –Net realized loss (gain) on investments (251 876) (256 063)Change in unrealized loss (gain) on investments (333 457) (136 285)(Increase) decrease in accrued receivables 1 371 485Increase (decrease) in accrued payables 17 6(Increase) decrease in margin accounts – –Cost of investments purchased (5 350 810) (2 348 273)Proceeds from sale and maturity of investments 5 338 182 2 538 782NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 32 492 232 484CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 72 370 116 771Cash paid on redemption of redeemable units (102 918) (339 221)Distributions paid to holders of redeemable units – –NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (30 548) $ (222 450)Net increase (decrease) in cash for the period 1 944 10 034Cash (bank overdraft), beginning of period 10 597 14 120CASH (BANK OVERDRAFT), END OF PERIOD $ 12 541 $ 24 154

Interest received (paid) $ 1 554 $ 412Income received from investment trusts $ 4 227 $ –Dividends received, net of withholding taxes $ 42 636 $ 43 455




Statements of Changes in NAV (unaudited) (in $000s)

For the periods ended June 30 (see note 2 in the generic notes)

Series A Advisor Series Series D Series F2019 2018 2019 2018 2019 2018 2019 2018

NAV AT BEGINNING OF PERIOD $ 3 349 $ 3 479 $ 912 $ 760 $ 34 661 $ 36 102 $ 7 071 $ 3 877INCREASE (DECREASE) IN NAV 389 244 102 58 4 118 2 684 879 420Early redemption fees – – – – – – – –Proceeds from redeemable units issued 322 439 116 115 1 673 3 708 1 861 4 025Reinvestments of distributions to holders of redeemable units – – – – 1 – – –Redemption of redeemable units (343) (438) (88) (15) (3 947) (3 683) (1 617) (882)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (21) 1 28 100 (2 273) 25 244 3 143Distributions from net income – – – – (1) – – –Distributions from net gains – – – – – – – –Distributions from capital – – – – – – – –TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS – – – – (1) – – –NET INCREASE (DECREASE) IN NAV 368 245 130 158 1 844 2 709 1 123 3 563NAV AT END OF PERIOD $ 3 717 $ 3 724 $ 1 042 $ 918 $ 36 505 $ 38 811 $ 8 194 $ 7 440

For the periods ended June 30 (see note 2 in the generic notes)

Series O Total2019 2018 2019 2018

NAV AT BEGINNING OF PERIOD $ 4 972 461 $ 5 292 729 $ 5 018 454 $ 5 336 947INCREASE (DECREASE) IN NAV 623 577 430 426 629 065 433 832Early redemption fees – – – –Proceeds from redeemable units issued 69 861 108 985 73 833 117 272Reinvestments of distributions to holders of redeemable units – – 1 –Redemption of redeemable units (97 838) (334 589) (103 833) (339 607)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (27 977) (225 604) (29 999) (222 335)Distributions from net income – – (1) –Distributions from net gains – – – –Distributions from capital – – – –TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS – – (1) –NET INCREASE (DECREASE) IN NAV 595 600 204 822 599 065 211 497NAV AT END OF PERIOD $ 5 568 061 $ 5 497 551 $ 5 617 519 $ 5 548 444

NOTES TO FINANCIAL STATEMENTS – FUND SPECIFIC INFORMATION (unaudited)

Please see the generic notes at the back of the financial statements.

June 30, 2019


General information (see note 1 in the generic notes)

The investment objective of the Fund is to provide investors

with long-term capital growth by investing in shares of

high-quality U.S. companies.

Financial instrument risk and capital management (see note 5 in the generic notes)

Concentration risk (%)

The table below summarizes the Fund’s investment exposure

(after consideration of derivative products, if any) as at:

Investment mixJune 30

2019December 31

2018

Information Technology 20.2 21.1 Financials 13.9 13.5 Industrials 12.3 10.5 Health Care 11.9 15.0 Consumer Discretionary 9.8 11.2 Communication Services 7.0 7.5 Consumer Staples 6.9 8.2 Energy 3.7 3.9 Real Estate 3.6 2.4 Utilities 3.0 2.7 Materials 2.9 2.6 Underlying Funds 2.0 0.1 Cash/Other 2.8 1.3 Total 100.0 100.0

Currency risk (% of NAV)

The table below summarizes the Fund’s net exposure (after

hedging, if any) to currency risk as at:

CurrencyJune 30

2019December 31

2018

United States dollar 100.0 100.0Total 100.0 100.0

As at June 30, 2019, if the Canadian dollar had strengthened

or weakened by 5% in relation to the above currencies, with

all other factors kept constant, the Fund’s NAV may have

decreased or increased, respectively, by approximately 5.0%

(December 31, 2018 – 5.0%). In practice, actual results could

differ from this sensitivity analysis and the difference could

be material.

Other price risk (% impact on NAV)

The table below shows the impact of a 1% change in the

broad-based index (noted below) on the Fund’s NAV, using a

36-month historical correlation of data of the Fund’s return

and the index, with all other factors kept constant, as at:

June 30 2019

December 31 2018

S&P 500 Total Return Index (CAD) + or - 1.0 + or - 1.0

Since historical correlation may not be representative of

future correlation, actual results could differ from this

sensitivity analysis and the difference could be material.

Fair value hierarchy ($000s except % amounts) (see note 3 in the generic notes)

The following is a summary of the inputs used as of

June 30, 2019 and December 31, 2018.

June 30, 2019 Level 1 Level 2 Level 3 Total

Equities 5 351 394 – – 5 351 394Underlying funds 113 146 – – 113 146Fixed-income and debt securities – – – –Short-term investments – 194 798 – 194 798Derivatives – assets – – – –Derivatives – liabilities – – – –Total financial instruments 5 464 540 194 798 – 5 659 338% of total portfolio 96.6 3.4 – 100.0

December 31, 2018 Level 1 Level 2 Level 3 Total

Equities 4 950 622 – – 4 950 622Underlying funds 3 040 – – 3 040Fixed-income and debt securities – – – –Short-term investments – 49 488 – 49 488Derivatives – assets – – – –Derivatives – liabilities – – – –Total financial instruments 4 953 662 49 488 – 5 003 150% of total portfolio 99.0 1.0 – 100.0

For the periods ended June 30, 2019 and December 31, 2018,

there were no transfers of financial instruments between

Level 1, Level 2 and Level 3.



