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Decem
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3240 (03-2017)
2016 Annual Management
Report of Fund Performance
RBC FUNDS AND RBC PRIVATE POOLS
1
RBC FUNDS
MONEY MARKET FUNDS
RBC Canadian T-Bill Fund 3
RBC Canadian Money Market Fund 9
RBC Premium Money Market Fund 16
RBC $U.S. Money Market Fund 22
RBC Premium $U.S. Money Market Fund 28
FIXED-INCOME FUNDS
RBC Canadian Short-Term Income Fund 34
RBC Monthly Income Bond Fund 41
RBC Bond Fund 48
RBC Advisor Canadian Bond Fund 55
RBC Canadian Government Bond Index Fund 62
RBC Global Bond Fund 68
RBC $U.S. Investment Grade Corporate Bond Fund 76
RBC Global Corporate Bond Fund 83
RBC High Yield Bond Fund 91
RBC $U.S. High Yield Bond Fund 98
RBC Global High Yield Bond Fund 105
RBC Strategic Income Bond Fund formerly, RBC Monthly Income High Yield Bond Fund 113
RBC Emerging Markets Foreign Exchange Fund 120
RBC Emerging Markets Bond Fund 127
RBC Emerging Markets Bond Fund (CAD Hedged) 135
BlueBay Global Monthly Income Bond Fund 141
BlueBay Global Sovereign Bond Fund (Canada) 150
BlueBay Global Investment Grade Corporate
Bond Fund (Canada) 155
BlueBay European High Yield Bond Fund (Canada) 161
BlueBay Emerging Markets Corporate Bond Fund 167
BlueBay Global Convertible Bond Fund (Canada) 175
BlueBay $U.S. Global Convertible Bond Fund (Canada) 185
MANAGED PAYOUT SOLUTIONS
RBC Managed Payout Solution 193
RBC Managed Payout Solution – Enhanced 200
RBC Managed Payout Solution – Enhanced Plus 207
BALANCED FUNDS AND PORTFOLIO SOLUTIONS
RBC Monthly Income Fund 214
RBC U.S. Monthly Income Fund 221
RBC Balanced Fund 228
RBC Global Balanced Fund 237
RBC Jantzi Balanced Fund 246
RBC Conservative Growth & Income Fund 253
RBC Balanced Growth & Income Fund 261
BALANCED FUNDS AND PORTFOLIO SOLUTIONS (cont.)
RBC Global Growth & Income Fund 270
RBC Retirement Income Solution 276
RBC Retirement 2020 Portfolio 282
RBC Retirement 2025 Portfolio 288
RBC Retirement 2030 Portfolio 294
RBC Retirement 2035 Portfolio 300
RBC Retirement 2040 Portfolio 306
RBC Retirement 2045 Portfolio 312
RBC Retirement 2050 Portfolio 318
RBC Select Very Conservative Portfolio 324
RBC Select Conservative Portfolio 332
RBC Select Balanced Portfolio 340
RBC Select Growth Portfolio 348
RBC Select Aggressive Growth Portfolio 356
RBC Select Choices Conservative Portfolio 364
RBC Select Choices Balanced Portfolio 371
RBC Select Choices Growth Portfolio 378
RBC Select Choices Aggressive Growth Portfolio 385
RBC Target 2020 Education Fund 392
RBC Target 2025 Education Fund 399
RBC Target 2030 Education Fund 406
CANADIAN EQUITY FUNDS
RBC Canadian Dividend Fund 413
RBC Canadian Equity Fund 423
RBC QUBE Canadian Equity Fund 431
RBC QUBE Low Volatility Canadian Equity Fund 436
RBC Trend Canadian Equity Fund 444
RBC Jantzi Canadian Equity Fund 449
RBC Canadian Index Fund 456
RBC O’Shaughnessy Canadian Equity Fund 462
RBC O’Shaughnessy All-Canadian Equity Fund 469
RBC Canadian Equity Income Fund 476
RBC Canadian Small & Mid-Cap Resources Fund 483
NORTH AMERICAN EQUITY FUNDS
RBC North American Value Fund 490
RBC North American Growth Fund 499
U.S. EQUITY FUNDS
RBC U.S. Dividend Fund 506
RBC U.S. Dividend Currency Neutral Fund 515
RBC U.S. Equity Fund 521
RBC U.S. Equity Currency Neutral Fund 528
RBC QUBE U.S. Equity Fund 535
RBC QUBE Low Volatility U.S. Equity Fund 540
TABLE OF CONTENTS
2
TABLE OF CONTENTS
U.S. EQUITY FUNDS (cont.)
RBC QUBE Low Volatility U.S. Equity Currency Neutral Fund 548
RBC U.S. Equity Value Fund 553
RBC U.S. Index Fund 560
RBC U.S. Index Currency Neutral Fund 566
RBC O’Shaughnessy U.S. Value Fund 572
RBC U.S. Mid-Cap Growth Equity Fund formerly, RBC U.S. Mid-Cap Equity Fund 581
RBC U.S. Mid-Cap Growth Equity Currency Neutral Fund formerly, RBC U.S. Mid-Cap Equity Currency Neutral Fund 588
RBC U.S. Mid-Cap Value Equity Fund 595
RBC U.S. Small-Cap Core Equity Fund 602
RBC U.S. Small-Cap Value Equity Fund 609
RBC O’Shaughnessy U.S. Growth Fund 616
RBC O’Shaughnessy U.S. Growth Fund II 623
RBC Life Science and Technology Fund 630
INTERNATIONAL EQUITY FUNDS
RBC International Dividend Growth Fund 637
RBC International Equity Fund 644
RBC International Equity Currency Neutral Fund 651
RBC International Index Currency Neutral Fund 658
RBC O’Shaughnessy International Equity Fund 664
RBC European Dividend Fund 672
RBC European Equity Fund 679
RBC European Mid-Cap Equity Fund 686
RBC Asian Equity Fund 692
RBC Asia Pacific ex-Japan Equity Fund 699
RBC Japanese Equity Fund 706
RBC Emerging Markets Multi-Strategy Equity Fund 713
RBC Emerging Markets Dividend Fund 719
RBC Emerging Markets Equity Fund 726
RBC Emerging Markets Small-Cap Equity Fund 733
GLOBAL EQUITY FUNDS
RBC Global Dividend Growth Fund 740
RBC Global Dividend Growth Currency Neutral Fund 748
RBC Global Equity Fund 754
RBC Global Equity Focus Fund 761
RBC QUBE Global Equity Fund 768
RBC QUBE Low Volatility Global Equity Fund 774
RBC Jantzi Global Equity Fund 782
RBC O’Shaughnessy Global Equity Fund 789
RBC QUBE All Country World Equity Fund 796
RBC QUBE Low Volatility All Country World Equity Fund 801
GLOBAL EQUITY FUNDS (cont.)
RBC Global Energy Fund 806
RBC Global Precious Metals Fund 813
RBC Global Resources Fund 820
RBC Global Technology Fund 828
RBC PRIVATE POOLS
FIXED INCOME
RBC Private Short-Term Income Pool 835
RBC Private Canadian Corporate Bond Pool 841
BALANCED
RBC Private Income Pool 847
CANADIAN EQUITY
RBC Private Canadian Dividend Pool 854
RBC Private Canadian Growth and Income Equity Pool 861
RBC Private Canadian Equity Pool 868
RBC Private Canadian Growth Equity Pool 874
RBC Private Canadian Mid-Cap Equity Pool 880
U.S. EQUITY
RBC Private U.S. Large-Cap Value Equity Pool 886
RBC Private U.S. Large-Cap Value Equity
Currency Neutral Pool 893
RBC Private U.S. Growth Equity Pool 899
RBC Private U.S. Large-Cap Core Equity Pool 906
RBC Private U.S. Large-Cap Core Equity Currency Neutral Pool 912
RBC Private U.S. Small-Cap Equity Pool 918
INTERNATIONAL AND GLOBAL EQUITY
RBC Private EAFE Equity Pool 924
RBC Private Overseas Equity Pool 931
RBC Private World Equity Pool 938
CONTACT US 944
3
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
This annual management report of fund performance (“MRFP”) contains financial highlights but does not contain the complete annual financial statements of the Fund. You can get a copy of the financial statements at your request, and at no cost, by calling 1-800-463-FUND (3863), by writing to us at RBC Global Asset Management Inc., P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9, or by visiting our website at www.rbcgam.com/reports or SEDAR at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.
