MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

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, CA Chief Executive Officer Chief Financial Officer RBC Global Asset Management Inc. RBC GAM Funds August 9, 2021

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. 2021 INTERIM FINANCIAL STATEMENTS

SCHEDULE OF INVESTMENT PORTFOLIO (unaudited) (in $000s) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

June 30, 2021

Fair % of Net Fair % of Net Holdings Security Cost Value Assets Holdings Security Cost Value Assets EQUITIES Financials (cont.) CANADIAN EQUITIES 146 780 Element Fleet Communication Services Management Corp. $ 1 170 $ 2 122 195 822 BCE Inc. $ 9 060 $ 11 971 10 137 Fairfax Financial Holdings Ltd. 6 390 5 510 47 176 Quebecor Inc., Class B 1 326 1 560 56 749 Intact Financial Corp. 6 794 9 557 135 764 Inc., 537 616 Financial Corporation 11 250 13 118 Class B 6 632 8 947 89 340 National Bank of 5 603 8 288 248 338 Inc., 215 434 Power Corporation of Canada 5 726 8 441 Class B 6 041 8 918 427 073 * 26 420 53 636 470 449 Corp. 11 099 13 078 192 731 Inc. 8 037 12 319 34 158 44 474 5.5 470 504 Toronto- Bank 20 649 40 873 Consumer Discretionary 149 724 253 154 31.4 135 506 Inc. 2 189 5 025 Health Care 102 476 AutoCanada Inc. 1 742 5 118 88 122 Co. Inc. 5 987 3 206 47 608 Canada Goose Holdings Inc. 2 381 2 579 132 983 Corp. 2 557 3 987 12 615 Corp. Ltd., Class A 1 024 2 475 246 126 Chartwell Retirement Residences 42 726 Inc. 2 127 2 424 Real Estate Investment Trust 3 099 3 261 104 548 Inc., Class A 3 872 11 999 11 643 10 454 1.3 55 113 Pet Valu Holdings Ltd. 1 102 1 474 Industrials 117 862 Recipe Unlimited Corp. 1 469 2 505 45 589 AG Growth International Inc. 1 768 1 756 108 517 Restaurant Brands International Inc. 7 655 8 667 152 004 Air Canada 2 627 3 876 993 327 Zungui Haixi Corp. 2 722 – 147 727 ATS Automation Tooling Systems 3 251 5 256 26 283 42 266 5.2 16 026 Boyd Group Services Inc. 3 119 3 615 Consumer Staples 73 664 CAE Inc. 2 286 2 812 214 923 Alimentation Couche-Tard Inc. 4 996 9 790 186 878 Canadian National Railway Co. 9 571 24 442 548 156 Inc. 3 294 1 562 225 820 Ltd. 9 316 21 525 19 121 George Weston Ltd. 1 733 2 259 16 144 TFI International Inc. 1 485 1 827 68 053 Ltd. 3 788 5 192 72 413 Corp. 3 071 8 916 84 256 Maple Leaf Foods Inc. 2 568 2 168 69 168 Waste Connections Inc. 5 201 10 244 111 300 Neighbourly Pharmacy Inc. 1 892 3 116 24 318 WSP Global Inc. 2 091 3 519 26 785 Premium Brands Holdings Corp. 2 371 3 373 43 786 87 788 10.9 65 562 Saputo Group Inc. 2 396 2 424 Information Technology 23 038 29 884 3.7 85 908 CGI Inc. 4 749 9 655 Energy 67 955 Descartes Systems Group Inc. 2 946 5 826 387 998 Canadian Natural Resources Ltd. 14 069 17 461 129 500 Farmers Edge Inc. 2 226 1 551 516 382 Inc. 22 916 25 628 20 716 Kinaxis Inc. 1 698 3 378 75 103 Keyera Corp. 1 046 2 502 97 500 Magnet Forensics Inc. 1 658 2 489 117 541 Parex Resources Inc. 2 460 2 433 120 722 Open Text Corp. 4 599 7 599 148 424 Corp. 5 435 5 846 28 495 Inc., Class A 8 570 51 658 534 825 Inc. 20 392 15 879 65 800 TELUS International CDA Inc. 2 106 2 533 279 949 TC Energy Corp. 12 956 17 172 113 458 VerticalScope Holdings Inc. 2 515 2 638 207 285 Tourmaline Oil Corp. 5 905 7 344 31 067 87 327 10.8 85 179 94 265 11.7 Materials Financials 95 854 Agnico Eagle Mines Ltd. 4 420 7 185 197 492 15 123 25 093 11 534 Centerra Gold Inc. 152 109 298 805 Bank of Nova Scotia 17 443 24 090 102 759 Endeavour Corp. 2 340 2 735 465 312 Brookfield Asset Management Inc., 195 943 Ltd. 3 660 5 598 Class A 10 786 29 426 29 922 Franco-Nevada Corp. 2 198 5 383 3 209 Brookfield Asset Management 109 854 Interfor Corp. 1 602 3 410 Reinsurance Partners Ltd. 221 167 58 889 Corp. 547 463 145 375 Canadian Imperial 104 845 Ltd. 4 796 5 008 Bank of Commerce 14 112 20 514 98 522 Labrador Iron Ore Royalty Corp. 2 510 4 628

The accompanying notes are an integral part of the financial statements. SCHEDULE OF INVESTMENT PORTFOLIO (unaudited) (in $000s) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