June 30, 2019


Management fees and administration fees (see note 8 in the generic notes)

Management fees and administration fees of each series

of the Fund are payable to RBC GAM and calculated at the

following annual percentages, before GST/HST, of the daily

NAV of each series of the Fund.

Management fees Administration fees

Series A 1.60% 0.10%Advisor Series 1.60% 0.10%Series D 0.85% 0.10%Series F 0.60% 0.10%Series O n/a* 0.05%

* Series O unitholders pay a negotiated management fee directly to RBC GAM for investment-counselling services.

Investments by related parties ($000s except unit amounts)

Royal Bank of Canada, or one of its subsidiaries, held the

following investments in the Fund as at:

June 30 2019

December 31 2018

Units held Series A 54 54 Advisor Series 166 166 Series D 161 161 Series F 165 165 Series O 179 179Value of all units 13 12

Unconsolidated structured entities (%) (see note 3 in the generic notes)

The table below summarizes the Fund’s interest in the

unsponsored funds as a percentage of NAV, and the

Fund’s ownership interest as a percentage of NAV of the

unsponsored funds (“Ownership”).

June 30 2019

December 31 2018

NAV Ownership NAV Ownership

iShares Core S&P 500 ETF 2.0 – – –iShares Russell 2000 ETF – – 0.1 –

Taxes ($000s) (see note 6 in the generic notes)

The Fund had no capital or non-capital losses as at

December 31, 2018.

Redeemable units (000s)

There is no limitation on the number of units available for

issue. Units are purchased and redeemed at the NAV per unit.


Series AOpening units 213 204Issued number of units 19 25Reinvested number of units – – Redeemed number of units (20) (25)Ending number of units 212 204

Advisor SeriesOpening units 58 44Issued number of units 6 7Reinvested number of units – – Redeemed number of units (5) (1)Ending number of units 59 50

Series D Opening units 2 112 2 022Issued number of units 94 200Reinvested number of units – – Redeemed number of units (221) (200)Ending number of units 1 985 2 022

Series F Opening units 434 217Issued number of units 105 218Reinvested number of units – – Redeemed number of units (91) (48)Ending number of units 448 387

Series O Opening units 309 859 303 211Issued number of units 4 039 6 095Reinvested number of units – – Redeemed number of units (5 626) (17 784)Ending number of units 308 272 291 522

Transaction costs ($000s except %)

Transaction costs, including brokerage commissions, in

consideration of portfolio transactions for the periods ended:

June 30 2019

June 30 2018

$ % $ %

Total transaction costs 1 235 100 705 100Related-party brokerage commissions* 75 6 – –Commission arrangements† 521 42 269 38

* See note 8 in the generic notes.† Commission arrangements are part of commission amounts paid to dealers. The Fund uses

commission arrangements (formerly known as “soft dollars”) for research and/or order execution goods and services.



June 30, 2019

Securities lending revenue ($000s except %) (see note 7 in the generic notes)

Fair value of securities on loan and collateral received as at:

June 30 2019

June 30 2018

Fair value of securities loaned 546 167 554 919Fair value of collateral received 557 091 566 018

The table below provides a reconciliation of the gross revenue

generated from the securities lending transactions of the Fund

to the securities lending revenue disclosed in the Statements of

Comprehensive Income.

June 30 2019

June 30 2018

$ % $ %

Gross revenue 377 100 341 100 RBC IS (paid) (94) (25) (84) (25) Tax withheld (20) (5) (26) (7) Fund revenue 263 70 231 68


Investments by other related investment funds (%) (see note 8 in the generic notes)

The table below summarizes, as a percentage, the NAV of the

Fund owned by other related investment funds as at:

June 30 2019

December 31 2018

Phillips, Hager & North U.S. Multi-Style All-Cap Equity Class 0.6 0.7RBC Managed Payout Solution 1.7 1.7RBC Managed Payout Solution – Enhanced 2.4 2.5RBC Managed Payout Solution – Enhanced Plus 2.8 2.8RBC Retirement 2020 Portfolio – –RBC Retirement 2025 Portfolio – –RBC Retirement 2030 Portfolio 0.1 0.1RBC Retirement 2035 Portfolio 0.1 –RBC Retirement 2040 Portfolio 0.1 –RBC Retirement 2045 Portfolio 0.1 –RBC Retirement 2050 Portfolio – –RBC Select Aggressive Growth Portfolio 3.8 3.6RBC Select Balanced Portfolio 34.9 34.1RBC Select Choices Aggressive Growth Portfolio 0.3 0.3RBC Select Choices Balanced Portfolio 0.2 0.2RBC Select Choices Conservative Portfolio 0.1 0.1RBC Select Choices Growth Portfolio 0.4 0.4RBC Select Conservative Portfolio 26.5 26.5RBC Select Growth Portfolio 11.9 11.8RBC Select Very Conservative Portfolio 11.6 12.4RBC Target 2020 Education Fund – 0.1RBC Target 2025 Education Fund 0.6 0.7RBC Target 2030 Education Fund 0.7 0.6RBC Target 2035 Education Fund 0.1 0.1Total 99.0 98.7

GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited)

June 30, 2019

(also see Fund Specific Information)

1. The Funds

The Funds (“Fund” or “Funds”) are open-ended mutual

fund trusts governed by the laws of the Province of Ontario

or British Columbia. RBC GAM is the manager and portfolio

manager of the Funds and its head office is located at

155 Wellington Street West, 22nd Floor, Toronto, Ontario.

RBC GAM is also the trustee of those Funds governed by the

laws of the Province of Ontario. These financial statements

were approved for issuance by the Board of Directors of

RBC GAM on August 8, 2019.