MONEY MARKET FUND
RBC CANADIAN T-BILL FUND
December 31, 2016
Portfolio Manager RBC Global Asset Management Inc. (“RBC GAM”)
The Board of Directors of RBC Global Asset Management Inc. approved this annual management report of fund performance on March 8, 2017.
A Note on Forward-looking Statements
This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events.
The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.
4
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
Investment Objective and StrategiesThe Fund seeks to provide current income and liquidity consistent with short-term money-market interest rates while preserving the value of the investment.
The Fund is invested primarily in short-term government debt securities with a maximum term of 365 days. Investments include Government of Canada Treasury bills, notes guaranteed by the federal government, provincial Treasury bills, floating-rate notes and short-term bank deposits.
RiskThere were no significant changes to the investment objective and strategies that affected the Fund’s overall level of risk during the reporting period. The risks of investing in the Fund and the suitability of the Fund for investors remain as discussed in the Simplified Prospectus.
Results of OperationsThe Fund’s net asset value fell to $362 million as of December 31, 2016, from $398 million at the end of 2015. The decrease was due to net redemptions.
As of December 31, 2016, the current yields were 0.2% for Series A units and 0.2% for Series D units.
Over the past year, the Fund’s Series A units returned 0.21%, compared with the 0.51% rise in the FTSE TMX Canada 91-Day T-Bill Index. The Fund’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses. In response to an extremely low interest rate environment and to support the yield to unitholders, the management fees of some series of the Fund have been temporarily reduced by RBC GAM. The decision to temporarily reduce management fees is determined at the discretion of RBC GAM.
Money-market rates and commodity prices plunged around the world in early 2016 due to concern that global economic growth might be slower than many investors had anticipated. With energy prices under pressure, Canadian yields declined. Central banks in Europe and Japan responded with renewed actions designed to reignite growth. The Bank of Canada (the “BOC”), however, kept interest rates unchanged during the year, relying on promises of fiscal stimulus to stoke growth.
The U.S. Federal Reserve (the “Fed”) retreated from its earlier outlook of multiple rate hikes in 2016, factoring global financial conditions into its policy calculations. Financial markets calmed as energy prices recovered, but experienced renewed volatility after the U.K. voted in June to withdraw from the EU and in November when Donald Trump’s election victory led to expectations of increased growth, resurgent inflation and substantially higher deficits. The Fed finally hiked rates at year-end, the first hike in exactly a year.
The portfolio manager maintained a longer average term to maturity for the Fund as the BOC signalled its intention to keep its benchmark rates unchanged, with a bias towards easing again if merited. With federal-government financial instruments consistently yielding less than provincial paper, the portfolio manager relied on provincial securities and money-market bonds to enhance yield with little extra risk. The Fund’s holdings of federal securities were limited to treasury bills and government-guaranteed bonds, but only when valuations occasionally supported such investments. Provincial securities made up the bulk of the Fund’s assets.
Recent DevelopmentsRecent interest-rate increases by the Fed run counter to what is happening in most developed economies, whose central banks are struggling to combat weak economic growth and unusually low inflation. The portfolio manager’s expectation is that the Fed will continue to gradually raise its benchmark federal funds rate, as the U.S. economy is forecast to outpace the developed world.
Investors expect President Trump to take a more opaque approach to policy than has been the case in past administrations, leaving the market guessing as to how the economy will unfold. Economic projections for Canada were lowered several times in 2016 due to weak business investment and exports, and there is the potential for the Trump administration to pursue policies that crimp Canadian exports. In this environment, the policy bias in Canada leans towards easier monetary policy as opposed to tightening. Consequently, the portfolio manager expects Canadian government money-market yields to stay within a tight range.
Effective December 1, 2016, Mr. Lloyd R. McGinnis retired and Ms. Élaine Cousineau was appointed as Chair of the Independent Review Committee (the “IRC”). Mr. Charles F. Macfarlane was appointed as Vice Chair of the IRC. Effective January 1, 2017, Ms. Suromitra Sanatani and Ms. Catherine Kloepfer were appointed as members of the IRC.
Effective July 1, 2016, Deloitte LLP resigned and PricewaterhouseCoopers LLP was appointed as auditors of the Fund.
RBC CANADIAN T-BILL FUND
5
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC CANADIAN T-BILL FUND
Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the Fund. RBC GAM is responsible for the Fund’s day-to-day operations, holds title to the Fund’s property on behalf of its unitholders, provides investment advice and portfolio management services to the Fund and appoints distributors for the Fund. RBC GAM is paid a management fee by the Fund as compensation for its services. The Fund pays a fixed administration fee to RBC GAM, which, in turn, pays certain operating expenses of the Fund.
Affiliates of RBC GAM that provide services to the Fund in the course of their normal businesses are discussed below.
DistributorsRBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc., RBC Dominion Securities Inc. and Phillips, Hager & North Investment Funds Ltd. are principal distributors of, or distribute certain series of the units of, the Fund. Dealers receive an ongoing commission based on the total value of their clients’ Series A and Series D units.
CustodianRBC Investor Services Trust (“RBC IS”) is the custodian and holds the assets of the Fund.
RegistrarsRoyal Bank, RBC IS and RBC GAM are the registrars of the Fund and keep records of who owns the units of the Fund.
Other Related-Party TransactionsPursuant to applicable securities legislation, the Fund 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 Fund, (iii) is in compliance with RBC GAM policies and procedures, and (iv) achieves a fair and reasonable result for the Fund. RBC GAM policy requires that an investment decision in respect of Inter-Fund Trading is in the best interests of each Fund.
6
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC CANADIAN T-BILL FUND
FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years or for the periods since inception. This information is derived from the Fund’s audited annual financial statements. For financial years beginning on or after January 1, 2014, financial highlight information is derived from financial statements prepared in compliance with International Financial Reporting Standards (“IFRS”). For financial years prior to January 1, 2014, financial highlight information is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). “Net Assets,” for the periods prior to 2014, are calculated in accordance with GAAP, and “Net Asset Value” is derived from the valuation method disclosed in the RBC Funds Annual Information Form and is used for transactional purposes (see Ratios and Supplemental Data). All other calculations for the purposes of this MRFP are made using Net Asset Value. There is no significant difference between “Net Assets” and “Net Asset Value” under IFRS.
Change in Net Assets Per Unit ($)
Annual Distributions2 Increase (Decrease) from Operations1 From Total Realized Unrealized Income From Net Assets For the Year/ Net Assets Revenue Total Gains Gains (Excluding From Capital Return End of Period Ended Beginning of Year/Period (Loss) Expenses (Losses) (Losses) Total Dividends) Dividends Gains of Capital Total Year/Period
Series ADec. 31, 2016 10.00 0.06 (0.04) – – 0.02 (0.02) – – – (0.02) 10.00 Dec. 31, 2015 10.00 0.08 (0.05) – – 0.03 (0.03) – – – (0.03) 10.00 Dec. 31, 2014 10.00 0.10 (0.05) – – 0.05 (0.05) – – – (0.05) 10.00 Dec. 31, 2013 10.00 0.11 (0.05) – – 0.06 (0.05) – – – (0.05) 10.00 Dec. 31, 2012 10.00 0.07 (0.05) – – 0.02 (0.06) – – – (0.06) 10.00
Series DDec. 31, 2016 10.00 0.06 (0.04) – – 0.02 (0.02) – – – (0.02) 10.00Dec. 31, 2015 10.00 0.08 (0.05) – – 0.03 (0.03) – – – (0.03) 10.00Dec. 31, 2014 10.00 0.10 (0.05) – – 0.05 (0.05) – – – (0.05) 10.00Dec. 31, 2013 10.00 0.11 (0.06) – – 0.05 (0.05) – – – (0.05) 10.00 Dec. 31, 2012 10.00 0.07 (0.05) – – 0.02 (0.06) – – – (0.06) 10.00
1 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.
