UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21475
RBC Funds Trust
(Exact name of registrant as specified in charter)
50 South Sixth Street, Suite 2350
Minneapolis, MN 55402
(Address of principal executive offices) (Zip code)
Jay Jackson, Esq.
50 South Sixth Street, Suite 2350
Minneapolis, MN 55402
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612)-376-7132
Date of fiscal year end: March 31
Date of reporting period: March 31, 2017
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
RBC Funds | ||||||||||||
About Your Annual Report |
This annual report includes detailed information about your Fund including financial statements, performance, and a complete list of its holdings. The RBC Funds compare their performance against various equity indices. Each of these indices is a widely recognized measure of return for the underlying category of securities. However, the indices are unmanaged, do not include fees, and cannot be invested in directly.
We hope the financial information presented will help you evaluate your investment in the RBC Funds. We also encourage you to read your Fund’s prospectus for further detail as to your Fund’s investment policies and risk profile. RBC Funds prospectuses and performance information subsequent to the date of this report are available on our website at www.rbcgam.us.
A description of the policies and procedures that your Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-422-2766; (ii) on the Fund’s website at www.rbcgam.us; and (iii) on the Securities and Exchange Commission’s (the “Commission”) website at http://www.sec.gov.
Information regarding how your Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) on the Fund’s website at www.rbcgam.us; and (ii) on the Commission’s website at http://www.sec.gov.
A schedule of each Fund’s portfolio holdings will be filed with the Commission for the first and third quarters of each fiscal year on Form N-Q. This information is available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room is available by calling 1-800-SEC-0330.
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Table of | ||||||||||||
Contents | Letter from the Portfolio Manager of Emerging Market Equities | 1 | ||||||||||
Letter from the Portfolio Manager of Global Equities | 4 | |||||||||||
Portfolio Managers | 7 | |||||||||||
Performance Summary (Unaudited) | 8 | |||||||||||
Management Discussion and Analysis (Unaudited) | ||||||||||||
- RBC Emerging Markets Equity Fund | 10 | |||||||||||
- RBC Emerging Markets Small Cap Equity Fund | 12 | |||||||||||
- RBC Global Opportunities Fund | 14 | |||||||||||
- RBC International Opportunities Fund | 16 | |||||||||||
Schedules of Portfolio Investments | 18 | |||||||||||
Financial Statements | ||||||||||||
- Statements of Assets and Liabilities | 33 | |||||||||||
- Statements of Operations | 35 | |||||||||||
- Statements of Changes in Net Assets | 36 | |||||||||||
Financial Highlights | 40 | |||||||||||
Notes to Financial Statements | 49 | |||||||||||
Report of Independent Registered Public Accounting Firm | 63 | |||||||||||
Other Federal Income Tax Information (Unaudited) | 64 | |||||||||||
Management (Unaudited) | 66 | |||||||||||
Share Class Information (Unaudited) | 69 | |||||||||||
Supplemental Information (Unaudited)
| 70 |
1 |
LETTER FROM THE PORTFOLIO MANAGER OF EMERGING MARKET EQUITIES | ||||||||
Outlook
Looking ahead, we continue to believe that there are several positive factors which should continue to support EM performance over the medium term.
Firstly, there is a powerful argument that EM currencies can appreciate relative to developed market currencies, driven by cheap valuations, high real rates and strong current accounts. Secondly, both earnings and relative EM growth are improving from cyclically low levels driven by improved productivity and structural reforms. Thirdly, EM inflows have resumed after three years of strong outflows (2013-2015) and one year of flat net flows (2016). Finally, the valuation case for the asset class remains strong, particularly relative to developed markets, following the significant underperformance over the last six years.
Phil Langham
Senior Portfolio Manager, Emerging Market Equities
RBC Global Asset Management (UK) Limited
The information provided herein represents the opinions of the Fund Managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice.
Mutual fund investing involves risk. Principal loss is possible. The Funds invests in foreign securities, which involve greater volatility and political, economic, and currency risks, and differences in accounting methods. These risks may be greater in emerging markets. The Funds invest in small capitalization companies, which involve greater risks such as more volatility and less liquidity than larger companies. There is a possibility that issuers of securities in which the Funds may invest may default on the payment of interest or principal on the securities when due, which could cause the Funds to lose money. These risks are described more fully in the prospectus.
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2 |
LETTER FROM THE PORTFOLIO MANAGER OF EMERGING MARKET EQUITIES | ||||||
Earnings growth is not representative of the Fund’s future performance.
Comments relating to performance contributors and detractors exclude fair value adjustments, if any, made to Fund holdings.
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Current and future holdings are subject to risk. Please refer to the Schedule of Investments in this report for a complete list of Fund holdings. | ||||||
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3 |
Dear Shareholder:
Market Review
The year ended March 31, 2017 witnessed a number of significant macro-political events such as the UK’s Brexit vote and the U.S. Presidential election, which had a substantial effect on markets, or perhaps more correctly, amplified trends already being witnessed. It has been clear that the growth picture had been improving globally for some time, most markedly in the U.S., but also in Europe and in emerging markets (EM).
The election of U.S. President Trump in November with the promise of lower taxes, a financial reform agenda and sizeable infrastructure spending provided the necessary optimism to see the lowest-rated, cheapest names in the Financials, Energy and Materials sectors rally very strongly – even those not domiciled in the U.S. These were generally names that do not fit our investment criteria, being some of the poorest businesses in industries such as banking and mining where innovation and competitive advantage are hard to discern. That said, the market impact of this junk rally was large and not holding these names was detrimental to returns.
This rally had largely abated by period end with investors again turning their attention to company fundamentals and discerning between high and low quality franchises, however its impact on Fund returns must be acknowledged.
Portfolio Review – RBC Global Opportunities Fund
For the twelve-months ended March 31, 2017, the RBC Global Opportunities Fund (Class I) returned 12.58% versus the Fund’s benchmark, the MSCI All Country World Index, which returned 15.04% for the same period. Stock selection in the Financials and Information Technology sectors were the biggest detractors as, what we believe to be, the higher quality names we prefer underperformed their lower rated peers. Consumer Staples holdings were also a negative as the U.S. Federal Reserve’s tightening program and the emergence of growth saw many so called ‘bond proxies’ suffer.