The Funds may issue an unlimited number of units in some

or all of Series A, Advisor Series, Advisor T5 Series, Series T5,

Series T8, Series H, Series D, Series DZ, Series F, Series FT5,

Series FT8, Series I, Series N and Series O.

Series A units have no sales charges and are available to all

investors through authorized dealers.

Advisor Series units and Advisor T5 Series units are available

to all investors through authorized dealers with an initial

sales charge or low-load sales charge option. For certain of

the Funds, Advisor Series units and Advisor T5 Series units are

available with a deferred sales charge option. Under the initial

sales charge option, investors pay a sales charge ranging from

0% to 5% of the amount invested. Under the deferred sales

charge or low-load sales charge option, sales charges may be

applicable, as described in the Simplified Prospectus.

Series T5 units and Series T8 units have no sales charges and

are available to all investors through authorized dealers.

Series H units have no sales charges, have lower fees than

Series A units and are only available to investors who invest

and maintain the required minimum balance through

authorized dealers.

Series D units and Series DZ units have no sales charges

and have lower fees than Series A units. Series D units and

Series DZ units may be available to investors who have

accounts with RBC Direct Investing Inc., Phillips, Hager &

North Investment Funds Ltd. (“PH&N IF”) or certain other

authorized dealers (primarily discount brokers).

Series F units, Series FT5 units and Series FT8 units have no

sales charges and have lower fees than Series A units. Series F

units, Series FT5 units and Series FT8 units are only available

to investors who have fee-based accounts with their dealer.

Series I units have no sales charges, have lower fees than

Series F units, Series FT5 units and Series FT8 units and

are only available to investors who invest and maintain

the required minimum balance and who have accounts

with dealers who have signed a fee-based agreement with

RBC GAM.

Series N units are only available to related mutual funds.

Series O units are only available to large private or

institutional investors or dealers. No management fees

are payable by the Funds in respect to Series O units.

Unitholders pay a negotiated fee directly to RBC GAM for

investment-counselling services.

2. Financial period

The information provided in these financial statements and

notes thereto is as at June 30, 2019 and December 31, 2018, as

applicable, and for the six-month periods ended June 30, 2019

and June 30, 2018, as applicable, except for Funds or series

established during either period, in which case the information

for the Fund, or series, is provided for the period from the start

date as described in the Notes to Financial Statements – Fund

Specific Information of the Fund.

3. Summary of significant accounting policies

These financial statements have been prepared in

compliance with International Financial Reporting Standards

(“IFRS”) and in accordance with International Accounting

Standard (“IAS”) 34 – Interim Financial Reporting, as issued

by the International Accounting Standards Board (“IASB”).

The significant accounting policies of the Funds, which are

investment entities, are as follows:

Adoption of New Accounting Standards Effective

January 1, 2018, the Funds adopted IFRS 9 Financial

Instruments. The new standard requires financial assets to

be classified as amortized cost and fair value, with changes

in fair value through profit and loss (“FVTPL”) or fair value

through other comprehensive income (“FVOCI”) based on

the entity’s business model for managing financial assets

and the contractual cash flow characteristics of the financial

assets. Assessment and decision on the business model

approach used is an accounting judgment. IFRS 9 also

introduces a new expected credit loss impairment model.

The adoption of IFRS 9 has been applied retrospectively

without the use of hindsight and did not result in a change

to the measurement of financial instruments, in either the

current or comparative period. The Funds’ financial assets


June 30, 2019


previously designated at FVTPL under IAS 39 Financial

Instruments are now mandatorily classified and measured at

FVTPL. The Funds’ financial assets and liabilities previously

classified as FVTPL under the held for trading category

continue to be classified as held for trading and measured at

FVTPL. Other financial assets and liabilities will continue to

be measured at amortized cost. There was no material impact

on the adoption of the new impairment model.

In addition, certain comparative figures in the Statements

of Comprehensive Income have been revised to meet the

disclosure requirements on initial application of IFRS 9.

Amounts previously recorded as “Net gain (loss) on foreign

currencies and other net assets,” “Other derivatives” and

“Net gain (loss) from futures contracts” are now recorded

as “Derivative income.” And certain amounts previously

recorded as “Other income (loss)” are now recorded as

“Income from investment trusts.”

Classification and Measurement of Financial Assets, Liabilities and Derivatives Each of the Funds classify

their investment portfolio based on the business model

for managing the portfolio and the contractual cash flow

characteristics. The investment portfolio of financial assets

and liabilities is managed and performance is evaluated on

a fair value basis. The contractual cash flows of the Funds’

debt securities that are solely principal and interest are

neither held for the purpose of collecting contractual cash

flows nor held both for collecting contractual cash flows

and for sale. The collection of contractual cash flows is only

incidental to achieving the Funds’ business model objectives.

Consequently, all investments are measured at FVTPL.

Derivative assets and liabilities are also measured at FVTPL.

The Funds’ obligation for net assets attributable to holders

of redeemable units represents a financial liability and is

measured at the redemption amount, which approximates

fair value as of the reporting date. All other financial assets

and liabilities are measured at amortized cost.

Offsetting Financial Assets and Liabilities In the normal

course of business, the Funds may enter into various

International Swaps and Derivatives Association master

netting agreements or other similar arrangements with

certain counterparties that allow for related amounts to

be offset in certain circumstances, such as bankruptcy or

termination of contracts. Offsetting information, where

applicable, is presented in the Notes to Financial

Statements – Fund Specific Information.

Classification of Redeemable Units The Funds have multiple

features across the different series of the Funds. Consequently,

the Funds’ outstanding redeemable units are classified as

financial liabilities in accordance with the requirements of

IAS 32 Financial Instruments: Presentation.