2 Distributions are reinvested in additional units of the Fund or paid in cash.
7
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC CANADIAN T-BILL FUND
FINANCIAL HIGHLIGHTS (cont.)
Ratios and Supplemental Data
Net Asset Value Net Asset Value Number of Units Management MER Before Portfolio TradingAs at Per Unit ($) ($000s) Outstanding (000s) Expense Ratio (%)1 Absorption (%)1 Turnover Rate (%)2 Expense Ratio (%)3
Series ADec. 31, 2016 10.00 306 017 30 601 0.44 0.44 n/a – Dec. 31, 2015 10.00 342 970 34 297 0.52 0.52 n/a – Dec. 31, 2014 10.00 395 252 39 525 0.55 0.55 n/a – Dec. 31, 2013 10.00 475 213 47 521 0.55 0.55 n/a –Dec. 31, 2012 10.00 575 024 57 502 0.52 0.52 n/a –
Series DDec. 31, 2016 10.00 55 714 5 571 0.44 0.44 n/a –Dec. 31, 2015 10.00 55 230 5 523 0.52 0.52 n/a –Dec. 31, 2014 10.00 58 871 5 887 0.55 0.55 n/a –Dec. 31, 2013 10.00 68 099 6 810 0.55 0.55 n/a –Dec. 31, 2012 10.00 75 553 7 555 0.52 0.52 n/a –
1 The management expense ratio (“MER”) is based on expenses for the stated period, excluding commissions and other portfolio transaction costs, and is expressed as an annualized percentage of the daily average net asset value during the period. RBC GAM may, at its discretion and without notice to unitholders, waive or absorb certain operating expenses. MER includes the waiver or absorption by RBC GAM of certain operating expenses, while the MER before absorption shows the MER prior to operating expenses being waived or absorbed by RBC GAM.
2 The Fund’s portfolio turnover rate gives an indication of the level of activity employed by the portfolio manager. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The portfolio turnover rate is not applicable to money market funds.
3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The trading expense ratio is not applicable to fixed-income transactions.
Management Fees RBC GAM is the manager, trustee and portfolio manager of the Fund. Management fees of each series of the Fund are calculated at the annual percentages, before GST/HST, of the daily net asset value of each series of the Fund. The breakdown of the services received in consideration of the management fees for each series, as a percentage of the management fees, is as follows:
Breakdown of Services
Management Fees Distribution Other*
Series A up to 0.75% 33% 67% Series D up to 0.60% 17% 83%
* Includes all costs related to management, trustee, investment advisory services, general administration and profit.
8
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
SUMMARY OF INVESTMENT PORTFOLIO(after consideration of derivative products, if any)As at December 31, 2016
Investment Mix % of Net Asset Value
Provincial Obligations 99.0 Term Deposits 1.0
Top 25 Holdings % of Net Asset Value
Province of Quebec 0.600% Mar 3 2017 8.8Province of Saskatchewan 0.604% Jan 16 2017 6.9Province of Manitoba 0.599% Jan 25 2017 6.9Province of Ontario 0.651% May 24 2017 6.9Province of British Columbia 0.650% Jun 19 2017 5.5Province of Ontario 0.737% Mar 8 2017 4.5Province of Newfoundland and Labrador 0.600% Jan 26 2017 4.1Province of Quebec 0.641% Jan 13 2017 4.1Province of Saskatchewan 0.579% Jan 18 2017 4.1Province of Alberta 0.730% Apr 5 2017 3.8Province of Nova Scotia 0.642% Mar 20 2017 3.6Province of Alberta 0.701% Jun 15 2017 3.4Province of Alberta 0.592% Feb 1 2017 3.3Province of Ontario 0.601% Feb 1 2017 3.3Province of New Brunswick 0.599% Jan 24 2017 3.2Province of Manitoba 0.702% Jun 1 2017 2.8Province of Quebec 0.600% Jan 27 2017 2.8Province of Ontario 0.660% Sep 13 2017 2.8Province of Prince Edward Island 0.579% Jan 16 2017 2.5Province of Ontario 0.628% Mar 22 2017 2.5Province of Quebec 0.650% Mar 24 2017 2.0Financement-Québec 0.803% Jan 25 2017 1.9Province of Ontario 0.867% Mar 22 2017 1.9Province of Manitoba 1.044% Jan 3 2017 1.9Province of Quebec 0.629% Mar 17 2017 1.9Top 25 Holdings 95.4
The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund and a quarterly update is available at www.rbcgam.com/funds.
PAST PERFORMANCEThe performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional units of the Fund and would be lower if distributions were not reinvested. The performance information does not take into account sales, redemption, distribution, optional charges or income taxes payable that would have reduced returns or performance. Past performance does not necessarily indicate how the Fund may perform in the future. A fund with more than 10 years of performance history is only permitted to disclose the past 10 years.
Year-by-Year Returns (%) The bar chart indicates the Fund’s performance for each of the years shown, and illustrates how the Fund’s performance has changed from year to year. The bar chart shows, in percentage terms, how much an investment made on the first day of each financial year would have grown or decreased by the end of the financial year.
Series D units have been available for sale to unitholders since July 3, 2007.
Inception dates are not provided for series that have been in existence for more than 10 years.
RBC CANADIAN T-BILL FUND
9
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MONEY MARKET FUND
RBC CANADIAN MONEY MARKET FUND
December 31, 2016
Portfolio Manager RBC Global Asset Management Inc. (“RBC GAM”)
This annual management report of fund performance (“MRFP”) contains financial highlights but does not contain the complete annual financial statements of the Fund. You can get a copy of the financial statements at your request, and at no cost, by calling 1-800-463-FUND (3863), by writing to us at RBC Global Asset Management Inc., P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9, or by visiting our website at www.rbcgam.com/reports or SEDAR at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.
The Board of Directors of RBC Global Asset Management Inc. approved this annual management report of fund performance on March 8, 2017.
A Note on Forward-looking Statements
This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events.
The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.
10
2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
Investment Objective and StrategiesThe Fund seeks to provide current income and liquidity consistent with short-term money-market interest rates while preserving the value of the investment.
The Fund is invested primarily in high-quality short-term government- and corporate-debt securities with a maximum term of 365 days. The Fund’s corporate-debt holdings are deemed by major debt-rating agencies to be suitable for conservative investors. The Fund also includes short-term debt issued by Canadian chartered banks and promissory notes issued or guaranteed by Canadian governments or their agencies.
RiskThere were no significant changes to the investment objective and strategies that affected the Fund’s overall level of risk during the reporting period. The risks of investing in the Fund and the suitability of the Fund for investors remain as discussed in the Simplified Prospectus.
Results of OperationsThe Fund’s net asset value fell to $1.6 billion as of December 31, 2016, from $1.7 billion at the end of 2015. The decrease was due to net redemptions.
As of December 31, 2016, the current yields were 0.4% for Series A units, 0.4% for Advisor Series units, 0.4% for Series D units, 0.4% for Series F units and 0.9% for Series O units.
Over the past year, the Fund’s Series A units returned 0.32%, compared with the 0.51% rise in the FTSE TMX Canada 91-Day T-Bill Index. The Fund’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses. In response to an extremely low interest rate environment and to support the yield to unitholders, the management fees of some series of the Fund have been temporarily reduced by RBC GAM. The decision to temporarily reduce management fees is determined at the discretion of RBC GAM.