The biggest detractor from returns was Denmark-based pharmaceutical Novo Nordisk, which experienced some issues with its U.S. strategy as well as some senior staff turnover. As a result, the Fund eliminated the position. Anglo-Irish gaming company Paddy Power was the second biggest detractor as the benefits to the consumer of the company’s combined offering with recent merger partner Betfair had yet to be reflected in results. U.S. relationship bank First Republic was the biggest positive, in our view this high quality franchise performed very strongly over the period. U.S. onshore oil company EOG Resources was the second largest contributor. In a period of volatility for oil prices the company’s flexibility and technology enabled it to act as a nimble marginal supplier.
Portfolio Review – RBC International Opportunities Fund
For the twelve-months ended March 31, 2017, the RBC International Opportunities Fund (Class I) returned 2.85% versus the Fund’s benchmark, the MSCI All Country World Index (ex USA), which returned 13.13% for the same period. Stock selection in the Financials and Materials sectors were the biggest detractors as, what we believe to be, our higher quality names we prefer underperformed their lower rated peers. Consumer Staples holdings were also a negative as the emergence of growth saw many so called ‘bond proxies’ suffer. Health Care allocations were also a negative.
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4 |
LETTER FROM THE PORTFOLIO MANAGER OF GLOBAL EQUITIES | ||||||
The biggest detractor from returns was Philippines domiciled manufacturer of snack foods, Universal Robina, whereby a 2016 product recall in new market Vietnam was still impacting results. Denmark pharmaceutical Novo Nordisk was the second largest detractor, the company experiencing some issues with its U.S. strategy as well as some senior staff turnover. Japanese manufacturer of precision motors, Nidec, was the largest contributor as the company continued to execute well, with Netherlands-based semi-conductor innovator, ASML, the second biggest contributor on continued strong demand from chipmakers for its technology.
Outlook
In a period where we have witnessed very strong total returns, it is not universally clear what has been driving this strong performance in equity markets. Certainly investors are anticipating good news ahead and there are some signs from the data that this may be justified. Clearly the growth outlook is improving, although we are unsure if this will be enough to sustain market returns at similar levels in coming quarters.
Why? There are some obvious roadblocks ahead: it is unlikely that the Trump administration will be able to legislate as radically or as quickly as initially thought; China has still to grapple with loose money supply and the ongoing property bubble; and Europe is veiled in political uncertainty with critical elections on the horizon in France and Germany alongside negotiations for the UK’s exit from the European Union.
As always the RBC Global Equity team attempts to navigate this uncertain backdrop by committing our clients’ capital only to those companies that we deem to be potential future success stories. We are constantly searching for compelling long-term opportunities at the right valuations whilst avoiding those businesses that we believe are overvalued or optically cheap but fundamentally flawed.
Habib Subjally
Senior Portfolio Manager, Global Equities
RBC Global Asset Management (UK) Limited
The information provided herein represents the opinions of the Fund Managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice.
Mutual fund investing involves risk. Principal loss is possible. The Funds invests in foreign securities, which involve greater volatility and political, economic, and currency risks, and differences in accounting methods. These risks may be greater in emerging markets. The Funds invest in small capitalization companies, which involve greater risks such as more volatility and less liquidity than larger companies. There is a possibility that issuers of securities in which the Funds may invest may default on the payment of interest or principal on the securities when due, which could cause the Funds to lose money. These risks are described more fully in the prospectus.
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5 |
LETTER FROM THE PORTFOLIO MANAGER OF GLOBAL EQUITIES | ||||||||
Earnings growth is not representative of the Fund’s future performance.
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Current and future holdings are subject to risk. Please refer to the Schedule of Investments in this report for a complete list of Fund holdings.
RBC Global Asset Management (U.S.) Inc. serves as investment advisor for RBC Funds. The Funds are sub-advised by RBC Global Asset Management (UK) Limited. The RBC Funds are distributed by Quasar Distributors, LLC, an affiliate of U.S. Bancorp Fund Services, LLC. | ||||||||
6 |
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)”) serves as the investment advisor and RBC Global Asset Management (UK) Limited (“RBC GAM (UK)”) serves as the investment sub-advisor to the Funds and is responsible for the overall management of the Funds’ portfolios. The individual primarily responsible for the day-to-day management of the Funds’ portfolios is set forth below.
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Philippe Langham
Senior Portfolio Manager and Head of Emerging Market Equities
Philippe Langham is Head of Emerging Market Equities at RBC GAM (UK) and is responsible for portfolio management of RBC Emerging Markets Equity Fund and RBC Emerging Markets Small Cap Equity Fund. Philippe joined RBC GAM (UK) in November 2009 from Societe Generale Asset Management, where he was Head of Global Emerging Markets. He was previously Director and Head of Emerging Markets and Asia at Credit Suisse in Zurich. Prior to that, he managed Global Emerging Markets, Asian, Latin American and U.S. portfolios for nine years at the Kuwait Investment Office. Philippe holds a BSc in economics from the University of Manchester in England and is a Chartered Accountant.