June 30, 2021

Fair % of Net Fair % of Net Holdings Security Cost Value Assets Holdings Security Cost Value Assets Materials (cont.) Materials 236 943 Lundin Mining Corp. $ 1 259 $ 2 649 58 952 Newmont Corp. $ 2 573 $ 4 632 167 791 Ltd. 10 964 12 603 2 573 4 632 0.6 720 257 OceanaGold Corp. 2 139 1 693 Real Estate 60 286 Pan American Silver Corp. 1 115 2 134 1 551 Equinix Inc. Real Estate 367 900 Pan American Silver Corp., Rights – 388 Investment Trust 1 214 1 543 45 403 SSR Mining Inc. 1 099 879 1 214 1 543 0.2 177 259 Ltd., Class B 5 744 5 061 TOTAL UNITED STATES EQUITIES 18 771 28 623 3.6 158 680 Torex Gold Resources Inc. 2 630 2 266 TOTAL EQUITIES 512 433 800 988 99.4 144 194 Corp. 3 717 7 879 SHORT-TERM INVESTMENTS† 2 355 2 355 0.3 683 972 Yamana Gold Inc. 3 016 3 570 TOTAL INVESTMENTS 514 788 803 343 99.7 53 908 73 641 9.1 UNREALIZED GAIN ON FOREIGN Real Estate EXCHANGE CONTRACTS (SCHEDULE A) – 36 – 114 268 Allied Properties Real Estate UNREALIZED LOSS ON FOREIGN Investment Trust 4 486 5 148 EXCHANGE CONTRACTS (SCHEDULE A) – (278) – 56 987 Canadian Apartment Properties TOTAL PORTFOLIO $ 514 788 803 101 99.7 Real Estate Investment Trust 2 929 3 312 OTHER NET ASSETS ATTRIBUTABLE 100 652 Choice Properties Real Estate TO HOLDERS OF REDEEMABLE UNITS 2 240 0.3 Investment Trust 827 1 438 NET ASSETS ATTRIBUTABLE 24 403 Colliers International Group Inc. 1 805 3 388 TO HOLDERS OF REDEEMABLE UNITS $ 805 341 100.0 23 662 FirstService Corp. 2 390 5 031 37 748 Granite Real Estate Investment Trust 2 934 3 113 139 881 InterRent Real Estate SCHEDULE A Investment Trust 1 401 2 358 Foreign Exchange Contracts 123 752 SmartCentres Real Estate Unrealized Contracts Maturity Date Gain Investment Trust 2 524 3 635 195 170 Tricon Residential Inc. 2 035 2 783 Bought CAD 1 068 Sold USD 850 @ 1.2564 13-Jul-2021 $ 14 Bought CAD 1 106 Sold USD 881 @ 1.2555 13-Jul-2021 15 21 331 30 206 3.8 Bought CAD 453 Sold USD 365 @ 1.2398 13-Jul-2021 – Utilities Bought CAD 496 Sold USD 400 @ 1.2406 13-Jul-2021 – 242 079 Algonquin Power & Utilities Corp. 2 733 4 471 Bought USD 200 Sold CAD 242 @ 0.8273 13-Jul-2021 6 161 966 AltaGas Ltd. 3 141 4 214 Bought USD 40 Sold CAD 48 @ 0.8256 13-Jul-2021 1 48 805 Brookfield Infrastructure Partners LP 2 507 3 359 $ 36 62 902 Fortis Inc. 3 280 3 451 80 664 Northland Power Inc. 1 884 3 411 Unrealized Contracts Maturity Date Loss 13 545 18 906 2.4 TOTAL CANADIAN EQUITIES 493 662 772 365 95.8 Bought CAD 1 578 Sold USD 1 300 @ 1.2139 13-Jul-2021 $ (33) UNITED STATES EQUITIES Bought CAD 4 275 Sold USD 3 533 @ 1.2101 20-Aug-2021 (105) Communication Services Bought CAD 5 305 Sold USD 4 392 @ 1.2078 03-Sep-2021 (140) 20 268 Match Group Inc. 2 776 4 051 $ (278) 18 000 T-Mobile US Inc. 3 172 3 232 TOTAL FOREIGN EXCHANGE $ (242) 5 948 7 283 0.9 All counterparties have a credit rating of at least A. Consumer Discretionary 4 944 Inc. 1 338 2 237 * Investment in related party (see note 8 in the generic notes). 1 338 2 237 0.3 † Consumer Staples Short-term investments, which may be made up of treasury bills, commercial paper, term deposits and discount notes, earn interest at rates ranging from 0.16% to 0.18% and mature 6 204 Estée Lauder Companies Inc., between July 5, 2021 and July 21, 2021. Class A 1 771 2 446 1 771 2 446 0.3 Information Technology 3 587 Ansys Inc. 1 108 1 543 12 177 Globant S.A. 1 620 3 308 3 975 Mastercard Inc. 1 569 1 799 10 605 PayPal Holdings Inc. 1 630 3 832 5 927 10 482 1.3

The accompanying notes are an integral part of the financial statements. FINANCIAL STATEMENTS (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

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

June 30 December 31 For the periods ended June 30 (see note 2 in the generic notes) 2021 2020 (see note 2 in the generic notes) 2021 2020 ASSETS INCOME (see note 3 in the generic notes) Investments at fair value $ 803 343 $ 718 703 Dividends $ 10 448 $ 11 961 Cash 309 291 Interest for distribution purposes 3 69 Subscriptions receivable 168 164 Income from investment trusts 459 349 Unrealized gain on foreign exchange contracts 36 175 Derivative income 706 12 Dividends receivable, interest accrued Net realized gain (loss) on investments 26 367 (9 715) and other assets 1 923 2 001 Change in unrealized gain (loss) on investments 90 962 (64 169) TOTAL ASSETS 805 779 721 334 TOTAL NET GAIN (LOSS) ON LIABILITIES INVESTMENTS AND DERIVATIVES 128 945 (61 493) Redemptions payable 33 11 Other income (loss) – 2 Unrealized loss on foreign exchange contracts 278 – Securities lending revenue Accounts payable and accrued expenses 127 117 (see note 7 in the generic notes) 22 94 TOTAL LIABILITIES EXCLUDING NET ASSETS Net gain (loss) on foreign cash balances 4 (23) ATTRIBUTABLE TO HOLDERS OF TOTAL OTHER INCOME (LOSS) 26 73 REDEEMABLE UNITS 438 128 TOTAL INCOME (LOSS) 128 971 (61 420) NET ASSETS ATTRIBUTABLE TO HOLDERS EXPENSES (see notes – Fund Specific Information) OF REDEEMABLE UNITS (“NAV”) $ 805 341 $ 721 206 Management fees 481 415 Administration fees 188 169 Investments at cost $ 514 788 $ 521 527 Independent Review Committee costs 1 1 GST/HST 58 52 NAV Transaction costs 54 123 SERIES A $ 2 069 $ 1 970 Withholding tax 17 10 ADVISOR SERIES $ – $ – TOTAL EXPENSES 799 770 SERIES D $ 114 596 $ 101 441 INCREASE (DECREASE) IN NAV $ 128 172 $ (62 190) SERIES F $ 3 642 $ 2 834 INCREASE (DECREASE) IN NAV SERIES O $ 685 034 $ 614 961 SERIES A $ 324 $ (164) NAV PER UNIT ADVISOR SERIES $ – $ (12) SERIES A $ 48.44 $ 41.28 SERIES D $ 17 621 $ (8 757) ADVISOR SERIES $ – $ – SERIES F $ 539 $ (229) SERIES D $ 48.03 $ 40.77 SERIES O $ 109 688 $ (53 028) SERIES F $ 48.39 $ 41.03 INCREASE (DECREASE) IN NAV PER UNIT SERIES O $ 49.46 $ 41.79 SERIES A $ 7.18 $ (3.51) ADVISOR SERIES $ – $ (3.05) SERIES D $ 7.26 $ (3.39) SERIES F $ 7.42 $ (3.41) SERIES O $ 7.71 $ (3.21)

The accompanying notes are an integral part of these financial statements. FINANCIAL STATEMENTS (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

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

For the periods ended June 30 (see note 2 in the generic notes) 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in NAV $ 128 172 $ (62 190) ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes – – Non-cash dividends (221) – Non-cash distributions from underlying funds – – Net realized loss (gain) on investments (26 367) 9 715 Change in unrealized loss (gain) on investments (90 962) 64 169 (Increase) decrease in accrued receivables 78 (70) Increase (decrease) in accrued payables 10 (16) (Increase) decrease in margin accounts – – Cost of investments purchased* (85 847) (175 360) Proceeds from sale and maturity of investments* 119 174 213 618 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 44 037 49 866 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of redeemable units* 9 944 13 610 Cash paid on redemption of redeemable units* (53 963) (63 305) Distributions paid to holders of redeemable units – – NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (44 019) $ (49 695) Net increase (decrease) in cash for the period 18 171 Cash (bank overdraft), beginning of period 291 421 CASH (BANK OVERDRAFT), END OF PERIOD $ 309 $ 592

Interest received (paid)† $ 3 $ 75 Income from investment trusts received (paid)†‡ $ 448 $ 337 Dividends received (paid)†‡ $ 10 298 $ 11 887

* Excludes in-kind transactions. † Classified as part of operating activities. ‡ Net of withholding taxes, if applicable.