Money-market rates and commodity prices plunged around the world in early 2016 due to concern that global economic growth might be slower than many investors had anticipated. With energy prices under pressure, Canadian yields declined. Central banks in Europe and Japan responded with renewed actions designed to reignite growth. The Bank of Canada (the “BOC”), however, kept interest rates unchanged during the year, relying on promises of fiscal stimulus to stoke growth.
The U.S. Federal Reserve (the “Fed”) retreated from its earlier outlook of multiple rate hikes in 2016, factoring global financial conditions into its policy calculations. Financial markets calmed as energy prices recovered, but experienced renewed volatility after the U.K. voted in June to withdraw from the EU and in November when Donald Trump’s election victory led to expectations of increased growth, resurgent inflation and substantially higher deficits. The Fed finally hiked rates at year-end, the first hike in exactly a year.
The portfolio manager maintained a longer average term to maturity for the Fund as the BOC signalled its intention to keep its benchmark interest rate unchanged, with a bias towards easing again if merited. The majority of the Fund remained in asset-backed commercial paper, as it provided extra yield with little extra risk. However, the commercial-paper market struggled as ratings downgrades and new regulations resulted in a reduction of permitted issuers. Floating-rate notes, which provided significantly higher yields, were held at levels close to mandatory maximums, while a 5% position in provincial paper satisfied minimum regulatory liquidity rules.
Recent DevelopmentsRecent interest-rate increases by the Fed run counter to what is happening in most developed economies, whose central banks are struggling to combat weak economic growth and unusually low inflation. The portfolio manager’s expectation is that the Fed will continue to gradually raise its benchmark fed funds rate, as the U.S. economy is forecast to outpace the developed world.
Investors expect President Trump to take a more opaque approach to policy than has been the case in past administrations, leaving the market guessing as to how the economy will unfold. Economic projections for Canada were lowered several times in 2016, due to weak business investment and exports, and there is the potential for the Trump administration to pursue policies that crimp Canadian exports. In this environment, the policy bias in Canada leans towards easier monetary policy as opposed to tightening. Consequently, the portfolio manager expects Canadian government money-market yields to stay within a tight range.
Effective December 1, 2016, Mr. Lloyd R. McGinnis retired and Ms. Élaine Cousineau was appointed as Chair of the Independent Review Committee (the “IRC”). Mr. Charles F. Macfarlane was appointed as Vice Chair of the IRC. Effective January 1, 2017, Ms. Suromitra Sanatani and Ms. Catherine Kloepfer were appointed as members of the IRC.
Effective July 1, 2016, Deloitte LLP resigned and PricewaterhouseCoopers LLP was appointed as auditors of the Fund.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC CANADIAN MONEY MARKET FUND
Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the Fund. RBC GAM is responsible for the Fund’s day-to-day operations, holds title to the Fund’s property on behalf of its unitholders, provides investment advice and portfolio management services to the Fund and appoints distributors for the Fund. RBC GAM is paid a management fee by the Fund as compensation for its services. The Fund pays a fixed administration fee to RBC GAM, which, in turn, pays certain operating expenses of the Fund.
Affiliates of RBC GAM that provide services to the Fund in the course of their normal businesses are discussed below.
DistributorsRBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc., RBC Dominion Securities Inc. and Phillips, Hager & North Investment Funds Ltd. are principal distributors of, or distribute certain series of the units of, the Fund. Dealers receive an ongoing commission based on the total value of their clients’ Series A, Advisor Series and Series D units.
CustodianRBC Investor Services Trust (“RBC IS”) is the custodian and holds the assets of the Fund.
RegistrarsRoyal Bank, RBC IS and RBC GAM are the registrars of the Fund and keep records of who owns the units of the Fund.
Other Related-Party TransactionsPursuant to applicable securities legislation, the Fund 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 Fund, (iii) is in compliance with RBC GAM policies and procedures, and (iv) achieves a fair and reasonable result for the Fund. RBC GAM policy requires that an investment decision in respect of Inter-Fund Trading is in the best interests of each Fund.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years or for the periods since inception. This information is derived from the Fund’s audited annual financial statements. For financial years beginning on or after January 1, 2014, financial highlight information is derived from financial statements prepared in compliance with International Financial Reporting Standards (“IFRS”). For financial years prior to January 1, 2014, financial highlight information is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). “Net Assets,” for the periods prior to 2014, are calculated in accordance with GAAP, and “Net Asset Value” is derived from the valuation method disclosed in the RBC Funds Annual Information Form and is used for transactional purposes (see Ratios and Supplemental Data). All other calculations for the purposes of this MRFP are made using Net Asset Value. There is no significant difference between “Net Assets” and “Net Asset Value” under IFRS.
Change in Net Assets Per Unit ($)
Annual Distributions2 Increase (Decrease) from Operations1 From Total Realized Unrealized Income From Net Assets For the Year/ Net Assets Revenue Total Gains Gains (Excluding From Capital Return End of Period Ended Beginning of Year/Period (Loss) Expenses (Losses) (Losses) Total Dividends) Dividends Gains of Capital Total Year/Period
Series ADec. 31, 2016 10.00 0.09 (0.06) – – 0.03 (0.03) – – – (0.03) 10.00 Dec. 31, 2015 10.00 0.10 (0.06) – – 0.04 (0.04) – – – (0.04) 10.00 Dec. 31, 2014 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00 Dec. 31, 2013 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00 Dec. 31, 2012 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00
Advisor SeriesDec. 31, 2016 10.00 0.09 (0.06) – – 0.03 (0.03) – – – (0.03) 10.00Dec. 31, 2015 10.00 0.10 (0.06) – – 0.04 (0.04) – – – (0.04) 10.00Dec. 31, 2014 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00Dec. 31, 2013 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00 Dec. 31, 2012 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00
Series DDec. 31, 2016 10.00 0.09 (0.06) – – 0.03 (0.03) – – – (0.03) 10.00Dec. 31, 2015 10.00 0.10 (0.06) – – 0.04 (0.04) – – – (0.04) 10.00Dec. 31, 2014 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00Dec. 31, 2013 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00 Dec. 31, 2012 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00
Series FDec. 31, 2016 10.00 0.10 (0.06) – – 0.04 (0.04) – – – (0.04) 10.00Dec. 31, 2015 10.00 0.10 (0.06) – – 0.04 (0.04) – – – (0.04) 10.00Dec. 31, 2014 10.00 0.12 (0.06) – – 0.06 (0.06) – – – (0.06) 10.00Dec. 31, 2013 10.00 0.12 (0.06) – – 0.06 (0.07) – – – (0.07) 10.00 Dec. 31, 2012 10.00 0.12 (0.05) – – 0.07 (0.07) – – – (0.07) 10.00
Series ODec. 31, 2016 10.00 0.09 – – – 0.09 (0.09) – – – (0.09) 10.00Dec. 31, 2015 10.00 0.10 – – – 0.10 (0.10) – – – (0.10) 10.00Dec. 31, 2014 10.00 0.12 – – – 0.12 (0.12) – – – (0.12) 10.00Dec. 31, 2013 10.00 0.12 – – – 0.12 (0.12) – – – (0.12) 10.00 Dec. 31, 2012 10.00 0.12 – – – 0.12 (0.12) – – – (0.12) 10.00
1 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.
2 Distributions are reinvested in additional units of the Fund or paid in cash.
RBC CANADIAN MONEY MARKET FUND
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
FINANCIAL HIGHLIGHTS (cont.)