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Habib Subjally
Senior Portfolio Manager and Head of Global Equities
Habib Subjally is Head of Global Equities at RBC GAM (UK) and is responsible for portfolio management of RBC Global Opportunities Fund and RBC International Opportunities Fund. Prior to joining RBC GAM (UK) in 2014, Habib held various leadership and portfolio management positions at Credit Suisse, Invesco and Merrill Lynch Investment Managers, and also worked at Ernst & Young. He holds a BSc (Hons) from the London School of Economics and holds Chartered Accountant and ASIP designations. | ||||||
7 |
Net | Gross | ||||||||||||||||||||||||
Since | Expense | Expense | |||||||||||||||||||||||
1 Year | 3 Year | Inception(a) | Ratio(1)(2) | Ratio(1)(2) | |||||||||||||||||||||
Average Annual Total Returns as of March 31, 2017 (Unaudited) | |||||||||||||||||||||||||
RBC Emerging Markets Equity Fund | |||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||
- Including Maximum Sales Charge of 5.75% | 5.94 | % | 2.20 | % | 2.63 | % | |||||||||||||||||||
- At Net Asset Value | 12.42 | % | 4.23 | % | 4.50 | % | 0.98 | % | 1.80 | % | |||||||||||||||
Class I | 12.56 | % | 4.42 | % | 4.70 | % | 0.73 | % | 1.30 | % | |||||||||||||||
Class R6 | 12.65 | %(a) | 4.67 | %(a) | 4.97 | % | 0.73 | %(3) | 1.28 | %(3) | |||||||||||||||
MSCI Emerging Markets Net Index (b) | 17.22 | % | 1.18 | % | 1.40 | % | |||||||||||||||||||
RBC Emerging Markets Small Cap Equity Fund | |||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||
- Including Maximum Sales Charge of 5.75% | 6.73 | % | 0.23 | % | 1.32 | % | |||||||||||||||||||
- At Net Asset Value | 13.24 | % | 2.22 | % | 3.17 | % | 1.85 | % | 5.02 | % | |||||||||||||||
Class I | 13.53 | % | 2.50 | % | 3.43 | % | 1.60 | % | 4.76 | % | |||||||||||||||
MSCI Emerging Markets Small Cap Net Index (b) | 14.49 | % | 1.66 | % | 3.28 | % | |||||||||||||||||||
RBC Global Opportunities Fund | |||||||||||||||||||||||||
Class I | 12.58 | % | N/A | 6.35 | % | 1.05 | % | 3.26 | % | ||||||||||||||||
Class R6 | 12.59 | %(a) | N/A | 6.38 | % | 1.00 | %(3) | 77.25 | %(3) | ||||||||||||||||
MSCI ACWI Index (b) | 15.04 | % | N/A | 4.44 | % | ||||||||||||||||||||
RBC International Opportunities Fund | |||||||||||||||||||||||||
Class I | 2.85 | % | N/A | -0.33 | % | 1.00 | % | 1.84 | % | ||||||||||||||||
Class R6 | 2.93 | %(a) | N/A | -0.27 | % | 0.95 | %(3) | 77.08 | %(3) | ||||||||||||||||
MSCI ACWI ex US Index (b) | 13.13 | % | N/A | 1.36 | % |
Performance data quoted represents past performance. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance quoted. Performance shown reflects contractual fee waivers, without such fee waivers total returns would be reduced. Performance information does not reflect the 2% fee on shares redeemed or exchanged within 30 days of purchase. If such redemption fee was included, performance would be reduced. For performance data current to the most recent month-end go to www.rbcgam.us.
8 |
PERFORMANCE SUMMARY |
(1) | The Funds’ expenses reflect actual expenses for the most recent fiscal year ended March 31, 2017, except for RBC Emerging Markets Equity Fund, RBC Global Opportunities Fund and RBC International Opportunities Fund Class R6, which is for the period November 22, 2016 (commencement of operations) to March 31, 2017. |
(2) | The Advisor has contractually agreed to waive fees and/or make payments in order to keep total operating expenses of the Fund to the levels listed under net expense ratio until July 31, 2018 (December 31, 2017 for RBC Emerging Markets Equity Fund). |
(3) | Annualized. |
(a) | The since inception date (commencement of operations) is December 20, 2013 for RBC Emerging Markets Equity Fund and RBC Emerging Markets Small Cap Equity Fund for Class A and Class I shares and November 22, 2016 for Class R6 shares and December 3, 2014 for RBC Global Opportunities Fund and RBC International Opportunities Fund for Class I shares and November 22, 2016 for Class R6 shares. The performance in the table for Class R6 shares prior to November 22, 2016 reflects the performance of the Class I shares since the Fund’s inception, adjusted to reflect the fees and expenses of Class R6 shares. |
(b) | Each of the comparative indices is a widely recognized market value weighted measure of the return of securities, but do not include sales fees or operating expenses. You cannot invest directly in indices. |
The MSCI Emerging Markets Net Index is a free float-adjusted market capitalization index that is designed to measure equity performance of emerging markets.
The MSCI Emerging Markets Small Cap Net Index includes small cap representation across 21 emerging markets countries. The index covers approximately 14% of the free float-adjusted market capitalization in each country.
The MSCI All Country World (“ACWI”) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.
The MSCI All Country World (“ACWI”) ex US Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the US.
9 |
10 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||
RBC Emerging Markets Equity Fund
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Long-term growth of capital. |
Investment
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MSCI Emerging Markets Net Index |
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Benchmark
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Asset Allocation as of 3/31/17 (% of Fund’s investments) & Top Five Industries as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 5.57% of investments. | ||||||||||||||||||||||||||||
Housing Development Finance Corp. Ltd. | 4.82 | % | Unilever Plc | 3.14 | % | Top Ten Holdings (excluding investment companies) as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||
Naspers Ltd. - N Shares | 4.22 | % | Antofagasta Plc | 2.92 | % | |||||||||||||||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.02 | % | Banco Bradesco SA ADR | 2.85 | % | |||||||||||||||||||||||
AIA Group Ltd. | 3.30 | % | Samsung Electronics Co. Ltd., Preferred | 2.79 | % | |||||||||||||||||||||||
Dr. Reddy’s Laboratories Ltd. ADR | 3.19 | % | SM Investments Corp. | 2.77 | % | |||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 18. |
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Growth of $250,000 Initial Investment Since Inception (12/20/13) | ||||||||||||||||||||||||||
The graph reflects an initial investment of $250,000 over the period from December 20, 2013 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. Performance of other classes will vary due to differences in fee structures.
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11 |
12 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||
RBC Emerging Markets Small Cap Equity Fund
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Long-term growth of capital.