The accompanying notes are an integral part of these financial statements. FINANCIAL STATEMENTS (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

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

For the periods ended June 30 Series A Advisor Series Series D Series F (see note 2 in the generic notes) 2021 2020 2021 2020 2021 2020 2021 2020 NAV AT BEGINNING OF PERIOD $ 1 970 $ 2 017 $ – $ 159 $ 101 441 $ 104 754 $ 2 834 $ 2 852 INCREASE (DECREASE) IN NAV 324 (164) – (12) 17 621 (8 757) 539 (229) Early redemption fees – – – – – – – – Proceeds from redeemable units issued 286 32 – 8 2 277 1 028 648 208 Reinvestments of distributions to holders of redeemable units – – – – – – – – Redemption of redeemable units (511) (275) – (9) (6 743) (5 326) (379) (391) NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (225) (243) – (1) (4 466) (4 298) 269 (183) Distributions from net income – – – – – – – – Distributions from net gains – – – – – – – – Distributions from capital – – – – – – – – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS – – – – – – – – NET INCREASE (DECREASE) IN NAV 99 (407) – (13) 13 155 (13 055) 808 (412) NAV AT END OF PERIOD $ 2 069 $ 1 610 $ – $ 146 $ 114 596 $ 91 699 $ 3 642 $ 2 440

For the periods ended June 30 Series O Total (see note 2 in the generic notes) 2021 2020 2021 2020 NAV AT BEGINNING OF PERIOD $ 614 961 $ 674 523 $ 721 206 $ 784 305 INCREASE (DECREASE) IN NAV 109 688 (53 028) 128 172 (62 190) Early redemption fees – – – – Proceeds from redeemable units issued 7 597 12 608 10 808 13 884 Reinvestments of distributions to holders of redeemable units – – – – Redemption of redeemable units (47 212) (57 565) (54 845) (63 566) NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (39 615) (44 957) (44 037) (49 682) Distributions from net income – – – – Distributions from net gains – – – – Distributions from capital – – – – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS – – – – NET INCREASE (DECREASE) IN NAV 70 073 (97 985) 84 135 (111 872) NAV AT END OF PERIOD $ 685 034 $ 576 538 $ 805 341 $ 672 433

The accompanying notes are an integral part of these financial statements. NOTES TO FINANCIAL STATEMENTS – FUND SPECIFIC INFORMATION (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

June 30, 2021

Effective June 26, 2020, Advisor Series units were capped and Since historical correlation may not be representative of were re-designated as Series A units effective August 4, 2020. future correlation, actual results could differ from this sensitivity analysis and the difference could be material. General information (see note 1 in the generic notes) Fair value hierarchy ($000s except % amounts) The investment objective of the Fund is to provide investors (see note 3 in the generic notes) with long-term capital growth by investing primarily in a well-diversified portfolio of Canadian common stocks. The following is a summary of the inputs used as of The Fund also may invest a portion of its assets in U.S. and June 30, 2021 and December 31, 2020. international securities in order to achieve greater exposure June 30, 2021 Level 1 Level 2 Level 3 Total to industries that are not well represented in Canada. Equities 800 988 – – 800 988 Underlying funds – – – – Financial instrument risk and capital management Fixed-income (see note 5 in the generic notes) and debt securities – – – – Short-term investments – 2 355 – 2 355 Liquidity risk (%) Derivatives – assets – 36 – 36 Any securities deemed to be illiquid are identified in the Derivatives – liabilities – (278) – (278) Schedule of Investment Portfolio. Illiquid securities represent Total financial instruments 800 988 2 113 – 803 101 approximately 0.0% (December 31, 2020 – 0.3%) of the NAV of % of total portfolio 99.7 0.3 – 100.0 the Fund.

Concentration risk (%) December 31, 2020 Level 1 Level 2 Level 3 Total Equities 709 638 1 482 2 500 713 620 The table below summarizes the Fund’s investment exposure Underlying funds – – – – (after consideration of derivative products, if any) as at: Fixed-income and debt securities – – – – June 30 December 31 Investment mix 2021 2020 Short-term investments – 5 083 – 5 083 Financials 31.4 30.8 Derivatives – assets – 175 – 175 Information Technology 12.1 10.8 Derivatives – liabilities – – – – Energy 11.7 10.1 Total financial instruments 709 638 6 740 2 500 718 878 Industrials 10.9 12.1 % of total portfolio 98.8 0.9 0.3 100.0 Materials 9.7 11.1 For the period ended June 30, 2021, there were transfers of Communication Services 6.4 6.4 Consumer Discretionary 5.5 5.3 $2,500 of financial instruments into Level 1 from Level 3 Consumer Staples 4.0 4.6 and transfers of $1,482 of financial instruments into Level 1 Real Estate 4.0 3.9 from Level 2. The securities transferred into Level 1 from Utilities 2.4 2.7 Level 3 relate to the exchange of privately held investments Health Care 1.3 1.2 for actively traded equity positions. The securities transferred Cash/Other 0.6 1.0 Total 100.0 100.0 into Level 1 from Level 2 relate to the exchange of restricted- trading, discount-priced securities for listed, actively traded Other price risk (% impact on NAV) equity positions. For the period ended December 31, 2020, In light of current market volatility related to COVID‑19, there were no transfers of financial instruments between management has applied 10% for other price risk sensitivity. Level 1, Level 2 and Level 3.

The table below shows the impact of a 10% 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 December 31 2021 2020 S&P/TSX Capped Composite Total Return Index + or - 9.8 + or - 9.8

Please see the generic notes at the back of the financial statements. NOTES TO FINANCIAL STATEMENTS – FUND SPECIFIC INFORMATION (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

June 30, 2021

During the periods ended June 30, 2021 and Management fees Administration fees December 31, 2020, the reconciliation of financial Series A 1.60% 0.10% instruments measured at fair value using unobservable Advisor Series 1.60% 0.10% inputs (Level 3) is presented as follows: Series D 0.85% 0.10% Series F 0.60% 0.10% June 30 December 31 Series O n/a* 0.04% 2021 2020 * Series O unitholders pay a negotiated management fee directly to RBC GAM for Balance at beginning of period 2 500 2 500 investment-counselling services. Net purchases – – Net sales – – Investments by related parties Net transfers in (out) (3 339) – ($000s except unit amounts) Realized gains (losses) 839 – Change in unrealized gains (losses) – – Royal Bank of Canada, or one of its subsidiaries, held the Balance at end of period – 2 500 following investments in the Fund as at:

Change in unrealized gains (losses) for June 30 December 31 Level 3 assets held at end of period – – 2021 2020 Units held The Fund fair values certain of its Level 3 investments Series A 20 20 (privately held investments) using prior transaction prices Series F 22 22 (acquisition cost), although the transaction may not have Series O 24 24 occurred during the current reporting period. As there Value of all units 3 3 may not be a secondary market, and/or there are a limited number of investors, the valuations are reviewed utilizing Taxes ($000s) (see note 6 in the generic notes) available market information to determine if the carrying The non-capital and capital losses as at December 31, 2020 value should be adjusted. Such market information may for the Fund were approximately: include, but is not limited to, observations of the trading Capital losses 14 334 multiples of public companies considered comparable to Non-capital losses – the private companies being valued, financial or operational information released by the company, and/or news or Redeemable units (000s) corporate events that affect the investment. Valuations may There is no limitation on the number of units available for be adjusted to account for company-specific issues, the lack issue. Units are purchased and redeemed at the NAV per unit. of liquidity inherent in a non-public investment and the fact For the periods ended June 30 that comparable public companies are not identical to the (see note 2 in the generic notes) 2021 2020 investments being fair valued by the Fund. Series A Opening units 48 50 As at June 30, 2021, a 5% increase or decrease in the Issued number of units 6 1 fair valuations using significant unobservable inputs on Reinvested number of units – – Level 3 investments would have increased or decreased Redeemed number of units (11) (7) the Fund’s NAV, respectively, by approximately 0.0% Ending number of units 43 44 (December 31, 2020 – 0.0%). Advisor Series Opening units – 4 Management fees and administration fees Issued number of units – – (see note 8 in the generic notes) Reinvested number of units – – Redeemed number of units – – Management fees and administration fees of each series Ending number of units – 4 of the Fund are payable to RBC GAM and calculated at the Series D following annual percentages, before GST/HST, of the daily Opening units 2 488 2 649 NAV of each series of the Fund. Issued number of units 51 30 Reinvested number of units – – Redeemed number of units (153) (148) Ending number of units 2 386 2 531