Unconsolidated Structured Entities The Funds may invest in

other Funds and exchange-traded funds (“ETFs”) managed

by the manager or an affiliate of the manager (“sponsored

funds”) and may invest in other funds and ETFs managed

by unaffiliated entities (“unsponsored funds”); collectively,

“underlying funds.” The underlying funds are determined to

be unconsolidated structured entities, as decision making

in the underlying fund is not governed by the voting rights

or other similar rights held by the Fund. The investments

in underlying funds are subject to the terms and conditions

of the offering documents of the respective underlying

funds and are susceptible to market price risk arising from

uncertainties about future values of those underlying funds.

The underlying funds’ objectives are generally to achieve

long-term capital appreciation and/or current income by

investing in a portfolio of securities and other funds in line

with each of their documented investment strategies. The

underlying funds apply various investment strategies to

accomplish their respective investment objectives.

The underlying funds finance their operations by issuing

redeemable units which are puttable at the unitholder’s

option, and entitle the unitholder to a proportional stake in

the respective underlying funds’ NAV.

The Funds do not consolidate their investment in underlying

funds but account for these investments at fair value. The

manager has determined that the Funds are investment

entities in accordance with IFRS 10 Consolidated Financial

Statements, since the Funds meet the following criteria:

(i) The Funds obtain capital from one or more investors for

the purpose of providing those investors with investment

management services,

(ii) The Funds commit to their investors that their business

purpose is to invest funds solely for the returns from

capital appreciation, investment income or both, and

(iii) The Funds measure and evaluate the performance of

substantially all of their investments on a fair value basis.


June 30, 2019


Therefore, the fair value of investments in the underlying

funds is included in the Schedule of Investment Portfolio

and included in “Investments at fair value” in the Funds’

Statements of Financial Position. The change in fair value

of the investment held in the underlying funds is included

in “Change in unrealized gain (loss) on investments” in the

Statements of Comprehensive Income.

Certain Funds may invest in mortgage-related or other

asset-backed securities. These securities include commercial

mortgage-backed securities, asset-backed securities,

collateralized debt obligations and other securities that

directly or indirectly represent a participation in, or are

securitized by and payable from, mortgage loans on real

property. Mortgage-related securities are created from

pools of residential or commercial mortgage loans while

asset-backed securities are created from many types of

assets, including auto loans, credit card receivables, home

equity loans and student loans. The Funds account for these

investments at fair value. The fair value of such securities, as

disclosed in the Schedule of Investment Portfolio, represents

the maximum exposure to losses at that date.

Determination of Fair Value The fair value of a financial

instrument is the amount at which the financial instrument

could be exchanged in an arm’s-length transaction between

knowledgeable and willing parties under no compulsion to

act. In determining fair value, a three-tier hierarchy based on

inputs is used to value the Funds’ financial instruments.

The hierarchy of inputs is summarized below:

Level 1 – quoted prices (unadjusted) in active markets for

identical assets or liabilities;

Level 2 – inputs other than quoted prices included in

Level 1 that are observable for the asset or liability, either

directly (i.e., as prices) or indirectly (i.e., derived from prices),

including broker quotes, vendor prices and vendor fair value

factors; and

Level 3 – inputs for the asset or liability that are not based on

observable market data (unobservable inputs).

Changes in valuation methods may result in transfers into or

out of an investment’s assigned level.

The three-tier hierarchy of investments and derivatives is

included in Notes to Financial Statements – Fund Specific

Information.

Investments and derivatives are recorded at fair value, which

is determined as follows:

Equities – Common shares and preferred shares are valued at

the closing price recorded by the security exchange on which

the security is principally traded. In circumstances where the

closing price is not within the bid-ask spread, management will

determine the points within the bid-ask spread that are most

representative of the fair value.

Fixed-Income and Debt Securities – Bonds, mortgage-backed

securities, loans and debentures are valued at the closing

price quoted by major dealers or independent pricing vendors

in such securities.

NHA-approved mortgages are valued at an amount, which produces a yield equivalent to the prevailing rate of return on mortgages of similar type and term.

Short-Term Investments – Short-term investments are valued at fair value, which is approximated at cost plus accrued interest.

Options – Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price during the specified period or on a specified date.

Listed options are valued at the closing price on the recognized exchange on which the option is traded. In circumstances where the closing price is not within the bid-ask spread, management will determine the points within the bid-ask spread that are most representative of the fair value.

Options purchased and options written (sold) are recorded as investments in the Statements of Financial Position. These investments are reported at fair value in the Statements of Financial Position, and unrealized gain or loss at the close of business on each valuation date is recorded in “Change in unrealized gain (loss) on investments” in the Statements of Comprehensive Income.

When an option is exercised and the underlying securities are acquired or delivered, the acquisition cost or sale proceeds are adjusted by the amount of the premium. When an option is closed the Fund will realize a gain or loss equal to the difference between the premium and the cost to close the position. When an option expires, gains or losses are realized equivalent to the amount of premiums received or paid, respectively. The net realized gains (losses) on written and purchased options are included in the Statements of Comprehensive Income in “Net realized gain (loss) on investments.”


June 30, 2019


Warrants – Warrants are valued using a recognized option pricing model, which includes factors such as the terms of the warrant, time value of money and volatility inputs that are significant to such valuation.

Forward Contracts – Forward contracts are valued at the gain or loss that would arise as a result of closing the position at the valuation date. The receivable/payable on forward contracts is recorded separately in the Statements of Financial Position. Any unrealized gain or loss at the close of business on each valuation date is recorded as “Change in unrealized gain (loss) on investments” and realized gain or loss on foreign exchange contracts is included in “Derivative income” in the Statements of Comprehensive Income.

Total Return Swaps – A total return swap is an agreement by which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains. Total return swap contracts are marked to market daily based upon quotations from the market makers and the change in value, if any, is recorded in “Change in unrealized gain (loss) on investments” in the Statements of Comprehensive Income. When the swap contract is terminated early, the Fund records a realized gain or loss equal to the difference between the current net present value and the executed net present value in “Derivative income” in the Statements of Comprehensive Income. Unrealized gains and losses are recorded as “Receivable on open swap contracts” or “Payable on open swap contracts” in the Statements of Financial Position, as applicable. The risks of total return swap contracts include changes in market conditions and the possible inability of the counterparty to fulfill its obligations under the agreement.