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Investment
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MSCI Emerging Markets Small Cap Net Index
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| Benchmark
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Asset Allocation as of 3/31/17 (% of Fund’s investments) & Top Five Industries as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 1.15% of investments. | ||||||||||||||||||||||||||||
Delta Electronics Thailand Public Co. Ltd. - FOR | 3.69 | % | Godrej Industries Ltd. | 2.93 | % | Top Ten Holdings (excluding investment companies) as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||
Tube Investments of India Ltd. | 3.50 | % | MC Group Public Co. Ltd. - FOR | 2.84 | % | |||||||||||||||||||||||
Marico Ltd. | 3.20 | % | Samsonite International SA | 2.77 | % | |||||||||||||||||||||||
Aeon Thana Sinsap Thailand Public Co. Ltd. NVDR | 3.05 | % | DGB Financial Group, Inc. | 2.77 | % | |||||||||||||||||||||||
Indraprastha Gas Ltd. | 3.02 | % | Standard Foods Corp. | 2.69 | % | |||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 22. |
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Growth of $250,000 Initial Investment Since Inception (12/20/13) | ||||||||||||||||||||||||||
The graph reflects an initial investment of $250,000 over the period from December 20, 2013 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return, while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. Performance of other classes will vary due to differences in fee structures.
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13 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||
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Investment Strategy | Seeks to provide long-term capital growth by primarily investing in equity securities of issuers located throughout the world, including both developed and emerging markets.
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Performance |
For the twelve-month period ended March 31, 2017, the Fund had an annualized total return of 12.58% (Class I). That compares to an annualized total return of 15.04% for the MSCI All Country World Index, the Fund’s primary benchmark.
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Factors That Made Positive Contributions |
Overall stock selection in the Industrials sector was positive. At a Fund level, stocks that contributed most strongly were:
● U.S. relationship bank, First Republic Bank, the biggest positive, with its high quality franchise performing very strongly over the period.
● U.S. onshore oil company, EOG Resources, Inc., was the second largest contributor. In a period of volatility for oil prices the company’s flexibility and technology enabled it to act as a nimble marginal supplier.
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Factors That Detracted From Relative Returns |
Stock selection in the Financials and Information Technology sectors were the biggest detractors, and Consumer Staples holdings were also a negative. In terms of specific stocks:
● Denmark-based pharmaceutical Novo Nordisk experienced some issues with its U.S. strategy as well as some senior staff turnover. The position has since been eliminated.
● Anglo-Irish gaming company, Paddy Power Betfair Plc, also detracted as the benefits to the consumer from the company’s combined offering with recent merger partner Betfair had yet to be reflected in results.
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Mutual fund investing involves risk. Principal loss is possible. The Fund invests in foreign securities, which involve greater volatility and political, economic, and currency risks, and differences in accounting methods. These risks may be greater in emerging markets. The Fund may focus its investments in a region or small group of countries. As a result, the Fund’s performance may be subject to greater volatility than a more geographically diversified fund. The Fund invests in small capitalization companies, which involve greater risks such as more volatility and less liquidity than larger companies. There is a possibility that issuers of securities in which the Fund may invest may default on the payment of interest or principal on the securities when due, which could cause the Fund to lose money. These risks are described more fully in the prospectus. | ||||||||||||
14 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||
RBC Global Opportunities Fund
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Long-term growth of capital. |
Investment | |||||||||||||||||||||||||||||||
MSCI ACWI Index
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| Benchmark | ||||||||||||||||||||||||||||||
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Asset Allocation as of 3/31/17 (% of Fund’s investments) & Top Five Industries as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 1.15% of investments. | ||||||||||||||||||||||||||||||||
HDFC Bank Ltd. ADR First Republic Bank Estee Lauder Cos., Inc. (The), Class A Fortive Corp. EOG Resources, Inc. |
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4.23 3.96 3.83 3.77 3.70 |
% % % % % |
UnitedHealth Group, Inc. Intuit, Inc. TJX Cos., Inc. (The) Activision Blizzard, Inc. Blackstone Group LP (The) - MLP |
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3.69 3.69 3.56 3.44 3.42 |
% % % % % | Top Ten Holdings (excluding investment companies) as of 3/31/17 (% of Fund’s net assets) | ||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 27. |
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Growth of $250,000 Initial Investment Since Inception (12/3/14) | ||||||||||||||||||||||||||||||
The graph reflects an initial investment of $250,000 over the period from December 3, 2014 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. Performance of other classes will vary due to differences in fee structures.
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15 |
16 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||
RBC International Opportunities Fund | ||||||||||||||
Long-term growth of capital.
| Investment Objective | |||||||||||||
MSCI ACWI ex US Index
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Benchmark | |||||||||||||
\
| Asset Allocation as of 3/31/17 (% of Fund’s investments) & Top Five Industries as of 3/31/17 (% of Fund’s net assets) | |||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 2.22% of investments. | ||||||||||||||
HDFC Bank Ltd. ADR | 4.69% | Naspers Ltd., N Shares | 4.31% | Top Ten Holdings (excluding investment companies) as of 3/31/17 (% of Fund’s net assets) | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 4.68% | ASML Holding NV | 4.09% | |||||||||||
Pernod Ricard SA | 4.48% | Anheuser-Busch InBev NV | 4.01% | |||||||||||
Deutsche Post AG | 4.48% | Safran SA | 3.85% | |||||||||||
Roche Holding AG | 4.45% | AIA Group Ltd. | 3.82% | |||||||||||
*A listing of all portfolio holdings can be found beginning on page 30. | ||||||||||||||
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Growth of $250,000 Initial Investment Since Inception (12/3/14) | |||||||||||||
The graph reflects an initial investment of $250,000 over the period from December 3, 2014 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return, while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. Performance of other classes will vary due to differences in fee structures.