Ratios and Supplemental Data
Net Asset Value Net Asset Value Number of Units Management MER Before Portfolio TradingAs at Per Unit ($) ($000s) Outstanding (000s) Expense Ratio (%)1 Absorption (%)1 Turnover Rate (%)2 Expense Ratio (%)3
Series ADec. 31, 2016 10.00 1 224 869 122 485 0.60 0.60 n/a – Dec. 31, 2015 10.00 1 352 347 135 235 0.61 0.61 n/a – Dec. 31, 2014 10.00 1 236 246 123 625 0.61 0.61 n/a – Dec. 31, 2013 10.00 1 477 907 147 791 0.61 0.61 n/a –Dec. 31, 2012 10.00 1 743 639 174 364 0.58 0.58 n/a –
Advisor SeriesDec. 31, 2016 10.00 14 759 1 476 0.61 0.61 n/a –Dec. 31, 2015 10.00 13 191 1 319 0.61 0.61 n/a –Dec. 31, 2014 10.00 13 881 1 388 0.61 0.61 n/a –Dec. 31, 2013 10.00 11 647 1 165 0.61 0.61 n/a –Dec. 31, 2012 10.00 10 860 1 086 0.57 0.57 n/a –
Series DDec. 31, 2016 10.00 164 136 16 413 0.61 0.61 n/a –Dec. 31, 2015 10.00 173 834 17 383 0.61 0.61 n/a –Dec. 31, 2014 10.00 179 277 17 928 0.61 0.61 n/a –Dec. 31, 2013 10.00 192 022 19 202 0.61 0.61 n/a –Dec. 31, 2012 10.00 192 346 19 235 0.58 0.58 n/a –
Series FDec. 31, 2016 10.00 12 499 1 250 0.56 0.56 n/a –Dec. 31, 2015 10.00 8 769 877 0.56 0.56 n/a –Dec. 31, 2014 10.00 12 965 1 297 0.56 0.56 n/a –Dec. 31, 2013 10.00 19 691 1 969 0.56 0.56 n/a –Dec. 31, 2012 10.00 25 449 2 545 0.52 0.52 n/a –
Series ODec. 31, 2016 10.00 168 559 16 856 0.02 0.02 n/a –Dec. 31, 2015 10.00 185 330 18 533 0.02 0.02 n/a –Dec. 31, 2014 10.00 284 482 28 448 0.02 0.02 n/a –Dec. 31, 2013 10.00 441 689 44 169 0.02 0.02 n/a –Dec. 31, 2012 10.00 696 135 69 614 0.02 0.02 n/a –
1 The management expense ratio (“MER”) is based on expenses for the stated period, excluding commissions and other portfolio transaction costs, and is expressed as an annualized percentage of the daily average net asset value during the period. RBC GAM may, at its discretion and without notice to unitholders, waive or absorb certain operating expenses. MER includes the waiver or absorption by RBC GAM of certain operating expenses, while the MER before absorption shows the MER prior to operating expenses being waived or absorbed by RBC GAM.
2 The Fund’s portfolio turnover rate gives an indication of the level of activity employed by the portfolio manager. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The portfolio turnover rate is not applicable to money market funds.
3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The trading expense ratio is not applicable to fixed-income transactions.
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RBC CANADIAN MONEY MARKET FUND
Series D units have been available for sale to unitholders since July 3, 2007.
Inception dates are not provided for series that have been in existence for more than 10 years.
FINANCIAL HIGHLIGHTS (cont.)
Management Fees RBC GAM is the manager, trustee and portfolio manager of the Fund. Management fees of each series of the Fund are calculated at the annual percentages, before GST/HST, of the daily net asset value of each series of the Fund. The breakdown of the services received in consideration of the management fees for each series, as a percentage of the management fees, is as follows:
Breakdown of Services
Management Fees Distribution Other*
Series A up to 0.75% 33% 67% Advisor Series up to 0.75% 33% 67% Series D up to 0.60% 17% 83%Series F up to 0.50% – 100%
Series O – no management fees are paid by the Fund with respect to Series O units. Series O unitholders pay a negotiated fee directly to RBC GAM for investment-counselling services.* Includes all costs related to management, trustee, investment advisory services, general
administration and profit.
PAST PERFORMANCEThe performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional units of the Fund and would be lower if distributions were not reinvested. The performance information does not take into account sales, redemption, distribution, optional charges or income taxes payable that would have reduced returns or performance. Past performance does not necessarily indicate how the Fund may perform in the future. A fund with more than 10 years of performance history is only permitted to disclose the past 10 years.
Year-by-Year Returns (%) The bar chart indicates the Fund’s performance for each of the years shown, and illustrates how the Fund’s performance has changed from year to year. The bar chart shows, in percentage terms, how much an investment made on the first day of each financial year would have grown or decreased by the end of the financial year.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
SUMMARY OF INVESTMENT PORTFOLIO(after consideration of derivative products, if any)As at December 31, 2016
Investment Mix % of Net Asset Value
Commercial Paper 59.0 Bankers Acceptances and Bank Obligations 34.5 Provincial Obligations 6.3 Cash/Other 0.2
Top 25 Holdings % of Net Asset Value
Bank of Montreal 0.970% Mar 10 2017 3.3Merit Trust - Senior Notes 1.000% Jan 5 2017 3.0Zeus Receivables Trust - Senior Notes 1.088% Jun 19 2017 2.3Canadian Master Trust - Series A 1.000% Jan 5 2017 2.2Toronto-Dominion Bank 0.767% Jan 11 2017 2.2Province of Nova Scotia 0.642% Mar 20 2017 2.2Canadian Imperial Bank of Commerce 0.901% Feb 2 2017 2.0Clarity Trust 1.040% May 30 2017 2.0Enbridge Pipelines Inc. 0.853% Jan 23 2017 2.0Canadian Imperial Bank of Commerce 1.290% Jan 9 2017 1.9Toronto-Dominion Bank 1.080% Mar 1 2017 1.9Toronto-Dominion Bank 0.901% Feb 2 2017 1.9SAFE Trust - Series 1996-1 0.950% Feb 22 2017 1.8Clarity Trust 0.921% Jan 16 2017 1.8National Bank of Canada 1.087% Mar 14 2017 1.7Bank of Montreal 1.290% Jan 10 2017 1.7Fusion Trust 1.100% Jul 21 2017 1.6Banner Trust 1.090% Jul 21 2017 1.6Banner Trust 1.040% Apr 7 2017 1.5Canadian Imperial Bank of Commerce 0.940% Jan 4 2017 1.4BNP Paribas Capital Trust 1.000% Jun 19 2017 1.4Province of Ontario 0.591% Jan 11 2017 1.4SAFE Trust - Series 1996-1 0.871% Jan 4 2017 1.3Fusion Trust 0.881% Feb 1 2017 1.3BNP Paribas Capital Trust 0.831% Jan 11 2017 1.3Top 25 Holdings 46.7
The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund and a quarterly update is available at www.rbcgam.com/funds.
RBC CANADIAN MONEY MARKET FUND
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MONEY MARKET FUND
RBC PREMIUM MONEY MARKET FUND
December 31, 2016
Portfolio Manager RBC Global Asset Management Inc. (“RBC GAM”)
This annual management report of fund performance (“MRFP”) contains financial highlights but does not contain the complete annual financial statements of the Fund. You can get a copy of the financial statements at your request, and at no cost, by calling 1-800-463-FUND (3863), by writing to us at RBC Global Asset Management Inc., P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9, or by visiting our website at www.rbcgam.com/reports or SEDAR at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.
The Board of Directors of RBC Global Asset Management Inc. approved this annual management report of fund performance on March 8, 2017.
A Note on Forward-looking Statements
This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events.
The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
Investment Objective and StrategiesThe Fund seeks to provide current income and liquidity consistent with short-term money market rates for investors who have at least $100,000 to invest.
To preserve the value of the investment, the Fund is invested primarily in high-quality, short-term (one year or less) debt securities, including Treasury bills, bankers acceptances and commercial paper.
RiskThere were no significant changes to the investment objective and strategies that affected the Fund’s overall level of risk during the reporting period. The risks of investing in the Fund and the suitability of the Fund for investors remain as discussed in the Simplified Prospectus.
Results of OperationsThe Fund’s net asset value fell to $1.4 billion as of December 31, 2016, from $1.5 billion at the end of 2015. The decrease was due to net redemptions.
As of December 31, 2016, the current yields were 0.6% for Series A units and 0.7% for Series F units.