Please see the generic notes at the back of the financial statements. NOTES TO FINANCIAL STATEMENTS – FUND SPECIFIC INFORMATION (unaudited) PHILLIPS, HAGER & NORTH CANADIAN GROWTH FUND

June 30, 2021

For the periods ended June 30 Investments by other related investment funds (%) (see note 2 in the generic notes) 2021 2020 (see note 8 in the generic notes) Series F Opening units 69 72 The table below summarizes, as a percentage, the NAV of the Issued number of units 15 6 Fund owned by other related investment funds as at: Reinvested number of units – – June 30 December 31 Redeemed number of units (9) (11) 2021 2020 Ending number of units 75 67 RBC Retirement 2025 Portfolio – 0.1 Series O RBC Retirement 2030 Portfolio 0.2 0.3 Opening units 14 716 16 637 RBC Retirement 2035 Portfolio 0.5 0.4 Issued number of units 166 329 RBC Retirement 2040 Portfolio 0.5 0.4 Reinvested number of units – – RBC Retirement 2045 Portfolio 0.6 0.5 Redeemed number of units (1 033) (1 520) RBC Retirement 2050 Portfolio 0.6 0.6 Ending number of units 13 849 15 446 RBC Retirement 2055 Portfolio – – RBC Retirement 2060 Portfolio – – Transaction costs ($000s except %) RBC Select Aggressive Growth Portfolio 22.3 20.9 RBC Select Choices Transaction costs, including brokerage commissions, in Aggressive Growth Portfolio 1.4 1.4 consideration of portfolio transactions for the periods ended: RBC Select Choices Growth Portfolio 1.0 1.1 June 30 June 30 RBC Select Growth Portfolio 55.4 57.0 2021 2020 RBC Target 2030 Education Fund – – $ % $ % RBC Target 2035 Education Fund 1.9 1.9 Total transaction costs 54 100 123 100 Total 84.4 84.6 Related-party brokerage commissions* 7 13 11 9 † Commission arrangements 12 22 45 37 Offsetting financial assets and liabilities ($000s) * See note 8 in the generic notes. (see note 3 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 The following is a summary of the amounts for which execution goods and services. the Fund has a legal right to offset in the event of default, Securities lending revenue ($000s except %) insolvency or bankruptcy. “Net amount” represents the (see note 7 in the generic notes) impact to the Fund if all set-off rights were to be exercised.

Fair value of securities on loan and collateral received as at: June 30, 2021 Assets Liabilities

June 30 June 30 Gross amounts – assets (liabilities) 35 (277) 2021 2020 Amounts set-off in the Fair value of securities loaned 34 775 31 720 Statements of Financial Position – – Fair value of collateral received 35 471 32 355 Net amounts presented in the Statements of Financial Position 35 (277) The table below provides a reconciliation of the gross revenue Related amounts not set-off (21) 21 Collateral (received) pledged – – generated from the securities lending transactions of the Fund Net amount 14 (256) to the securities lending revenue disclosed in the Statements of Comprehensive Income. December 31, 2020 Assets Liabilities June 30 June 30 2021 2020 Gross amounts – assets (liabilities) 175 – $ % $ % Amounts set-off in the Gross revenue 32 100 169 100 Statements of Financial Position – – RBC IS (paid) (8) (25) (43) (25) Net amounts presented in the Tax withheld (2) (7) (32) (19) Statements of Financial Position 175 – Fund revenue 22 68 94 56 Related amounts not set-off – – Collateral (received) pledged – – Net amount 175 –

Please see the generic notes at the back of the financial statements. GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

1. The Funds Series I units have no sales charges, have lower fees than The Funds (“Fund” or “Funds”) are open-ended mutual Series F units, Series FT5 units and Series FT8 units and fund trusts governed by the laws of the Province of are only available to investors who invest and maintain or . RBC GAM is the manager and portfolio the required minimum balance and who have accounts manager of the Funds and its head office is located at with dealers who have signed a fee-based agreement with 155 Wellington Street West, 22nd Floor, Toronto, Ontario. RBC GAM. RBC GAM is also the trustee of those Funds governed by the Series N units are only available to related funds. laws of the Province of Ontario. These financial statements were approved for issuance by the Board of Directors of Series O units are only available to large private or RBC GAM on August 9, 2021. institutional investors or dealers. No management fees are payable by the Funds in respect to Series O units. The Funds may issue an unlimited number of units in some Unitholders pay a negotiated fee directly to RBC GAM for or all of Series A, Advisor Series, Advisor T5 Series, Series T5, investment-counselling services. Series T8, Series H, Series D, Series DZ, Series F, Series FT5, Series FT8, Series I, Series N and Series O. 2. Financial period

Advisor Series units and Advisor T5 Series units were The information provided in these financial statements and available to all investors through authorized dealers with an notes thereto is as at June 30, 2021 and December 31, 2020, as initial sales charge or low-load sales charge option. Effective applicable, and for the six-month periods ended June 30, 2021 August 4, 2020, such Advisor Series and Advisor T5 Series and June 30, 2020, as applicable, except for Funds or series were re-designated as Series A and Series T5, respectively. established during either period, in which case the information For certain of the Funds, Advisor Series units and Advisor T5 for the Fund, or series, is provided for the period from the start Series units are available with a deferred sales charge option. date as described in the Notes to Financial Statements – Fund Under the initial sales charge option, investors pay a sales Specific Information of the Fund. charge ranging from 0% to 5% of the amount invested. 3. Summary of significant accounting policies Under the deferred sales charge or low-load sales charge These financial statements have been prepared in accordance option, sales charges may be applicable, as described in the with International Financial Reporting Standards (“IFRS”) Simplified Prospectus. and in accordance with International Accounting Standard Series T5 units and Series T8 units have no sales charges and (“IAS”) 34 – Interim Financial Reporting, as issued by the are available to all investors through authorized dealers. International Accounting Standards Board (“IASB”). The significant accounting policies of the Funds are as follows: Series H units have no sales charges, have lower fees than Series A units and are only available to investors who invest Classification and Measurement of Financial Assets, and maintain the required minimum balance through Liabilities and Derivatives Each of the Funds classifies authorized dealers. its investment portfolio based on the business model for managing the portfolio and the contractual cash flow Series D units and Series DZ units have no sales charges characteristics. The investment portfolio of financial assets and have lower fees than Series A units. Series D units and and liabilities is managed and performance is evaluated on Series DZ units may be available to investors who have a fair value basis. The contractual cash flows of the Funds’ accounts with RBC Direct Investing Inc., Phillips, Hager & debt securities that are solely principal and interest are North Investment Funds Ltd. (“PH&N IF”) or certain other neither held for the purpose of collecting contractual cash authorized dealers (primarily discount brokers). flows nor held both for collecting contractual cash flows Series F units, Series FT5 units and Series FT8 units have no and for sale. The collection of contractual cash flows is only sales charges and have lower fees than Series A units. Series F incidental to achieving the Funds’ business model objectives. units, Series FT5 units and Series FT8 units are only available Consequently, all investments are measured at fair value to investors who have fee-based accounts with their dealer. through profit and loss (“FVTPL”). Derivative assets and liabilities are also measured at FVTPL. GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