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17 |
RBC Emerging Markets Equity Fund
March 31, 2017
Shares | Value | |||||
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Common Stocks — 90.67% | ||||||
Brazil — 6.38% | ||||||
703,000 | Banco Bradesco SA ADR | $ | 7,198,720 | |||
379,800 | Natura Cosmeticos SA | 3,535,224 | ||||
309,400 | TOTVS SA | 2,756,394 | ||||
470,300 | WEG SA | 2,616,951 | ||||
|
| |||||
16,107,289 | ||||||
|
| |||||
Chile — 4.67% | ||||||
706,273 | Antofagasta Plc | 7,373,927 | ||||
262,633 | Cia Cervecerias Unidas SA | 3,310,798 | ||||
413,690 | Quinenco SA | 1,086,455 | ||||
|
| |||||
11,771,180 | ||||||
|
| |||||
China — 17.81% | ||||||
1,320,000 | AIA Group Ltd. | 8,331,784 | ||||
51,150 | Alibaba Group Holding Ltd. ADR* | 5,515,505 | ||||
19,990 | Baidu, Inc. ADR* | 3,448,675 | ||||
1,122,600 | China Merchants Port Holdings Co. Ltd. | 3,288,147 | ||||
534,000 | China Mobile Ltd. | 5,872,667 | ||||
800,000 | China Resources Land Ltd. | 2,163,719 | ||||
1,606,613 | Fuyao Glass Industry Group Co. Ltd. - Series A | 5,271,892 | ||||
899,845 | Hangzhou Hikvision Digital Technology Co. Ltd. | 4,166,478 | ||||
1,282,700 | Samsonite International SA | 4,672,746 | ||||
969,923 | Weifu High-Technology Group Co. Ltd. - Series B | 2,209,824 | ||||
|
| |||||
44,941,437 | ||||||
|
| |||||
India — 12.95% | ||||||
142,906 | Cummins India Ltd. | 2,089,594 | ||||
200,400 | Dr. Reddy’s Laboratories Ltd. ADR | 8,046,060 | ||||
232,256 | HCL Technologies Ltd. | 3,128,591 | ||||
49,288 | Hero MotoCorp Ltd. | 2,445,829 | ||||
525,505 | Housing Development Finance Corp. Ltd. | 12,157,770 | ||||
304,900 | Infosys Ltd. ADR | 4,817,420 | ||||
|
| |||||
32,685,264 | ||||||
|
| |||||
Indonesia — 3.01% | ||||||
3,381,300 | Bank Central Asia Tbk PT | 4,198,388 | ||||
29,266,400 | Kalbe Farma Tbk PT | 3,382,184 | ||||
|
| |||||
7,580,572 | ||||||
|
| |||||
Jordan — 1.35% | ||||||
137,420 | Hikma Pharmaceuticals Plc | 3,413,402 | ||||
Korea — 7.09% | ||||||
11,072 | Amorepacific Corp. | 2,779,326 | ||||
262,015 | Hanon Systems | 2,175,820 |
18 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
| ||||||
2,576 | Samsung Electronics Co. Ltd. | $ | 4,740,910 | |||
8,313 | Samsung Fire & Marine Insurance Co. Ltd. | 1,993,079 | ||||
148,987 | Shinhan Financial Group Co. Ltd. | 6,207,854 | ||||
|
| |||||
17,896,989 | ||||||
|
| |||||
Malaysia — 1.18% | ||||||
632,400 | Axiata Group Berhad | 723,033 | ||||
500,000 | Public Bank Berhad | 2,247,742 | ||||
|
| |||||
2,970,775 | ||||||
|
| |||||
Mexico — 1.20% | ||||||
1,391,700 | Kimberly-Clark de Mexico SAB de CV - Series A | 3,021,678 | ||||
Nigeria — 0.31% | ||||||
9,689,440 | Guaranty Trust Bank Plc | 786,857 | ||||
Peru — 2.34% | ||||||
36,200 | Credicorp Ltd. | 5,911,460 | ||||
Philippines — 2.77% | ||||||
503,080 | SM Investments Corp. | 6,986,463 | ||||
Russia — 1.08% | ||||||
71,315 | Magnit OJSC GDR | 2,724,233 | ||||
South Africa — 10.40% | ||||||
512,994 | Clicks Group Ltd. | 4,887,046 | ||||
1,265,695 | FirstRand Ltd. | 4,379,406 | ||||
205,536 | Mondi Ltd. | 4,902,549 | ||||
118,767 | Mr. Price Group Ltd. | 1,413,708 | ||||
61,846 | Naspers Ltd. - N Shares | 10,656,828 | ||||
|
| |||||
26,239,537 | ||||||
|
| |||||
Taiwan — 9.38% | ||||||
488,000 | Giant Manufacturing Co. Ltd. | 2,887,950 | ||||
330,000 | MediaTek, Inc. | 2,338,301 | ||||
1,862,702 | Standard Foods Corp. | 4,628,936 | ||||
1,617,000 | Taiwan Semiconductor Manufacturing Co. Ltd. | 10,139,613 |
19 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
| ||||||
1,956,468 | Uni-President Enterprises Corp. | $ | 3,667,876 | |||
|
| |||||
23,662,676 | ||||||
|
| |||||
Thailand — 3.00% | ||||||
1,459,100 | Central Pattana Public Co. Ltd. - FOR | 2,409,965 | ||||
2,023,000 | Delta Electronics Public Co. Ltd. - FOR | 5,150,660 | ||||
|
| |||||
7,560,625 | ||||||
|
| |||||
Turkey — 1.75% | ||||||
2,637,041 | Enka Insaat ve Sanayi AS | 4,425,351 | ||||
United Arab Emirates — 0.86% | ||||||
3,000,019 | Emaar Malls PJSC | 2,158,668 | ||||
United Kingdom — 3.14% | ||||||
160,555 | Unilever Plc | 7,919,718 | ||||
|
| |||||
Total Common Stocks (Cost $208,222,101) | 228,764,174 | |||||
|
| |||||
Preferred Stocks — 3.64% | ||||||
Korea — 3.64% | ||||||
4,911 | Samsung Electronics Co. Ltd. | 7,034,468 | ||||
13,547 | Samsung Fire & Marine Insurance Co. Ltd. | 2,161,521 | ||||
|
| |||||
Total Preferred Stocks (Cost $7,326,402) | 9,195,989 | |||||
|
|
20 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
| ||||||
Investment Company — 5.56% |
| |||||
14,033,618 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | $ | 14,033,618 | |||
|
| |||||
Total Investment Company (Cost $14,033,618) | 14,033,618 | |||||
|
| |||||
Total Investments (Cost $229,582,121)(a) — 99.87% | $ | 251,993,781 | ||||
Other assets in excess of liabilities — 0.13% | 315,894 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 252,309,675 | ||||
|
|
* | Non-income producing security. |
(a) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Abbreviations used are defined below:
ADR - American Depositary Receipt
FOR - Foreign Ownership Restrictions
GDR - Global Depositary Receipt
Portfolio Diversification (Unaudited) | ||||
Industries | Percentage of Net Assets | |||
Financials | 22.03 | % | ||
Information Technology | 21.10 | % | ||
Consumer Staples | 14.46 | % | ||
Consumer Discretionary | 12.57 | % | ||
Industrials | 8.12 | % | ||
Health Care | 5.88 | % | ||
Materials | 4.87 | % | ||
Real Estate | 2.67 | % | ||
Telecom Services | 2.61 | % | ||
Other* | 5.69 | % | ||
|
| |||
100.00 | % | |||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions and accrued expenses payable. |
See Notes to Financial Statements.