Futures Contracts – Futures contracts entered into by the

Funds are financial agreements to purchase or sell a financial

instrument at a contracted price on a specified future date.

However, the Funds do not intend to purchase or sell the

financial instrument on the settlement date; rather, they

intend to close out each futures contract before settlement

by entering into equal, but offsetting, futures contracts.

Futures contracts are valued at the gain or loss that would

arise as a result of closing the position at the valuation date.

Any gain or loss at the close of business on each valuation

date is recorded as “Derivative income” in the Statements

of Comprehensive Income. The receivable/payable on

futures contracts is recorded separately in the Statements of

Financial Position.

Credit Default Swap Contracts – Credit default swaps are

agreements between a protection buyer and protection

seller. The protection buyer pays a periodic fee in exchange

for a payment by the protection seller contingent on the

occurrence of a credit event, such as a default, bankruptcy

or restructuring, with respect to a referenced entity.

Periodic fees paid or received are recorded as “Interest for

distribution purposes” in the Statements of Comprehensive

Income. When the contract is terminated or expires, the

payments received or paid are recorded as “Derivative

income” in the Statements of Comprehensive Income.

Credit default swap contracts are valued based on quotations

from independent sources.

Underlying Funds – Underlying funds that are mutual funds are

valued at their respective NAV per unit from fund companies

on the relevant valuation dates and underlying funds that

are exchange-traded funds are valued at market close on the

relevant valuation dates.

Fair Valuation of Investments – The Funds have procedures

to determine the fair value of securities and other financial

instruments for which market prices are not readily available

or which may not be reliably priced. Procedures are in place

to determine the fair value of foreign securities traded in

countries outside of North America daily to avoid stale prices

and to take into account, among other things, any significant

events occurring after the close of a foreign market.

Management also has procedures where the Funds primarily

employ a market-based approach, which may use related

or comparable assets or liabilities, NAV per unit (for

exchange-traded funds), recent transactions, market

multiples, book values and other relevant information for

the investment to determine its fair value. The Funds may

also use an income-based valuation approach in which

the anticipated future cash flows of the investment are

discounted to calculate fair value. Discounts may also be

applied due to the nature or duration of any restrictions

on the disposition of the investments, but only if they arise

as a feature of the instrument itself. Due to the inherent

uncertainty of valuations of such investments, the fair values

may differ significantly from the values that would have been

used had an active market existed.

All security valuation techniques are periodically reviewed

by the Valuation Committee (“VC”) of the manager and are

approved by the manager. The VC provides oversight of the

Funds’ valuation policies and procedures.


June 30, 2019


Cash Cash is comprised of cash and deposits with banks and

is recorded at amortized cost. The carrying amount of cash

approximates its fair value because it is short term in nature.

Foreign Exchange The value of investments and other

assets and liabilities in foreign currencies is translated into

Canadian dollars (U.S. dollars in the case of the Phillips,

Hager & North $U.S. Money Market Fund, RBC $U.S. Money

Market Fund, RBC Premium $U.S. Money Market Fund,

RBC $U.S. Short-Term Corporate Bond Fund, RBC $U.S.

Investment Grade Corporate Bond Fund, RBC $U.S. High

Yield Bond Fund, RBC $U.S. Strategic Income Bond Fund,

BlueBay Emerging Markets Bond Fund (Canada), BlueBay

Emerging Markets Local Currency Bond Fund (Canada),

BlueBay Emerging Markets Corporate Bond Fund,

BlueBay $U.S. Global Convertible Bond Fund (Canada) and

RBC U.S. Monthly Income Fund) at the rate of exchange on

each valuation date. Gains/losses on foreign cash balances

are included in “Net gain (loss) on foreign cash balances”

in the Statements of Comprehensive Income. Purchases

and sales of investments, income and expenses are

translated at the rate of exchange prevailing on the

respective dates of such transactions. Realized foreign

exchange gains/losses on spot and forward currency

contracts are included in “Derivative income” in the

Statements of Comprehensive Income.

Functional Currency The Funds, with the exceptions below,

have their subscriptions, redemptions and performance

denominated in Canadian dollars and, consequently, the

Canadian dollar is the functional currency for the Funds.

Phillips, Hager & North $U.S. Money Market Fund,

RBC $U.S. Money Market Fund, RBC Premium $U.S. Money

Market Fund, RBC $U.S. Short-Term Corporate Bond

Fund, RBC $U.S. Investment Grade Corporate Bond Fund,

RBC $U.S. High Yield Bond Fund, RBC $U.S. Strategic Income

Bond Fund, BlueBay Emerging Markets Bond Fund (Canada),

BlueBay Emerging Markets Local Currency Bond Fund

(Canada), BlueBay Emerging Markets Corporate Bond Fund,

BlueBay $U.S. Global Convertible Bond Fund (Canada) and

RBC U.S. Monthly Income Fund have their subscriptions,

redemptions and performance denominated in U.S. dollars

and, consequently, the U.S. dollar is the functional currency

for these Funds.

Valuation of Series A different NAV is calculated for each

series of units of a Fund. The NAV of a particular series of

units is computed by calculating the value of the series’

proportionate share of the assets and liabilities of the Fund

common to all series less the liabilities of the Fund attributable

only to that series. Expenses directly attributable to a series

are charged to that series. Other expenses are allocated

proportionately to each series based upon the relative NAV of

each series. Expenses are accrued daily.

Investment Transactions Investment transactions are

accounted for as of the trade date. Transaction costs, such as

brokerage commissions, incurred by the Funds are recorded

in the Statements of Comprehensive Income for the period.

The unrealized gain and loss on investments is the difference

between fair value and average cost for the period. The basis

of determining the cost of portfolio assets, and realized

and unrealized gains and losses on investments, is average

cost which does not include amortization of premiums or

discounts on fixed-income and debt securities with the

exception of zero coupon bonds.