Over the past year, the Fund’s Series A units returned 0.57%, compared with the 0.51% rise in the FTSE TMX Canada 91-Day T-Bill Index. The Fund’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.
Money-market rates and commodity prices plunged around the world in early 2016, due to concern that global economic growth might be slower than many investors had anticipated. With energy prices under pressure, Canadian yields declined. Central banks in Europe and Japan responded with renewed actions designed to reignite growth. The Bank of Canada (the “BOC”), however, kept interest rates unchanged during the year, relying on promises of fiscal stimulus to stoke growth.
The U.S. Federal Reserve (the “Fed”) retreated from its earlier outlook of multiple rate hikes in 2016, factoring global financial conditions into its policy calculations. Financial markets calmed as energy prices recovered, but experienced renewed volatility after the U.K. voted in June to withdraw from the EU and in November when Donald Trump’s election victory led to expectations of increased growth, resurgent inflation and substantially higher deficits. The Fed finally hiked rates at year-end, the first hike in exactly a year.
The portfolio manager maintained a longer average term to maturity for the Fund as the BOC signalled its intention to keep its benchmark interest rate unchanged, with a bias towards easing again if merited. The majority of the Fund remained in asset-backed commercial paper, as it provided extra yield with little extra risk. However, the commercial-paper market struggled as ratings downgrades and new regulations resulted in a reduction of permitted issuers. Floating-rate notes, which provided significantly higher yields, were held at levels close to mandatory maximums, while a 5% position in provincial paper satisfied minimum regulatory liquidity rules.
Recent DevelopmentsRecent interest-rate increases by the Fed run counter to what is happening in most developed economies, whose central banks are struggling to combat weak economic growth and unusually low inflation. The portfolio manager’s expectation is that the Fed will continue to gradually raise its benchmark fed funds rate, as the U.S. economy is forecast to outpace the developed world.
Investors expect President Trump to take a more opaque approach to policy than has been the case in past administrations, leaving the market guessing as to how the economy will unfold. Economic projections for Canada were lowered several times in 2016, due to weak business investment and exports, and there is the potential for the Trump administration to pursue policies that crimp Canadian exports. In this environment, the policy bias in Canada leans towards easier monetary policy as opposed to tightening. Consequently, the portfolio manager expects Canadian government money-market yields to stay within a tight range.
Effective December 1, 2016, Mr. Lloyd R. McGinnis retired and Ms. Élaine Cousineau was appointed as Chair of the Independent Review Committee (the “IRC”). Mr. Charles F. Macfarlane was appointed as Vice Chair of the IRC. Effective January 1, 2017, Ms. Suromitra Sanatani and Ms. Catherine Kloepfer were appointed as members of the IRC.
Effective July 1, 2016, Deloitte LLP resigned and PricewaterhouseCoopers LLP was appointed as auditors of the Fund.
Effective June 30, 2016, Series I units were closed to all investors.
RBC PREMIUM MONEY MARKET FUND
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC PREMIUM MONEY MARKET FUND
Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the Fund. RBC GAM is responsible for the Fund’s day-to-day operations, holds title to the Fund’s property on behalf of its unitholders, provides investment advice and portfolio management services to the Fund and appoints distributors for the Fund. RBC GAM is paid a management fee by the Fund as compensation for its services. The Fund pays a fixed administration fee to RBC GAM, which, in turn, pays certain operating expenses of the Fund.
Affiliates of RBC GAM that provide services to the Fund in the course of their normal businesses are discussed below.
DistributorsRBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc. and RBC Dominion Securities Inc. are principal distributors of, or distribute certain series of the units of, the Fund. Dealers receive an ongoing commission based on the total value of their clients’ Series A units.
CustodianRBC Investor Services Trust (“RBC IS”) is the custodian and holds the assets of the Fund.
RegistrarsRoyal Bank and RBC IS are the registrars of the Fund and keep records of who owns the units of the Fund.
Other Related-Party TransactionsPursuant to applicable securities legislation, the Fund 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 Fund, (iii) is in compliance with RBC GAM policies and procedures, and (iv) achieves a fair and reasonable result for the Fund. RBC GAM policy requires that an investment decision in respect of Inter-Fund Trading is in the best interests of each Fund.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years or for the periods since inception. This information is derived from the Fund’s audited annual financial statements. For financial years beginning on or after January 1, 2014, financial highlight information is derived from financial statements prepared in compliance with International Financial Reporting Standards (“IFRS”). For financial years prior to January 1, 2014, financial highlight information is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). “Net Assets,” for the periods prior to 2014, are calculated in accordance with GAAP, and “Net Asset Value” is derived from the valuation method disclosed in the RBC Funds Annual Information Form and is used for transactional purposes (see Ratios and Supplemental Data). All other calculations for the purposes of this MRFP are made using Net Asset Value. There is no significant difference between “Net Assets” and “Net Asset Value” under IFRS.
Change in Net Assets Per Unit ($)
Annual Distributions2 Increase (Decrease) from Operations1 From Total Realized Unrealized Income From Net Assets For the Year/ Net Assets Revenue Total Gains Gains (Excluding From Capital Return End of Period Ended Beginning of Year/Period (Loss) Expenses (Losses) (Losses) Total Dividends) Dividends Gains of Capital Total Year/Period
Series ADec. 31, 2016 10.00 0.10 (0.04) – – 0.06 (0.06) – – – (0.06) 10.00 Dec. 31, 2015 10.00 0.11 (0.04) – – 0.07 (0.07) – – – (0.07) 10.00 Dec. 31, 2014 10.00 0.12 (0.04) – – 0.08 (0.08) – – – (0.08) 10.00 Dec. 31, 2013 10.00 0.12 (0.04) – – 0.08 (0.09) – – – (0.09) 10.00 Dec. 31, 2012 10.00 0.12 (0.03) – – 0.09 (0.09) – – – (0.09) 10.00
Series FDec. 31, 2016 10.00 0.09 (0.02) – – 0.07 (0.07) – – – (0.07) 10.00Dec. 31, 2015 10.00 0.10 (0.02) – – 0.08 (0.08) – – – (0.08) 10.00Dec. 31, 2014 10.00 0.12 (0.02) – – 0.10 (0.10) – – – (0.10) 10.00Dec. 31, 2013 10.00 0.12 (0.02) – – 0.10 (0.10) – – – (0.10) 10.00 Dec. 31, 2012 10.00 0.12 (0.02) – – 0.10 (0.10) – – – (0.10) 10.00
1 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.
2 Distributions are reinvested in additional units of the Fund or paid in cash.
RBC PREMIUM MONEY MARKET FUND
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC PREMIUM MONEY MARKET FUND
FINANCIAL HIGHLIGHTS (cont.)
Ratios and Supplemental Data
Net Asset Value Net Asset Value Number of Units Management MER Before Portfolio TradingAs at Per Unit ($) ($000s) Outstanding (000s) Expense Ratio (%)1 Absorption (%)1 Turnover Rate (%)2 Expense Ratio (%)3
Series ADec. 31, 2016 10.00 1 372 269 137 224 0.35 0.35 n/a – Dec. 31, 2015 10.00 1 497 158 149 716 0.35 0.35 n/a – Dec. 31, 2014 10.00 1 717 382 171 738 0.35 0.35 n/a – Dec. 31, 2013 10.00 2 249 586 224 959 0.35 0.35 n/a –Dec. 31, 2012 10.00 2 795 422 279 542 0.35 0.35 n/a –
Series FDec. 31, 2016 10.00 12 234 1 223 0.25 0.25 n/a –Dec. 31, 2015 10.00 9 627 963 0.25 0.25 n/a –Dec. 31, 2014 10.00 10 882 1 088 0.24 0.24 n/a –Dec. 31, 2013 10.00 14 559 1 456 0.24 0.24 n/a –Dec. 31, 2012 10.00 27 419 2 742 0.24 0.24 n/a –
1 The management expense ratio (“MER”) is based on expenses for the stated period, excluding commissions and other portfolio transaction costs, and is expressed as an annualized percentage of the daily average net asset value during the period. RBC GAM may, at its discretion and without notice to unitholders, waive or absorb certain operating expenses. MER includes the waiver or absorption by RBC GAM of certain operating expenses, while the MER before absorption shows the MER prior to operating expenses being waived or absorbed by RBC GAM.