21 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund
March 31, 2017
Shares | Value | |||||
| ||||||
Common Stocks — 95.05% |
| |||||
Brazil — 7.42% | ||||||
27,400 | Duratex SA | $ | 80,696 | |||
17,000 | Mahle-Metal Leve SA | 117,457 | ||||
9,000 | Natura Cosmeticos SA | 83,773 | ||||
6,600 | TOTVS SA | 58,798 | ||||
6,150 | Wilson Sons Ltd. BDR | 69,739 | ||||
|
| |||||
410,463 | ||||||
|
| |||||
Chile — 6.29% | ||||||
90,633 | Inversiones Aguas Metropolitanas SA | 142,774 | ||||
40,682 | Parque Arauco SA | 107,766 | ||||
56,508 | SONDA SA | 97,461 | ||||
|
| |||||
348,001 | ||||||
|
| |||||
China — 5.13% | ||||||
1,000 | Asia Satellite Telecommunications Holdings Ltd.* | 1,234 | ||||
230,000 | China Bluechemical Ltd., Class H | 74,070 | ||||
118,900 | Luthai Textile Co. Ltd., B Shares | 140,928 | ||||
34,000 | Vitasoy International Holdings Ltd. | 67,587 | ||||
|
| |||||
283,819 | ||||||
|
| |||||
Egypt — 1.60% | ||||||
7,553 | Edita Food Industries SAE GDR | 52,795 | ||||
11,333 | Integrated Diagnostics Holdings Plc(a) | 35,699 | ||||
|
| |||||
88,494 | ||||||
|
| |||||
Hong Kong — 2.93% | ||||||
18,000 | HKBN Ltd. | 20,101 | ||||
119,405 | Public Financial Holdings Ltd. | 55,168 | ||||
28,500 | Stella International Holdings Ltd. | 47,085 | ||||
137,000 | Tao Heung Holdings Ltd. | 39,663 | ||||
|
| |||||
162,017 | ||||||
|
| |||||
India — 20.44% | ||||||
4,005 | Bajaj Holdings & Investment Ltd. | 133,462 | ||||
8,431 | Cummins India Ltd. | 123,279 | ||||
2,688 | eClerx Services Ltd. | 58,365 | ||||
20,847 | Godrej Industries Ltd.* | 162,215 | ||||
10,691 | Indraprastha Gas Ltd. | 167,106 | ||||
38,993 | Marico Ltd. | 177,083 | ||||
4,637 | Sundaram Finance Ltd. | 115,312 | ||||
20,024 | Tube Investments of India Ltd. | 193,535 | ||||
|
| |||||
1,130,357 | ||||||
|
|
22 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
Indonesia — 4.57% | ||||||
2,092,300 | Ace Hardware Indonesia Tbk PT | $ | 129,493 | |||
326,500 | Acset Indonusa Tbk PT | 66,449 | ||||
698,100 | Selamat Sempurna Tbk PT | 56,839 | ||||
|
| |||||
252,781 | ||||||
|
| |||||
Korea — 7.49% | ||||||
422 | Cuckoo Electronics Co. Ltd. | 50,022 | ||||
15,808 | DGB Financial Group, Inc. | 153,250 | ||||
1,581 | Koh Young Technology, Inc. | 72,508 | ||||
6,850 | Macquarie Korea Infrastructure Fund | 50,962 | ||||
104 | Medy-Tox, Inc. | 43,057 | ||||
948 | Youngone Holdings Co. Ltd. | 44,549 | ||||
|
| |||||
414,348 | ||||||
|
| |||||
Malaysia — 1.93% | ||||||
110,700 | Bermaz Auto Berhad | 50,057 | ||||
14,800 | LPI Capital Berhad | 56,840 | ||||
|
| |||||
106,897 | ||||||
|
| |||||
Mexico — 3.18% | ||||||
60,800 | Corp. Inmobiliaria Vesta SAB de CV | 84,369 | ||||
44,100 | Grupo Herdez SAB de CV | 91,393 | ||||
|
| |||||
175,762 | ||||||
|
| |||||
Nigeria — 0.50% | ||||||
341,982 | Guaranty Trust Bank Plc | 27,772 | ||||
Philippines — 3.97% | ||||||
237,950 | Century Pacific Food, Inc. | 80,132 | ||||
34,700 | Security Bank Corp. | 139,677 | ||||
|
| |||||
219,809 | ||||||
|
| |||||
South Africa — 6.08% | ||||||
2,767 | Cashbuild Ltd. | 77,171 | ||||
7,166 | Clicks Group Ltd. | 68,267 | ||||
8,539 | Hyprop Investments Ltd. REIT | 77,996 | ||||
14,573 | Oceana Group Ltd. | 112,998 | ||||
|
| |||||
336,432 | ||||||
|
| |||||
Taiwan — 11.18% | ||||||
37,000 | Chroma ATE, Inc. | 112,072 | ||||
16,000 | Giant Manufacturing Co. Ltd. | 94,687 | ||||
5,000 | Ginko International Co. Ltd. | 45,806 | ||||
19,800 | Pacific Hospital Supply Co. Ltd. | 52,802 | ||||
2,500 | Poya International Co. Ltd. | 29,409 |
23 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
59,776 | Standard Foods Corp. | $ | 148,547 | |||
48,000 | Wistron NeWeb Corp. | 134,946 | ||||
|
| |||||
618,269 | ||||||
|
| |||||
Thailand — 9.57% | ||||||
56,200 | Aeon Thana Sinsap Thailand Public Co. Ltd. NVDR | 168,462 | ||||
80,100 | Delta Electronics Thailand Public Co. Ltd. - FOR | 203,939 | ||||
262,000 | MC Group Public Co. Ltd. - FOR | 157,039 | ||||
|
| |||||
529,440 | ||||||
|
| |||||
United States — 2.77% | ||||||
42,100 | Samsonite International SA | 153,366 | ||||
|
| |||||
Total Common Stocks (Cost $4,975,033) | 5,258,027 | |||||
|
| |||||
Equity Linked Securities — 2.56% | ||||||
Luxembourg — 2.56% | ||||||
105,195 | Aramex PJSC | 141,487 | ||||
|
| |||||
Total Equity Linked Securities (Cost $93,978) | 141,487 | |||||
|
| |||||
Preferred Stocks — 2.26% | ||||||
Korea — 2.26% | ||||||
835 | Amorepacific Corp. | 124,701 | ||||
Philippines — 0.00% | ||||||
58,000 | Security Bank Corp.(b) | 116 | ||||
|
| |||||
Total Preferred Stocks (Cost $60,306) | 124,817 | |||||