Income Recognition Dividend income is recognized on the

ex-dividend date and interest for distribution purposes is

coupon interest recognized on an accrual basis and/or

imputed interest on zero coupon bonds. “Income from

investment trusts” includes income from underlying funds

and other trusts. Any premiums paid or discounts received

on the purchase of zero coupon bonds are amortized. Interest

payments made by the Funds to counterparties on the

payable leg of derivative contracts are recorded as “Interest

expense” in the Statements of Comprehensive Income.

Increase (Decrease) in NAV per Unit Increase (decrease) in

NAV per unit in the Statements of Comprehensive Income

represents the increase (decrease) in net assets attributable to

holders of redeemable units by series, divided by the average

units outstanding per series during the period.

Early Redemption Fees Early redemption fees (short-term

trading fees) are paid directly to a Fund and are designed

to deter excessive trading and its associated costs. With the

exception of money market funds, a Fund may apply a fee

of 2% of the current value of units if the unitholder redeems

or switches out units within seven days of purchasing

or previously switching into a Fund. These amounts are

included in the Statements of Changes in NAV.


June 30, 2019


Foreign Currencies The following is a list of abbreviations

used in the Schedule of Investment Portfolio:

ARS – Argentinian pesoAUD – Australian dollarBRL – Brazilian realCAD – Canadian dollarCHF – Swiss francCLP – Chilean pesoCNY – Chinese renminbiCOP – Colombian pesoCZK – Czech korunaDKK – Danish kroneDOP – Dominican pesoEGP – Egyptian poundEUR – EuroGBP – Pound sterlingHKD – Hong Kong dollarHUF – Hungarian forintIDR – Indonesian rupiahILS – Israeli new shekelINR – Indian rupeeJPY – Japanese yen

KRW – South Korean wonMXN – Mexican pesoMYR – Malaysian ringgitNGN – Nigerian nairaNOK – Norwegian kroneNZD – New Zealand dollarPEN – Peruvian nuevo solPHP – Philippine pesoPLN – Polish zlotyRON – Romanian leuRUB – Russian rubleSEK – Swedish kronaSGD – Singapore dollarTHB – Thailand bahtTRY – Turkish new liraTWD – New Taiwan dollarUAH – Ukranian hryvniaUSD – United States dollarUYU – Uruguay pesoZAR – South African rand

4. Critical accounting judgments and estimates

The preparation of financial statements requires the use

of judgment in applying the Funds’ accounting policies

and making estimates and assumptions about the future.

The following discusses the most significant accounting

judgments and estimates that management has made in

preparing the financial statements.

Fair value measurement of securities not quoted in an active market

The Funds have established policies and control procedures

that are intended to ensure these estimates are well

controlled, independently reviewed and consistently applied

from period to period. The estimates of the value of the

Funds’ assets and liabilities are believed to be appropriate as

at the reporting date.

The Funds may hold financial instruments that are not quoted

in active markets. Note 3 discusses the policies used by

management for the estimates used in determining fair value.

5. Financial instrument risk and capital management

RBC GAM is responsible for managing each Fund’s

capital, which is its NAV and consists primarily of

its financial instruments.

A Fund’s investment activities expose it to a variety of

financial risks. RBC GAM seeks to minimize potential adverse

effects of these risks on a Fund’s performance by employing

professional, experienced portfolio managers, daily monitoring

of the Fund’s holdings and market events, diversifying its

investment portfolio within the constraints of its investment

objectives and, in some cases, periodically hedging certain risk

exposures through the use of derivatives. To assist in managing

risks, RBC GAM also uses internal guidelines, maintains a

governance structure that oversees each Fund’s investment

activities and monitors compliance with the Fund’s investment

strategies, internal guidelines and securities regulations.

Financial instrument risk, as applicable to a Fund, is disclosed

in its Notes to Financial Statements – Fund Specific Information.

These risks include a Fund’s direct risks and pro rata exposure to

the risks of underlying funds, as applicable.

Liquidity risk

Liquidity risk is the possibility that investments in a Fund

cannot be readily converted into cash when required. A Fund

is exposed to daily cash redemptions of redeemable units.

Liquidity risk is managed by investing the majority of a Fund’s

assets in investments that are traded in an active market and

that can be readily disposed. In accordance with securities

regulations, a Fund must maintain at least 90% of its assets in

liquid investments. In addition, a Fund aims to retain sufficient

cash and cash equivalent positions to maintain liquidity, and

has the ability to borrow up to 5% of its NAV for the purpose

of funding redemptions. All non-derivative financial liabilities,

other than redeemable units, are due within 90 days.

Credit risk

Credit risk is the risk that a loss could arise from a security

issuer or counterparty not being able to meet its financial

obligations. The carrying amount of investments and other

assets represents the maximum credit risk exposure as

disclosed in a Fund’s Statements of Financial Position. The

Funds measure credit risk and expected credit losses using

probability of default, exposure at default and loss given

default. Management considers both historical analysis and

forward-looking information in determining any expected

credit loss. All other receivables, amounts due from brokers,

cash and short-term deposits are held with counterparties

with a credit rating of AA/Aa or higher. Management

considers the probability of default to be close to zero as

the counterparties have a strong capacity to meet their

contractual obligations in the near term. As a result, no

loss allowance has been recognized based on 12-month

expected credit losses as any such impairment would be

wholly insignificant to the Funds. The fair value of fixed-

income and debt securities includes a consideration of the


June 30, 2019


creditworthiness of the debt issuer. Credit risk exposure

to over-the-counter derivative instruments is based on a

Fund’s unrealized gain on the contractual obligations with

the counterparty. Credit risk exposure is mitigated for those

Funds participating in a securities lending program (see

note 7). RBC GAM monitors each Fund’s credit exposure and

counterparty ratings daily.

Concentration risk

Concentration risk arises as a result of net financial

instrument exposures to the same category, such as

geographical region, asset type, industry sector or market

segment. Financial instruments in the same category have

similar characteristics and may be affected similarly by

changes in economic or other conditions.