The Funds’ obligation for net assets attributable to holders The Funds do not consolidate their investment in underlying of redeemable units represents a financial liability and is funds but account for these investments at fair value. The measured at the redemption amount, which approximates manager has determined that the Funds are investment fair value as of the reporting date. All other financial assets entities in accordance with IFRS 10 Consolidated Financial and liabilities are measured at amortized cost. Statements, since the Funds meet the following criteria:

Offsetting Financial Assets and Liabilities In the normal (i) The Funds obtain capital from one or more investors for course of business, the Funds may enter into various the purpose of providing those investors with investment International Swaps and Derivatives Association master management services, netting agreements or other similar arrangements with (ii) The Funds commit to their investors that their business certain counterparties that allow for related amounts to purpose is to invest funds solely for the returns from be offset in certain circumstances, such as bankruptcy or capital appreciation, investment income or both, and termination of contracts. Offsetting information, where applicable, is presented in the Notes to Financial (iii) The Funds measure and evaluate the performance of Statements – Fund Specific Information. substantially all of their investments on a fair value basis.

Classification of Redeemable Units The Funds have multiple Therefore, the fair value of investments in the underlying features across the different series of the Funds. Consequently, funds is included in the Schedule of Investment Portfolio the Funds’ outstanding redeemable units are classified as and included in “Investments at fair value” in the Funds’ financial liabilities in accordance with the requirements of Statements of Financial Position. The change in fair value IAS 32 Financial Instruments: Presentation. of the investment held in the underlying funds is included in “Change in unrealized gain (loss) on investments” in the Unconsolidated Structured Entities The Funds may invest in Statements of Comprehensive Income. other Funds and exchange-traded funds (“ETFs”) managed by the manager or an affiliate of the manager (“sponsored Certain Funds may invest in mortgage-related or other funds”) and may invest in other funds and ETFs managed asset-backed securities. These securities include commercial by unaffiliated entities (“unsponsored funds”); collectively, mortgage-backed securities, asset-backed securities, “underlying funds.” The underlying funds are determined to collateralized debt obligations and other securities that be unconsolidated structured entities, as decision making directly or indirectly represent a participation in, or are in the underlying fund is not governed by the voting rights securitized by and payable from, mortgage loans on real or other similar rights held by the Fund. The investments property. Mortgage-related securities are created from in underlying funds are subject to the terms and conditions pools of residential or commercial mortgage loans while of the offering documents of the respective underlying asset-backed securities are created from many types of funds and are susceptible to market price risk arising from assets, including auto loans, credit card receivables, home uncertainties about future values of those underlying funds. equity loans and student loans. The Funds account for these The underlying funds’ objectives are generally to achieve investments at fair value. The fair value of such securities, as long-term capital appreciation and/or current income by disclosed in the Schedule of Investment Portfolio, represents investing in a portfolio of securities and other funds in line the maximum exposure to losses at that date. with each of their documented investment strategies. The Determination of Fair Value The fair value of a financial underlying funds apply various investment strategies to instrument is the amount at which the financial instrument accomplish their respective investment objectives. could be exchanged in an arm’s-length transaction between The underlying funds finance their operations by issuing knowledgeable and willing parties under no compulsion to redeemable units which are puttable at the unitholder’s act. In determining fair value, a three-tier hierarchy based on option, and entitle the unitholder to a proportional stake in inputs is used to value the Funds’ financial instruments. the respective underlying funds’ NAV. The hierarchy of inputs is summarized below: GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

Level 1 – quoted prices (unadjusted) in active markets for Options purchased and options written (sold) are recorded identical assets or liabilities; as investments in the Statements of Financial Position. These investments are reported at fair value in the Statements of Level 2 – inputs other than quoted prices included in Financial Position, and unrealized gain or loss at the close Level 1 that are observable for the asset or liability, either of business on each valuation date is recorded in “Change in directly (i.e., as prices) or indirectly (i.e., derived from prices), unrealized gain (loss) on investments” in the Statements of including broker quotes, vendor prices and vendor fair value Comprehensive Income. factors; and When an option is exercised and the underlying securities Level 3 – inputs for the asset or liability that are not based on are acquired or delivered, the acquisition cost or sale observable market data (unobservable inputs). proceeds are adjusted by the amount of the premium. Changes in valuation methods may result in transfers into or When an option is closed the Fund will realize a gain or out of an investment’s assigned level. loss equal to the difference between the premium and the cost to close the position. When an option expires, gains or The three-tier hierarchy of investments and derivatives is losses are realized equivalent to the amount of premiums included in Notes to Financial Statements – Fund Specific received or paid, respectively. The net realized gains (losses) Information. on written and purchased options are included in the Investments and derivatives are recorded at fair value, which Statements of Comprehensive Income in “Net realized gain is determined as follows: (loss) on investments.”

Equities – Common shares and preferred shares are valued at Warrants – Warrants are valued using a recognized option the closing price recorded by the security exchange on which pricing model, which includes factors such as the terms of the security is principally traded. In circumstances where the the warrant, time value of money and volatility inputs that are closing price is not within the bid-ask spread, management will significant to such valuation. determine the points within the bid-ask spread that are most Forward Contracts – Forward contracts are valued at the gain or representative of the fair value. loss that would arise as a result of closing the position at the Fixed-Income and Debt Securities – Bonds, mortgage-backed valuation date. The receivable/payable on forward contracts securities, loans, debentures and other debt securities are is recorded separately in the Statements of Financial Position. valued at the mid price quoted by major dealers or independent Any unrealized gain or loss at the close of business on each valuation date is recorded as “Change in unrealized gain (loss) pricing vendors in such securities. on investments” and realized gain or loss on foreign exchange NHA-approved mortgages are valued at an amount, which contracts is included in “Derivative income” in the Statements produces a yield equivalent to the prevailing rate of return on of Comprehensive Income. mortgages of similar type and term. Total Return Swaps – A total return swap is an agreement by Short-Term Investments – Short-term investments are valued at which one party makes payments based on a set rate, either cost plus accrued interest, which approximates fair value. fixed or variable, while the other party makes payments based Options – Options give the purchaser the right, but not the on the return of an underlying asset, which includes both the obligation, to buy (call) or sell (put) an underlying security income it generates and any capital gains. Total return swap or financial instrument at an agreed exercise or strike price contracts are marked to market daily based upon quotations during the specified period or on a specified date. from the market makers and the change in value, if any, is recorded in “Change in unrealized gain (loss) on investments” Listed options are valued at the closing price on the recognized in the Statements of Comprehensive Income. When the swap exchange on which the option is traded. In circumstances contract is terminated early, the Fund records a realized where the closing price is not within the bid-ask spread, gain or loss equal to the difference between the current net management will determine the points within the present value and the executed net present value in “Derivative bid-ask spread that are most representative of the fair value. income” in the Statements of Comprehensive Income. GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