|
|
24 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2017
Shares | Value | |||||
Investment Company — 1.16% | ||||||
64,460 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | $ | 64,460 | |||
|
| |||||
Total Investment Company (Cost $64,460) | 64,460 | |||||
|
| |||||
Total Investments (Cost $5,193,777)(c) — 101.03% | $ | 5,588,791 | ||||
Liabilities in excess of other assets — (1.03)% | (56,970 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 5,531,821 | ||||
|
|
* | Non-income producing security. |
(a) | Security exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
(b) | The Pricing Committee has fair valued this security under procedures established by the Fund’s Board of Trustees. |
(c) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Abbreviations used are defined below:
BDR - Brazilian Depositary Receipt
FOR - Foreign Ownership Restrictions
GDR - Global Depositary Receipt
NVDR - Non-Voting Depository Receipt
REIT - Real Estate Investment Trust
25 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2017
Portfolio Diversification (Unaudited) | ||||
Industries | Percentage of Net Assets | |||
Consumer Discretionary | 24.97 | % | ||
Consumer Staples | 18.21 | % | ||
Financials | 16.29 | % | ||
Industrials | 10.93 | % | ||
Information Technology | 9.66 | % | ||
Materials | 5.73 | % | ||
Utilities | 5.60 | % | ||
Real Estate | 4.88 | % | ||
Health Care | 3.21 | % | ||
Telecom Services | 0.39 | % | ||
Other* | 0.13 | % | ||
|
| |||
100.00 | % | |||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to Financial Statements.
26 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund
March 31, 2017
Shares | Value | |||||
Common Stocks — 95.76% | ||||||
Belgium — 2.66% | ||||||
1,724 | Anheuser-Busch InBev NV | $ | 188,908 | |||
France — 2.69% | ||||||
1,619 | Pernod Ricard SA | 191,400 | ||||
Germany — 3.21% | ||||||
6,680 | Deutsche Post AG | 228,614 | ||||
Hong Kong — 1.06% | ||||||
12,000 | AIA Group Ltd. | 75,744 | ||||
India — 4.23% | ||||||
4,000 | HDFC Bank Ltd. ADR | 300,880 | ||||
Ireland — 2.26% | ||||||
1,490 | Paddy Power Betfair Plc | 160,653 | ||||
Japan — 3.42% | ||||||
6,000 | Kubota Corp. | 90,441 | ||||
1,600 | Nidec Corp. | 152,807 | ||||
|
| |||||
243,248 | ||||||
|
| |||||
Netherlands — 4.26% | ||||||
1,325 | ASML Holding NV | 175,819 | ||||
1,100 | Core Laboratories NV | 127,072 | ||||
|
| |||||
302,891 | ||||||
|
| |||||
South Africa — 2.93% | ||||||
1,208 | Naspers Ltd., N Shares | 208,153 | ||||
Switzerland — 3.26% | ||||||
907 | Roche Holding AG | 231,951 | ||||
Taiwan — 3.05% | ||||||
6,600 | Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 216,744 | ||||
United Kingdom — 4.93% | ||||||
4,583 | InterContinental Hotels Group Plc | 224,470 | ||||
9,457 | St. James’s Place Plc | 125,881 | ||||
|
| |||||
350,351 | ||||||
|
| |||||
United States — 57.80% | ||||||
4,900 | Activision Blizzard, Inc. | 244,314 | ||||
278 | Alphabet Inc., Class A* | 235,688 | ||||
230 | Amazon.com, Inc.* | 203,904 |
27 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund (cont.)
March 31, 2017
Shares | Value | |||||
8,200 | Blackstone Group LP (The) - MLP | $ | 243,540 | |||
6,000 | CF Industries Holdings, Inc. | 176,100 | ||||
2,000 | Citigroup, Inc. | 119,640 | ||||
2,800 | Danaher Corp. | 239,484 | ||||
2,700 | EOG Resources, Inc. | 263,385 | ||||
3,212 | Estee Lauder Cos., Inc. (The), Class A | 272,346 | ||||
3,000 | First Republic Bank | 281,430 | ||||
4,450 | Fortive Corp. | 267,979 | ||||
1,731 | Gartner Inc.* | 186,931 | ||||
2,262 | Intuit, Inc. | 262,369 | ||||
1,700 | Kite Pharma, Inc.* | 133,433 | ||||
600 | MarketAxess Holdings, Inc. | 112,494 | ||||
1,000 | Occidental Petroleum Corp. | 63,360 | ||||
1,100 | Sempra Energy | 121,550 | ||||
900 | SVB Financial Group* | 167,481 | ||||
3,200 | TJX Cos., Inc. (The) | 253,056 | ||||
1,600 | UnitedHealth Group, Inc. | 262,416 | ||||
|
| |||||
4,110,900 | ||||||
|
| |||||
Total Common Stocks (Cost $5,896,741) | 6,810,437 | |||||
|
| |||||
Investment Company — 1.11% | ||||||
79,091 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | 79,091 | ||||
|
| |||||
Total Investment Company (Cost $79,091) | 79,091 | |||||
|
| |||||
Total Investments (Cost $5,975,832)(a) — 96.87% | $ | 6,889,528 | ||||
Other assets in excess of liabilities — 3.13% | 222,917 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 7,112,445 | ||||
|
|
* | Non-income producing security. |
(a) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
28 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund (cont.)