Interest rate risk

Interest rate risk is the risk that the fair value of a Fund’s

interest-bearing investments will fluctuate due to changes

in market interest rates. The value of fixed-income and debt

securities, such as bonds, debentures, mortgages or other

income-producing securities, is affected by interest rates.

Generally, the value of these securities increases if interest

rates fall and decreases if interest rates rise.

Currency risk

Currency risk is the risk that the value of investments

denominated in currencies, other than the functional

currency of a Fund, will fluctuate due to changes in foreign

exchange rates. The value of investments denominated in a

currency other than the functional currency is affected by

changes in the value of the functional currency in relation

to the value of the currency in which the investment is

denominated. When the value of the functional currency falls

in relation to foreign currencies, then the value of the foreign

investments rises. When the value of the functional currency

rises, the value of the foreign investments falls.

Other price risk

Other price risk is the risk that the value of financial

instruments will fluctuate as a result of changes in market

prices (other than those arising from interest rate or currency

risk), whether caused by factors specific to an individual

investment, its issuer, or all factors affecting all instruments

traded in a market or market segment.

6. Taxes

The Funds qualify as open-ended mutual fund trusts or unit

trusts under the Income Tax Act (Canada). In general, the

Funds are subject to income tax; however, no income tax

is payable on net income and/or net realized capital gains

which are distributed to unitholders. Since the Funds do

not record income taxes, the tax benefit of capital and

non-capital losses has not been reflected in the Statements

of Financial Position as a deferred income tax asset. In

addition, for mutual fund trusts, income taxes payable on net

realized capital gains are refundable on a formula basis when

units of the Funds are redeemed.

Capital losses are available to be carried forward indefinitely

and applied against future capital gains. Non-capital losses

may be carried forward to reduce future taxable income for

up to 20 years.

7. Securities lending revenueCertain of the Funds lend portfolio securities from time to time in order to earn additional income. Income from securities lending is included in the Statements of Comprehensive Income of a Fund. Each such Fund will have entered into a securities lending program with its custodian, RBC Investor Services Trust (“RBC IS”). The aggregate market value of all securities loaned by a Fund cannot exceed 50% of the assets of a Fund. The Fund receives collateral, with an approved credit rating of at least A, of at least 102% of the value of securities on loan. The Fund is indemnified by RBC IS for any collateral credit or market loss. As such, the credit risk associated with securities lending is considered minimal.

8. Administrative and other related-party transactions

Manager and Portfolio Manager

RBC GAM is an indirect wholly owned subsidiary of

Royal Bank of Canada (“Royal Bank”). RBC GAM is the

manager and portfolio manager of the Funds. RBC GAM is

responsible for the Funds’ day-to-day operations, provides

investment advice and portfolio management services to the

Funds and appoints distributors for the Funds. RBC GAM

is paid a management fee by the Funds as compensation

for its services. The management fee is calculated and

accrued daily as a percentage of the NAV of each series

of units of the Funds. No management fees are paid by

the Funds with respect to Series O units. Unitholders of

Series O units pay a negotiated fee directly to RBC GAM for

investment-counselling services.


June 30, 2019


The Funds pay a fixed administration fee to RBC GAM. The

fixed administration fee is calculated and accrued daily as a

percentage of the NAV of each series of units of the Funds.

RBC GAM in turn pays certain operating expenses of the

Funds. These expenses include regulatory filing fees and

other day-to-day operating expenses including, but not

limited to, recordkeeping, accounting and fund valuation

costs, custody fees, audit and legal fees and the costs of

preparing and distributing annual and interim reports,

prospectuses, statements and investor communications.

Notwithstanding the fixed administration fee, the Funds

also pay certain operating expenses directly, including

the costs related to the Independent Review Committee

of the Funds, and the cost of any new government or

regulatory requirements introduced and any borrowing costs

(collectively, “other fund costs”), and taxes (including, but not

limited to, GST/HST). Effective January 1, 2020, RBC GAM,

not the Funds, will be responsible for the costs related to

the Independent Review Committee. Other fund costs will

be allocated proportionately to each series based upon the

relative NAV of each series. RBC GAM may, in some years

and in certain cases, absorb a portion of operating expenses.

The decision to absorb the operating expenses is reviewed

annually and determined at the discretion of RBC GAM,

without notice to unitholders.

Certain Funds may invest in units of other Funds managed

by RBC GAM or its affiliates (“underlying mutual funds”).

A Fund will not invest in units of an underlying mutual fund

if the Fund would be required to pay any management or

incentive fees in respect of that investment that a reasonable

person would believe duplicates a fee payable by the

underlying mutual fund for the same service. To the extent

a Fund invests in underlying funds managed by RBC GAM

or its affiliates, the fees and expenses payable by the

underlying funds are in addition to the fees and expenses

payable by the Fund. However, a Fund may only invest in

one or more underlying funds provided that no management

fees or incentive fees are payable that would duplicate a

fee payable by the underlying fund for the same service.

The Fund’s ownership interest in underlying mutual funds

is disclosed in the Notes to Financial Statements – Fund

Specific Information.

RBC GAM or its affiliates may earn fees and spreads in connection with various services provided to, or transactions with, the Funds, such as banking, brokerage, securities lending, foreign exchange and derivatives transactions.

RBC GAM or its affiliates may earn a foreign exchange spread when unitholders switch between series of funds denominated in different currencies. The Funds also maintain bank accounts and overdraft provisions with Royal Bank for which Royal Bank may earn a fee. Affiliates of RBC GAM that provide services to the Funds in the course of their normal business, all of which are wholly owned subsidiaries of Royal Bank of Canada, are discussed below.