2 The Fund’s portfolio turnover rate gives an indication of the level of activity employed by the portfolio manager. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The portfolio turnover rate is not applicable to money market funds.
3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The trading expense ratio is not applicable to fixed-income transactions.
Management Fees RBC GAM is the manager, trustee and portfolio manager of the Fund. Management fees of each series of the Fund are calculated at the annual percentages, before GST/HST, of the daily net asset value of each series of the Fund. The breakdown of the services received in consideration of the management fees for each series, as a percentage of the management fees, is as follows:
Breakdown of Services
Management Fees Distribution Other*
Series A up to 0.30% 83% 17%Series F up to 0.20% – 100%
* Includes all costs related to management, trustee, investment advisory services, general administration and profit.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
PAST PERFORMANCEThe performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional units of the Fund and would be lower if distributions were not reinvested. The performance information does not take into account sales, redemption, distribution, optional charges or income taxes payable that would have reduced returns or performance. Past performance does not necessarily indicate how the Fund may perform in the future. A fund with more than 10 years of performance history is only permitted to disclose the past 10 years.
Year-by-Year Returns (%) The bar chart indicates the Fund’s performance for each of the years shown, and illustrates how the Fund’s performance has changed from year to year. The bar chart shows, in percentage terms, how much an investment made on the first day of each financial year would have grown or decreased by the end of the financial year.
Series F units have been available for sale to unitholders since March 7, 2007.
Inception dates are not provided for series that have been in existence for more than 10 years.
RBC PREMIUM MONEY MARKET FUND
SUMMARY OF INVESTMENT PORTFOLIO(after consideration of derivative products, if any)As at December 31, 2016
Investment Mix % of Net Asset Value
Commercial Paper 60.6 Bankers Acceptances and Bank Obligations 32.9 Provincial Obligations 6.3 Cash/Other 0.2
Top 25 Holdings % of Net Asset Value
Bank of Montreal 0.970% Mar 10 2017 3.4Prime Trust - Senior Notes 1.100% Jun 19 2017 2.9BNP Paribas Capital Trust 1.000% Jun 19 2017 2.7HSBC Bank Canada 0.800% Jan 12 2017 2.2Clarity Trust 1.100% Jul 21 2017 2.2SOUND Trust 0.871% Jan 17 2017 2.1SURE Trust 0.949% Mar 3 2017 2.0Canadian Imperial Bank of Commerce 1.290% Jan 9 2017 1.9Toronto-Dominion Bank 1.080% Mar 1 2017 1.8Zeus Receivables Trust - Senior Notes 0.949% Feb 28 2017 1.8SAFE Trust - Series 1996-1 0.950% Mar 14 2017 1.8Banner Trust 1.090% Jul 21 2017 1.7Toronto-Dominion Bank 1.000% Apr 5 2017 1.7Bank of Montreal 1.290% Jan 10 2017 1.7National Bank of Canada 1.087% Mar 14 2017 1.7Fusion Trust 1.100% Jun 16 2017 1.6Canadian Imperial Bank of Commerce 0.940% Jan 4 2017 1.6Ridge Trust 1.000% Jan 5 2017 1.5Honda Canada Finance Inc. 0.802% Jan 17 2017 1.4SAFE Trust - Series 1996-1 1.030% Jun 8 2017 1.4Canadian Master Trust - Series A 1.030% May 3 2017 1.4Canadian Imperial Bank of Commerce 0.755% Jan 6 2017 1.4Enbridge Gas Distribution Inc. 0.835% Jan 26 2017 1.4Province of New Brunswick 0.600% Jan 10 2017 1.3Banner Trust 0.949% Feb 24 2017 1.3Top 25 Holdings 45.9
The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund and a quarterly update is available at www.rbcgam.com/funds.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MONEY MARKET FUND
RBC $U.S. MONEY MARKET FUND
December 31, 2016
Portfolio Manager RBC Global Asset Management Inc. (“RBC GAM”)
This annual management report of fund performance (“MRFP”) contains financial highlights but does not contain the complete annual financial statements of the Fund. You can get a copy of the financial statements at your request, and at no cost, by calling 1-800-463-FUND (3863), by writing to us at RBC Global Asset Management Inc., P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9, or by visiting our website at www.rbcgam.com/reports or SEDAR at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.
The Board of Directors of RBC Global Asset Management Inc. approved this annual management report of fund performance on March 8, 2017.
A Note on Forward-looking Statements
This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events.
The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
MANAGEMENT DISCUSSION OF FUND PERFORMANCE (in USD)
Investment Objective and StrategiesThe Fund seeks to provide U.S. dollar current income and liquidity consistent with short-term U.S. money-market rates.
To preserve the value of the investment, the Fund is invested primarily in high-quality short-term (one year or less) debt securities including Treasury bills, bankers acceptances and commercial paper.
RiskThere were no significant changes to the investment objective and strategies that affected the Fund’s overall level of risk during the reporting period. The risks of investing in the Fund and the suitability of the Fund for investors remain as discussed in the Simplified Prospectus.
Results of OperationsThe Fund’s net asset value rose to $137 million as of December 31, 2016, from $135 million at the end of 2015. The increase was due mainly to net inflows.
As of December 31, 2016, the current yields were 0.7% for Series A units, 0.8% for Series D units and 1.0% for Series O units.
Over the past year, the Fund’s Series A units returned 0.50%, compared with the 0.27% rise in the Citigroup 3-Month T-Bill Index. The Fund’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses. In response to an extremely low interest rate environment and to support the yield to unitholders, the management fees of some series of the Fund have been temporarily reduced by RBC GAM. The decision to temporarily reduce management fees is determined at the discretion of RBC GAM.
U.S. money-market rates and commodity prices plunged around the world in early 2016, due to concern that global economic growth might be slower than many investors had anticipated. Central banks in Europe and Japan responded with renewed actions designed to reignite growth. The U.S. Federal Reserve (the “Fed”) retreated from its earlier outlook of multiple rate hikes in 2016, factoring global financial conditions into its policy calculations. Financial markets calmed as energy prices recovered, but experienced renewed volatility after the U.K. voted in June to withdraw from the EU and in November when Donald Trump’s election victory led to expectations of increased growth, resurgent inflation and substantially higher deficits. The Fed finally hiked rates at year-end, the first hike in exactly a year, and alerted investors to the prospect of more rate hikes in 2017 than were initially expected.
The portfolio manager varied the Fund’s average term to maturity to reflect the Fed’s increasing reluctance to hike interest rates. Initial expectations were that the Fed would raise rates four times, but it ended up hiking them just once. As prospects for a rate increase rose towards year-end, the portfolio manager consolidated short-term maturities to coincide with a hike. Corporate holdings continued to be light due to a shortage of corporate securities in money markets. The Fund’s primary investments continued to be asset-backed commercial paper for yield and bank paper for liquidity. A 15% position in government paper was maintained to satisfy minimum liquidity regulatory rules.
Recent DevelopmentsThe pace at which the Fed raises interest rates will be a focal point for markets in 2017, particularly as the U.S. central bank has now indicated that it expects to boost rates three times next year. Furthermore, the unorthodox governing style of Donald Trump will likely provide surprises that will influence the economy.
The portfolio manager expects to actively manage the Fund in response to political uncertainty and shifts in rate-hike projections in 2017, but expects the U.S. economy to outpace the rest of the developed world. This more opaque outlook will result in the portfolio manager taking less risk with the Fund’s assets.