Unrealized gains and losses are recorded as “Receivable on to determine the fair value of foreign securities traded in open swap contracts” or “Payable on open swap contracts” countries outside of North America daily to avoid stale prices in the Statements of Financial Position, as applicable. The and to take into account, among other things, any significant risks of total return swap contracts include changes in market events occurring after the close of a foreign market. conditions and the possible inability of the counterparty to Management also has procedures where the Funds primarily fulfill its obligations under the agreement. employ a market-based approach, which may use related Futures Contracts – Futures contracts entered into by the or comparable assets or liabilities, NAV per unit (for Funds are financial agreements to purchase or sell a financial exchange-traded funds), recent transactions, market instrument at a contracted price on a specified future date. multiples, book values and other relevant information for However, the Funds do not intend to purchase or sell the the investment to determine its fair value. The Funds may financial instrument on the settlement date; rather, they also use an income-based valuation approach in which intend to close out each futures contract before settlement the anticipated future cash flows of the investment are by entering into equal, but offsetting, futures contracts. discounted to calculate fair value. Discounts may also be Futures contracts are valued at the gain or loss that would applied due to the nature or duration of any restrictions arise as a result of closing the position at the valuation date. on the disposition of the investments, but only if they arise Any gain or loss at the close of business on each valuation as a feature of the instrument itself. Due to the inherent date is recorded as “Derivative income” in the Statements uncertainty of valuations of such investments, the fair values of Comprehensive Income. The receivable/payable on may differ significantly from the values that would have been futures contracts is recorded separately in the Statements of used had an active market existed. Financial Position. All security valuation techniques are periodically reviewed Credit Default Swap Contracts – Credit default swaps are by the Valuation Committee (“VC”) of the manager and are agreements between a protection buyer and protection approved by the manager. The VC provides oversight of the seller. The protection buyer pays a periodic fee in exchange Funds’ valuation policies and procedures. for a payment by the protection seller contingent on the Cash Cash is comprised of cash and deposits with banks and occurrence of a credit event, such as a default, bankruptcy is recorded at amortized cost. The carrying amount of cash or restructuring, with respect to a referenced entity. approximates its fair value because it is short term in nature. Periodic fees paid or received are recorded as “Interest for distribution purposes” in the Statements of Comprehensive Margin Margin accounts represent margin deposits held with Income. When the contract is terminated or expires, the brokers in respect of derivatives contracts. payments received or paid are recorded as “Derivative Functional Currency The Funds, with the exceptions below, income” in the Statements of Comprehensive Income. have their subscriptions, redemptions and performance Credit default swap contracts are valued based on quotations denominated in Canadian dollars and, consequently, the from independent sources. Canadian dollar is the functional currency for the Funds. Underlying Funds – Underlying funds that are not exchange- Phillips, Hager & North $U.S. Money Market Fund, traded funds are valued at their respective NAV per unit RBC $U.S. Money Market Fund, RBC Premium $U.S. Money from fund companies on the relevant valuation dates and Market Fund, RBC $U.S. Short-Term Government Bond Fund, underlying funds that are exchange-traded funds are valued RBC $U.S. Short-Term Corporate Bond Fund, RBC $U.S. at market close on the relevant valuation dates. Global Bond Fund, RBC $U.S. Investment Grade Corporate Bond Fund, RBC $U.S. High Yield Bond Fund, RBC $U.S. Fair Valuation of Investments – The Funds have procedures Strategic Income Bond Fund, BlueBay $U.S. Global Investment to determine the fair value of securities and other financial Grade Corporate Bond Fund (Canada), BlueBay $U.S. Global instruments for which market prices are not readily available High Yield Bond Fund (Canada), BlueBay Emerging Markets or which may not be reliably priced. Procedures are in place Bond Fund (Canada), BlueBay Emerging Markets Local Currency Bond Fund (Canada), BlueBay Emerging Markets Corporate Bond Fund, RBC $U.S. Core Bond Pool, RBC $U.S. Core Plus Bond Pool, RBC U.S. Monthly Income Fund GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021 and RBC $U.S. Global Balanced Portfolio (collectively, the Increase (Decrease) in NAV per Unit Increase (decrease) in “USD Funds”) have their subscriptions, redemptions and NAV per unit in the Statements of Comprehensive Income performance denominated in U.S. dollars and, consequently, represents the increase (decrease) in net assets attributable to the U.S. dollar is the functional currency for these Funds. holders of redeemable units by series, divided by the average units outstanding per series during the period. Foreign Exchange The value of investments and other assets and liabilities in foreign currencies is translated Early Redemption Fees Early redemption fees (short-term into Canadian dollars (U.S. dollars in the case of the USD trading fees) are paid directly to a Fund and are designed Funds) at the rate of exchange on each valuation date. to deter excessive trading and its associated costs. With the Gains/losses on foreign cash balances are included in “Net exception of money market funds, a Fund may apply a fee gain (loss) on foreign cash balances” in the Statements of of 2% of the current value of units if the unitholder redeems Comprehensive Income. Purchases and sales of investments, or switches out units within seven days of purchasing income and expenses are translated at the rate of exchange or previously switching into a Fund. These amounts are prevailing on the respective dates of such transactions. included in the Statements of Changes in NAV. Realized foreign exchange gains/losses on spot and forward Foreign Currencies The following is a list of abbreviations currency contracts are included in “Derivative income” in the used in the Schedule of Investment Portfolio: Statements of Comprehensive Income. AUD – Australian dollar KZT – tenge Valuation of Series A different NAV is calculated for each BRL – Brazilian real MXN – Mexican peso series of units of a Fund. The NAV of a particular series of CAD – Canadian dollar MYR – Malaysian ringgit units is computed by calculating the value of the series’ CHF – Swiss franc NOK – Norwegian krone CLP – Chilean peso NZD – New Zealand dollar proportionate share of the assets and liabilities of the Fund CNH/CNY – Chinese renminbi PEN – Peruvian nuevo sol common to all series less the liabilities of the Fund attributable COP – Colombian peso PHP – Philippine peso only to that series. Expenses directly attributable to a series CZK – Czech koruna PLN – Polish zloty DKK – Danish krone RON – Romanian leu are charged to that series. Other expenses are allocated DOP – Dominican peso RUB – Russian ruble proportionately to each series based upon the relative NAV of EUR – Euro SEK – Swedish krona each series. Expenses are accrued daily. GBP – Pound sterling SGD – Singapore dollar HKD – Hong Kong dollar THB – Thailand baht Investment Transactions Investment transactions are HUF – Hungarian forint TRY – Turkish new lira accounted for as of the trade date. Transaction costs, such as IDR – Indonesian rupiah TWD – New Taiwan dollar ILS – Israeli new shekel USD – United States dollar brokerage commissions, incurred by the Funds are recorded INR – Indian rupee UYU – Uruguay peso in the Statements of Comprehensive Income for the period. JPY – Japanese yen ZAR – South African rand The unrealized gain and loss on investments is the difference KRW – South Korean won between fair value and average cost for the period. The basis 4. Critical accounting judgments and estimates of determining the cost of portfolio assets, and realized and unrealized gains and losses on investments, is average The preparation of financial statements requires the use cost which does not include amortization of premiums or of judgment in applying the Funds’ accounting policies discounts on fixed-income and debt securities with the and making estimates and assumptions about the future. exception of zero coupon bonds. The following discusses the most significant accounting judgments and estimates that management has made in Income Recognition Dividend income is recognized on the preparing the financial statements. ex-dividend date and interest for distribution purposes is coupon interest recognized on an accrual basis and/or Fair value measurement of securities not quoted in an active market imputed interest on zero coupon bonds. “Income from The Funds have established policies and control procedures investment trusts” includes income from underlying funds that are intended to ensure these estimates are well and other trusts. Any premiums paid or discounts received controlled, independently reviewed and consistently applied on the purchase of zero coupon bonds are amortized. Interest from period to period. The estimates of the value of the payments made by the Funds to counterparties on the Funds’ assets and liabilities are believed to be appropriate as payable leg of derivative contracts are recorded as “Interest at the reporting date. expense” in the Statements of Comprehensive Income. GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