Sub-Advisors

RBC Global Asset Management (U.S.) Inc. is the sub-advisor

for the RBC $U.S. Investment Grade Corporate Bond Fund,

RBC U.S. Mid-Cap Growth Equity Fund, RBC U.S. Mid-Cap

Growth Equity Currency Neutral Fund, RBC U.S. Mid-Cap

Value Equity Fund, RBC U.S. Small-Cap Core Equity Fund,

RBC U.S. Small-Cap Value Equity Fund and Phillips,

Hager & North U.S. Multi-Style All-Cap Equity Fund (for a

portion of the Fund). RBC Global Asset Management (UK)

Limited is the sub-advisor for the RBC Global Bond Fund

(for a portion of the Fund), RBC Global Corporate Bond

Fund (for a portion of the Fund), RBC U.S. Monthly Income

Fund (for a portion of the Fund), RBC Balanced Fund (for

the European equity portion of the Fund), RBC Global

Balanced Fund (for the European equity portion of the Fund),

RBC International Dividend Growth Fund, RBC International

Equity Fund (for the European equity portion of the Fund),

RBC European Dividend Fund, RBC European Equity

Fund, RBC European Mid-Cap Equity Fund, RBC Emerging

Markets Dividend Fund, RBC Emerging Markets Equity Fund,

RBC Emerging Markets Equity Focus Fund, RBC Emerging

Markets Small-Cap Equity Fund, RBC Global Dividend Growth

Fund, RBC Global Dividend Growth Currency Neutral Fund,

RBC Global Equity Fund, RBC Global Equity Focus Fund,

RBC Vision Global Equity Fund, RBC Vision Fossil Fuel

Free Global Equity Fund, Phillips, Hager & North Overseas

Equity Fund and Phillips, Hager & North Global Equity

Fund. RBC Investment Management (Asia) Limited is the

sub-advisor for the RBC Balanced Fund (for the Asian equity

portion of the Fund), RBC Global Balanced Fund (for the

Asian equity portion of the Fund), RBC Vision Balanced Fund

(for the Asian equity portion of the Fund), RBC International

Dividend Growth Fund (for the Asian equity portion of the

Fund), RBC International Equity Fund (for the Asian equity

portion of the Fund), RBC Asian Equity Fund, RBC Asia

Pacific Ex-Japan Equity Fund and RBC Japanese Equity Fund.

BlueBay Asset Management LLP is the sub-advisor of the

BlueBay Global Monthly Income Bond Fund, BlueBay Global

Sovereign Bond Fund (Canada), BlueBay Global Investment


June 30, 2019


Grade Corporate Bond Fund (Canada), BlueBay European

High Yield Bond Fund (Canada), BlueBay Emerging Markets

Bond Fund (Canada), BlueBay Emerging Markets Local

Currency Bond Fund (Canada), BlueBay Emerging Markets

Corporate Bond Fund, BlueBay Global Convertible Bond

Fund (Canada) and BlueBay $U.S. Global Convertible Bond

Fund (Canada).

The sub-advisors earn a fee which is calculated and accrued

daily as a percentage of the NAV of each series of units of the

Funds. The sub-advisors are paid by the manager from the

management fee paid by the Funds.

Trustee

RBC GAM is the trustee for the Funds governed by the laws of the Province of Ontario. RBC IS is the trustee for the Funds governed by the laws of the Province of British Columbia. The trustee holds title to the Funds’ property on behalf of the unitholders. The trustee earns a fee, which is paid by the manager from the fixed administration fee paid by the Funds.

Distributors

RBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc., RBC Dominion Securities Inc. and PH&N IF are principal distributors of, or may distribute certain series of units of, the Funds. Dealers receive an ongoing commission based on the total value of their clients’ Series A, Advisor Series, Advisor T5 Series, Series T5, Series T8, Series H and Series D units.

Custodian

RBC IS is the custodian and holds the assets of the Funds.

RBC IS earns a fee as the custodian, which is paid by the

manager from the fixed administration fee paid by the Funds.

Registrars

RBC GAM, RBC IS or Royal Bank (or a combination thereof)

are the registrars of the Funds and keep records of who owns

the units of the Funds. The registrars also process orders and

issue account statements. The registrars earn a fee, which is

paid by the manager from the fixed administration fee paid

by the Funds.

Brokers and Dealers

The Funds have established or may establish standard

brokerage agreements and dealing agreements at

market rates with related parties such as RBC Dominion

Securities Inc., RBC Capital Markets, LLC, RBC Europe

Limited, NBC Securities Inc. and Royal Bank of Canada.

Securities Lending Agent

To the extent a Fund may engage in securities lending

transactions, RBC IS may act as the Fund’s securities lending

agent. Any revenue earned on such securities lending is split

between the Fund and the securities lending agent.

Other Related-Party Transactions

Pursuant to applicable securities legislation, the Funds

relied on the standing instructions from the Independent

Review Committee with respect to one or more of the

following transactions:

Related-Party Trading Activities(a) trades in securities of Royal Bank;

(b) investments in the securities of issuers for which

a related-party dealer acted as an underwriter during

the distribution of such securities and the 60-day period

following the conclusion of such distribution of the

underwritten securities to the public;

(c) purchases of equity and debt securities from or sales of

equity or debt securities to a related-party dealer, where it

acted as principal; and

Inter-Fund Trading(d) purchases or sales of securities of an issuer from or to

another investment fund or managed account managed

by RBC GAM.

The applicable standing instructions require that Related-Party

Trading Activities and Inter-Fund Trading be conducted in

accordance with RBC GAM policy and that RBC GAM advise

the Independent Review Committee of a material breach

of any standing instruction. RBC GAM policy requires that

an investment decision in respect of Related-Party Trading

Activities (i) is made free from any influence of Royal Bank

or its associates or affiliates and without taking into account

any consideration relevant to Royal Bank or its affiliates

or associates, (ii) represents the business judgment of the

portfolio manager, uninfluenced by considerations other

than the best interests of the Funds, (iii) is in compliance with

RBC GAM policies and procedures, and (iv) achieves a fair and

reasonable result for the Funds. RBC GAM policy requires that

an investment decision in respect of Inter-Fund Trading is in

the best interests of each Fund.

Documents

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