Effective December 1, 2016, Mr. Lloyd R. McGinnis retired and Ms. Élaine Cousineau was appointed as Chair of the Independent Review Committee (the “IRC”). Mr. Charles F. Macfarlane was appointed as Vice Chair of the IRC. Effective January 1, 2017, Ms. Suromitra Sanatani and Ms. Catherine Kloepfer were appointed as members of the IRC.
Effective July 1, 2016, Deloitte LLP resigned and PricewaterhouseCoopers LLP was appointed as auditors of the Fund.
Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the Fund. RBC GAM is responsible for the Fund’s day-to-day operations, holds title to the Fund’s property on behalf of its unitholders, provides investment advice and portfolio management services to the Fund and appoints distributors for the Fund. RBC GAM is paid a management fee by the Fund as compensation for its services. The Fund pays a fixed administration fee to RBC GAM, which, in turn, pays certain operating expenses of the Fund.
Affiliates of RBC GAM that provide services to the Fund in the course of their normal businesses are discussed below.
RBC $U.S. MONEY MARKET FUND(IN U.S. DOLLARS)
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC $U.S. MONEY MARKET FUND(IN U.S. DOLLARS)
DistributorsRBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc., RBC Dominion Securities Inc. and Phillips, Hager & North Investment Funds Ltd. are principal distributors of, or distribute certain series of the units of, the Fund. Dealers receive an ongoing commission based on the total value of their clients’ Series A and Series D units.
CustodianRBC Investor Services Trust (“RBC IS”) is the custodian and holds the assets of the Fund.
RegistrarsRoyal Bank, RBC IS and RBC GAM are the registrars of the Fund and keep records of who owns the units of the Fund.
Other Related-Party TransactionsPursuant to applicable securities legislation, the Fund 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 Fund, (iii) is in compliance with RBC GAM policies and procedures, and (iv) achieves a fair and reasonable result for the Fund. RBC GAM policy requires that an investment decision in respect of Inter-Fund Trading is in the best interests of each Fund.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
RBC $U.S. MONEY MARKET FUND(IN U.S. DOLLARS)
FINANCIAL HIGHLIGHTS (in USD) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the past five years or for the periods since inception. This information is derived from the Fund’s audited annual financial statements. For financial years beginning on or after January 1, 2014, financial highlight information is derived from financial statements prepared in compliance with International Financial Reporting Standards (“IFRS”). For financial years prior to January 1, 2014, financial highlight information is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). “Net Assets,” for the periods prior to 2014, are calculated in accordance with GAAP, and “Net Asset Value” is derived from the valuation method disclosed in the RBC Funds Annual Information Form and is used for transactional purposes (see Ratios and Supplemental Data). All other calculations for the purposes of this MRFP are made using Net Asset Value. There is no significant difference between “Net Assets” and “Net Asset Value” under IFRS.
Change in Net Assets Per Unit
Annual Distributions2 Increase (Decrease) from Operations1 From Total Realized Unrealized Income From Net Assets For the Year/ Net Assets Revenue Total Gains Gains (Excluding From Capital Return End of Period Ended Beginning of Year/Period (Loss) Expenses (Losses) (Losses) Total Dividends) Dividends Gains of Capital Total Year/Period
Series ADec. 31, 2016 10.00 0.08 (0.03) – – 0.05 (0.05) – – – (0.05) 10.00 Dec. 31, 2015 10.00 0.04 (0.02) – – 0.02 (0.02) – – – (0.02) 10.00 Dec. 31, 2014 10.00 0.03 (0.02) – – 0.01 (0.01) – – – (0.01) 10.00 Dec. 31, 2013 10.00 0.03 (0.02) – – 0.01 (0.01) – – – (0.01) 10.00 Dec. 31, 2012 10.00 0.04 (0.02) – – 0.02 (0.02) – – – (0.02) 10.00
Series DDec. 31, 2016 10.00 0.09 (0.03) – – 0.06 (0.06) – – – (0.06) 10.00Dec. 31, 2015 10.00 0.03 (0.02) – – 0.01 (0.01) – – – (0.01) 10.00Dec. 31, 2014 10.00 0.03 (0.02) – – 0.01 (0.01) – – – (0.01) 10.00Dec. 31, 2013 10.00 0.03 (0.02) – – 0.01 (0.02) – – – (0.02) 10.00 Dec. 31, 2012 10.00 0.04 (0.02) – – 0.02 (0.02) – – – (0.02) 10.00
Series ODec. 31, 2016 10.00 0.08 – – – 0.08 (0.08) – – – (0.08) 10.00Dec. 31, 2015 10.00 0.04 – – – 0.04 (0.04) – – – (0.04) 10.00Dec. 31, 2014 10.00 0.02 – – – 0.02 (0.02) – – – (0.02) 10.00Dec. 31, 2013 10.00 0.03 – – – 0.03 (0.04) – – – (0.04) 10.00 Dec. 31, 2012 10.00 0.04 – – – 0.04 (0.04) – – – (0.04) 10.00
1 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.
2 Distributions are reinvested in additional units of the Fund or paid in cash.
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2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE
FINANCIAL HIGHLIGHTS (in USD) (cont.)
Ratios and Supplemental Data
Net Asset Value Net Asset Value Number of Units Management MER Before Portfolio TradingAs at Per Unit ($) ($000s) Outstanding (000s) Expense Ratio (%)1 Absorption (%)1 Turnover Rate (%)2 Expense Ratio (%)3
Series ADec. 31, 2016 10.00 93 352 9 335 0.30 0.30 n/a – Dec. 31, 2015 10.00 106 553 10 655 0.17 0.17 n/a – Dec. 31, 2014 10.00 142 087 14 209 0.17 0.17 n/a – Dec. 31, 2013 10.00 171 061 17 106 0.21 0.21 n/a –Dec. 31, 2012 10.00 253 402 25 340 0.22 0.22 n/a –
Series DDec. 31, 2016 10.00 25 494 2 549 0.25 0.25 n/a –Dec. 31, 2015 10.00 19 855 1 985 0.17 0.17 n/a –Dec. 31, 2014 10.00 23 125 2 312 0.17 0.17 n/a –Dec. 31, 2013 10.00 27 081 2 708 0.21 0.21 n/a –Dec. 31, 2012 10.00 26 545 2 654 0.22 0.22 n/a –
Series ODec. 31, 2016 10.00 18 359 1 836 0.02 0.02 n/a –Dec. 31, 2015 10.00 8 092 809 0.02 0.02 n/a –Dec. 31, 2014 10.00 1 521 152 0.02 0.02 n/a –Dec. 31, 2013 10.00 1 811 181 0.02 0.02 n/a –Dec. 31, 2012 10.00 3 107 311 0.02 0.02 n/a –
1 The management expense ratio (“MER”) is based on expenses for the stated period, excluding commissions and other portfolio transaction costs, and is expressed as an annualized percentage of the daily average net asset value during the period. RBC GAM may, at its discretion and without notice to unitholders, waive or absorb certain operating expenses. MER includes the waiver or absorption by RBC GAM of certain operating expenses, while the MER before absorption shows the MER prior to operating expenses being waived or absorbed by RBC GAM.
2 The Fund’s portfolio turnover rate gives an indication of the level of activity employed by the portfolio manager. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The portfolio turnover rate is not applicable to money market funds.
3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The trading expense ratio is not applicable to fixed-income transactions.
RBC $U.S. MONEY MARKET FUND(IN U.S. DOLLARS)
Management Fees RBC GAM is the manager, trustee and portfolio manager of the Fund. Management fees of each series of the Fund are calculated at the annual percentages, before GST/HST, of the daily net asset value of each series of the Fund. The breakdown of the services received in consideration of the management fees for each series, as a percentage of the management fees, is as follows:
Breakdown of Services
Management Fees Distribution Other*
Series A up to 0.85% 29% 71% Series D up to 0.60% 17% 83%
Series O – no management fees are paid by the Fund with respect to Series O units. Series O unitholders pay a negotiated fee directly to RBC GAM for investment-counselling services.* Includes all costs related to management, trustee, investment advisory services, general
administration and prof