The Funds may hold financial instruments that are not quoted Credit risk in active markets. Note 3 discusses the policies used by Credit risk is the risk that a loss could arise from a security management for the estimates used in determining fair value. issuer or counterparty not being able to meet its financial obligations. The carrying amount of investments and other 5. Financial instrument risk and capital management assets represents the maximum credit risk exposure as RBC GAM is responsible for managing each Fund’s disclosed in a Fund’s Statements of Financial Position. The capital, which is its NAV and consists primarily of Funds measure credit risk and expected credit losses using its financial instruments. probability of default, exposure at default and loss given A Fund’s investment activities expose it to a variety of default. Management considers both historical analysis and financial risks. RBC GAM seeks to minimize potential adverse forward-looking information in determining any expected effects of these risks on a Fund’s performance by employing credit loss. All other receivables, amounts due from brokers, professional, experienced portfolio managers, daily monitoring cash and short-term deposits are held with counterparties of the Fund’s holdings and market events, diversifying its with a credit rating of AA/Aa or higher. Management investment portfolio within the constraints of its investment considers the probability of default to be close to zero as objectives and, in some cases, periodically hedging certain risk the counterparties have a strong capacity to meet their exposures through the use of derivatives. To assist in managing contractual obligations in the near term. As a result, no risks, RBC GAM also uses internal guidelines, maintains a loss allowance has been recognized based on 12-month governance structure that oversees each Fund’s investment expected credit losses as any such impairment would be activities and monitors compliance with the Fund’s investment wholly insignificant to the Funds. The fair value of fixed- strategies, internal guidelines and securities regulations. income and debt securities includes a consideration of the creditworthiness of the debt issuer. Credit risk exposure The financial markets experienced significant volatility to over-the-counter derivative instruments is based on a as a result of the developing COVID‑19 global pandemic. Fund’s unrealized gain on the contractual obligations with The effects of the pandemic and its impact on individual the counterparty. Credit risk exposure is mitigated for those companies, nations and the market in general can not Funds participating in a securities lending program (see necessarily be foreseen at the present time and may have an note 7). RBC GAM monitors each Fund’s credit exposure and adverse impact on the financial performance of the Funds. The counterparty ratings daily. impact of the pandemic may be short-term or may last for an extended period of time. Concentration risk Concentration risk arises as a result of net financial Financial instrument risk, as applicable to a Fund, is disclosed instrument exposures to the same category, such as in its Notes to Financial Statements – Fund Specific Information. geographical region, asset type, industry sector or market These risks include a Fund’s direct risks and pro rata exposure to segment. Financial instruments in the same category have the risks of underlying funds, as applicable. similar characteristics and may be affected similarly by Liquidity risk changes in economic or other conditions. Liquidity risk is the possibility that investments in a Fund Interest rate risk cannot be readily converted into cash when required. A Fund Interest rate risk is the risk that the fair value of a Fund’s is exposed to daily cash redemptions of redeemable units. interest-bearing investments will fluctuate due to changes Liquidity risk is managed by investing the majority of a Fund’s in market interest rates. The value of fixed-income and debt assets in investments that are traded in an active market and securities, such as bonds, debentures, mortgages or other that can be readily disposed. In accordance with securities income-producing securities, is affected by interest rates. regulations, a Fund must maintain at least 90% of its assets in Generally, the value of these securities increases if interest liquid investments. In addition, a Fund aims to retain sufficient rates fall and decreases if interest rates rise. 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. GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

Currency risk 7. Securities lending revenue Currency risk is the risk that the value of investments Certain of the Funds lend portfolio securities from time denominated in currencies, other than the functional to time in order to earn additional income. Income currency of a Fund, will fluctuate due to changes in foreign from securities lending is included in the Statements of exchange rates. The value of investments denominated in a Comprehensive Income of a Fund. Each such Fund will have currency other than the functional currency is affected by entered into a securities lending program with its custodian, changes in the value of the functional currency in relation RBC Investor Services Trust (“RBC IS”). The aggregate market to the value of the currency in which the investment is value of all securities loaned by a Fund cannot exceed 50% denominated. When the value of the functional currency falls of the assets of a Fund. The Fund receives collateral, with an in relation to foreign currencies, then the value of the foreign approved credit rating of at least A, of at least 102% of the investments rises. When the value of the functional currency value of securities on loan. The Fund is indemnified by RBC IS rises, the value of the foreign investments falls. The currency for any collateral credit or market loss. As such, the credit risk risk as disclosed in the Fund Specific Information in the associated with securities lending is considered minimal. Notes to Financial Statements represents the monetary and 8. Administrative and other non-monetary foreign exchange exposure of a Fund. related-party transactions Other price risk Manager and Portfolio Manager Other price risk is the risk that the value of financial RBC GAM is an indirect wholly owned subsidiary of instruments will fluctuate as a result of changes in market Royal Bank of Canada (“Royal Bank”). RBC GAM is the prices (other than those arising from interest rate or currency manager and portfolio manager of the Funds. RBC GAM is risk), whether caused by factors specific to an individual responsible for the Funds’ day-to-day operations, provides investment, its issuer, or all factors affecting all instruments investment advice and portfolio management services to the traded in a market or market segment. Funds and appoints distributors for the Funds. RBC GAM is paid a management fee by the Funds as compensation 6. Taxes for its services. The management fee is calculated and The Funds qualify as open-ended mutual fund trusts or unit accrued daily as a percentage of the NAV of each series trusts under the Income Tax Act (Canada). In general, the of units of the Funds. No management fees are paid by Funds are subject to income tax; however, no income tax the Funds with respect to Series O units. Unitholders of is payable on net income and/or net realized capital gains Series O units pay a negotiated fee directly to RBC GAM for which are distributed to unitholders. Since the Funds do investment-counselling services. not record income taxes, the tax benefit of capital and non-capital losses has not been reflected in the Statements The Funds pay a fixed administration fee to RBC GAM. The of Financial Position as a deferred income tax asset. In fixed administration fee is calculated and accrued daily as a addition, for mutual fund trusts, income taxes payable on percentage of the NAV of each series of units of the Funds. net realized capital gains are refundable on a formula basis RBC GAM in turn pays certain operating expenses of the when units of the Funds are redeemed. It is the intention of Funds. These expenses include regulatory filing fees and the Funds to pay out all net income and realized capital gains other day-to-day operating expenses including, but not each year so that the Funds will not be subject to income limited to, recordkeeping, accounting and fund valuation taxes. Accordingly, no provision for income taxes is recorded. costs, custody fees, audit and legal fees and the costs of preparing and distributing annual and interim reports, Capital losses are available to be carried forward indefinitely prospectuses, statements and investor communications. and applied against future capital gains. Non-capital losses may be carried forward to reduce future taxable income for Notwithstanding the fixed administration fee, the Funds up to 20 years. 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 GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021 not limited to, GST/HST). Effective January 1, 2020, RBC Sub-Advisors GAM, not the Funds, is responsible for the costs related to RBC Global Asset Management (U.S.) Inc. is the sub-advisor for: annual fees, meeting fees and reimbursement for expenses to RBC $U.S. Short-Term Government Bond Fund members of the Independent Review Committee. The Funds RBC $U.S. Short-Term Corporate Bond Fund will continue to be responsible for paying any Independent (for the underlying fund) Review Committee costs that are not related to annual fees, RBC Bond Fund (for a portion of the Fund) meeting fees and reimbursement for expenses to members RBC $U.S. Investment Grade Corporate Bond Fund of the Independent Review Committee. Other fund costs RBC Global Corporate Bond Fund (for a portion of the Fund) are allocated proportionately to each series based upon the RBC U.S. Monthly Income Fund (for a portion of the Fund) relative NAV of each series. RBC GAM may, in some years RBC U.S. Mid-Cap Growth Equity Fund and in certain cases, absorb a portion of operating expenses. RBC U.S. Mid-Cap Growth Equity Currency Neutral Fund The decision to absorb the operating expenses is reviewed RBC U.S. Mid-Cap Value Equity Fund annually and determined at the discretion of RBC GAM, RBC U.S. Small-Cap Core Equity Fund without notice to unitholders. RBC U.S. Small-Cap Value Equity Fund Certain Funds may invest in units of other Funds managed Phillips, Hager & North U.S. Multi-Style All-Cap Equity Fund by RBC GAM or its affiliates (“underlying funds”). A Fund will RBC Global Asset Management (UK) Limited is the not invest in units of an underlying fund if the Fund would be sub-advisor for: required to pay any management or incentive fees in respect RBC Short-Term Global Bond Fund (for a portion of the Fund) of that investment that a reasonable person would believe RBC Bond Fund (for a portion of the Fund) duplicates a fee payable by the underlying fund for the same RBC Global Bond Fund (for a portion of the Fund) service. To the extent a Fund invests in underlying funds RBC $U.S. Global Bond Fund (for a portion of the Fund) managed by RBC GAM or its affiliates, the fees and expenses RBC Global Corporate Bond Fund (for a portion of the Fund) payable by the underlying funds are in addition to the fees RBC Global High Yield Bond Fund (for a portion of the Fund) and expenses payable by the Fund. However, a Fund may RBC Emerging Markets Bond Fund (for a portion of the Fund) only invest in one or more underlying funds provided that no RBC U.S. Monthly Income Fund (for a portion of the Fund) management fees or incentive fees are payable that would RBC Balanced Fund (for a portion of the Fund) duplicate a fee payable by the underlying fund for the same RBC Global Balanced Fund (for a portion of the Fund) service. The Fund’s ownership interest in underlying funds RBC International Dividend Growth Fund is disclosed in the Notes to Financial Statements – Fund RBC International Equity Fund (for the European equity Specific Information. portion of the Fund) RBC GAM or its affiliates may earn fees and spreads in RBC International Equity Currency Neutral Fund (for the connection with various services provided to, or transactions European equity portion of the underlying fund) with, the Funds, such as banking, brokerage, securities RBC European Dividend Fund lending, foreign exchange and derivatives transactions. RBC European Equity Fund RBC GAM or its affiliates may earn a foreign exchange RBC European Mid-Cap Equity Fund spread when unitholders switch between series of funds RBC Emerging Markets Multi-Strategy Equity Fund denominated in different currencies. The Funds also (for the underlying funds) maintain bank accounts and overdraft provisions with Royal RBC Emerging Markets Dividend Fund Bank for which Royal Bank may earn a fee. Affiliates of RBC Emerging Markets Equity Fund RBC GAM that provide services to the Funds in the course RBC Emerging Markets Equity Focus Fund of their normal business, all of which are wholly owned RBC Emerging Markets Small-Cap Equity Fund subsidiaries of Royal Bank of Canada, are discussed below. RBC Global Dividend Growth Fund RBC Global Dividend Growth Currency Neutral Fund RBC Global Equity Fund RBC Global Equity Focus Fund RBC Global Equity Focus Currency Neutral Fund (for the underlying fund) GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

RBC Global Equity Leaders Fund Trustee RBC Vision Balanced Fund (for a portion of the Fund) RBC GAM is the trustee for the Funds governed by the laws RBC Vision Fossil Fuel Free Emerging Markets Equity Fund of the Province of Ontario. RBC IS is the trustee for the Funds RBC Vision Global Equity Fund governed by the laws of the Province of British Columbia. RBC Vision Fossil Fuel Free Global Equity Fund The trustee holds title to the Funds’ property on behalf of Phillips, Hager & North Overseas Equity Fund the unitholders. The trustee earns a fee, which is paid by the Phillips, Hager & North Global Equity Fund manager from the fixed administration fee paid by the Funds.

RBC Global Asset Management (Asia) Limited is the Distributors sub-advisor for: RBC GAM, Royal Mutual Funds Inc., RBC Direct Investing Inc., RBC Balanced Fund (for the Asian equity portion of the Fund) RBC Dominion Securities Inc. and PH&N IF are principal RBC Global Balanced Fund (for the Asian equity portion distributors of, or may distribute certain series of units of, the of the Fund) Funds. Dealers receive an ongoing commission based on RBC International Dividend Growth Fund (for the Asian the total value of their clients’ Series A, Advisor Series, equity portion of the Fund) Advisor T5 Series, Series T5, Series T8, Series H and RBC International Equity Fund (for the Asian equity Series D units. portion of the Fund) Custodian RBC International Equity Currency Neutral Fund (for the RBC IS is the custodian and holds the assets of the Funds. Asian equity portion of the underlying fund) RBC IS earns a fee as the custodian, which is paid by the RBC Asian Equity Fund (for the underlying funds) manager from the fixed administration fee paid by the Funds. RBC Asia Pacific ex-Japan Equity Fund RBC China Equity Fund Registrars RBC Japanese Equity Fund RBC GAM, RBC IS or Royal Bank (or a combination thereof) RBC Vision Balanced Fund (for the Asian equity portion of are the registrars of the Funds and keep records of who owns the Fund) the units of the Funds. The registrars also process orders and BlueBay Asset Management LLP is the sub-advisor for: issue account statements. The registrars earn a fee, which is BlueBay Global Monthly Income Bond Fund paid by the manager from the fixed administration fee paid BlueBay Global Sovereign Bond Fund (Canada) by the Funds. BlueBay Global Investment Grade Corporate Bond Brokers and Dealers Fund (Canada) The Funds have established or may establish standard BlueBay $U.S. Global Investment Grade Corporate Bond brokerage agreements and dealing agreements at Fund (Canada) market rates with related parties such as RBC Dominion BlueBay European High Yield Bond Fund (Canada) Securities Inc., RBC Capital Markets, LLC, RBC Europe BlueBay Global High Yield Bond Fund (Canada) Limited, NBC Securities Inc. and Royal Bank of Canada. BlueBay $U.S. Global High Yield Bond Fund (Canada) BlueBay Emerging Markets Bond Fund (Canada) Securities Lending Agent BlueBay Emerging Markets Local Currency Bond To the extent a Fund may engage in securities lending Fund (Canada) transactions, RBC IS may act as the Fund’s securities lending BlueBay Emerging Markets Corporate Bond Fund agent. Any revenue earned on such securities lending is split BlueBay Global Convertible Bond Fund (Canada) between the Fund and the securities lending agent. BlueBay Global Alternative Bond Fund (Canada) Other Related-Party Transactions The sub-advisors earn a fee which is calculated and accrued Pursuant to applicable securities legislation, the Funds daily as a percentage of the NAV of each series of units of the relied on the standing instructions from the Independent Funds. The sub-advisors are paid by the manager from the Review Committee with respect to one or more of the management fee paid by the Funds. following transactions: GENERIC NOTES TO FINANCIAL STATEMENTS (unaudited) (also see Fund Specific Information)

June 30, 2021

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.