March 31, 2017
Abbreviations used are defined below:
ADR - American Depositary Receipt
MLP - Master Limited Partnership
Portfolio Diversification (Unaudited) | ||||
Industries | Percentage of Net Assets | |||
Financials | 20.06 | % | ||
Information Technology | 18.59 | % | ||
Consumer Discretionary | 14.77 | % | ||
Industrials | 13.77 | % | ||
Consumer Staples | 9.18 | % | ||
Health Care | 8.82 | % | ||
Energy | 6.38 | % | ||
Materials | 2.48 | % | ||
Utilities | 1.71 | % | ||
Other* | 4.24 | % | ||
|
| |||
100.00 | % | |||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, |
pending trades and Fund share transactions and accrued expenses payable. |
See Notes to Financial Statements.
29 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund
March 31, 2017
Shares | Value | |||||
Common Stocks — 98.74% | ||||||
Australia — 5.66% | ||||||
43,912 | Amcor Ltd. | $ | 505,093 | |||
166,522 | Oil Search Ltd. | 918,111 | ||||
|
| |||||
1,423,204 | ||||||
|
| |||||
Belgium — 4.01% | ||||||
9,198 | Anheuser-Busch InBev NV | 1,007,876 | ||||
Canada — 4.30% | ||||||
19,245 | Enbridge, Inc. | 806,210 | ||||
23,500 | Encana Corp. | 275,317 | ||||
|
| |||||
1,081,527 | ||||||
|
| |||||
Denmark — 1.76% | ||||||
12,900 | Novo Nordisk A/S | 442,972 | ||||
France — 9.82% | ||||||
3,276 | Air Liquide SA | 374,051 | ||||
9,542 | Pernod Ricard SA | 1,128,066 | ||||
12,983 | Safran SA | 968,975 | ||||
|
| |||||
2,471,092 | ||||||
|
| |||||
Germany — 4.48% | ||||||
32,901 | Deutsche Post AG | 1,125,992 | ||||
Hong Kong — 3.82% | ||||||
152,200 | AIA Group Ltd. | 960,680 | ||||
India — 4.69% | ||||||
15,683 | HDFC Bank Ltd. ADR | 1,179,675 | ||||
Ireland — 4.00% | ||||||
8,668 | CRH Plc | 305,454 | ||||
6,497 | Paddy Power Betfair Plc | 700,512 | ||||
|
| |||||
1,005,966 | ||||||
|
| |||||
Japan — 13.95% | ||||||
42,000 | Astellas Pharma, Inc. | 553,935 | ||||
17,600 | Komatsu Ltd. | 461,002 | ||||
46,100 | Kubota Corp. | 694,887 | ||||
7,700 | Nidec Corp. | 735,385 | ||||
6,300 | Oriental Land Co. Ltd. | 362,155 | ||||
86,000 | Tokyo Gas Co. Ltd. | 392,771 | ||||
5,700 | Toyota Motor Corp. | 309,384 | ||||
|
| |||||
3,509,519 | ||||||
|
|
30 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund (cont.)
March 31, 2017
Shares | Value | |||||
Korea — 1.18% | ||||||
1,125 | LG Chem Ltd. | $ | 295,806 | |||
Netherlands — 5.63% | ||||||
7,752 | ASML Holding NV | 1,028,638 | ||||
25,628 | Ing Groep NV | 387,093 | ||||
|
| |||||
1,415,731 | ||||||
|
| |||||
Philippines — 3.07% | ||||||
236,800 | Universal Robina Corp. | 771,598 | ||||
South Africa — 4.31% | ||||||
6,297 | Naspers Ltd., N Shares | 1,085,051 | ||||
Switzerland — 10.65% | ||||||
1,416 | Partners Group Holding AG | 760,977 | ||||
4,375 | Roche Holding AG | 1,118,835 | ||||
50,036 | UBS Group AG | 799,806 | ||||
|
| |||||
2,679,618 | ||||||
|
| |||||
Taiwan — 4.67% | ||||||
35,818 | Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 1,176,263 | ||||
Thailand — 1.98% | ||||||
90,600 | Kasikornbank Pcl | 498,490 | ||||
United Kingdom — 10.76% | ||||||
19,498 | Intercontinental Hotels Group Plc | 954,989 | ||||
639,550 | Lloyds Banking Group Plc | 531,900 | ||||
19,043 | Royal Dutch Shell Plc, B Shares | 523,480 | ||||
52,404 | St. James’s Place Plc | 697,545 | ||||
|
| |||||
2,707,914 | ||||||
|
| |||||
Total Common Stocks (Cost $23,650,903) | 24,838,974 | |||||
|
|
31 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund (cont.)
March 31, 2017
Shares | Value | |||||
Investment Company — 2.24% | ||||||
564,349 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | $ | 564,349 | |||
|
| |||||
Total Investment Company (Cost $564,349) | 564,349 | |||||
|
| |||||
Total Investments (Cost $24,215,252)(a) — 100.98% | $ | 25,403,323 | ||||
Liabilities in excess of other assets — (0.98)% | (247,154 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 25,156,169 | ||||
|
|
(a) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Abbreviations used are defined below:
ADR - American Depositary Receipt
Portfolio Diversification (Unaudited) | ||||
Industries | Percentage | |||
Financials | 23.12 | % | ||
Industrials | 19.07 | % | ||
Consumer Discretionary | 13.56 | % | ||
Consumer Staples | 11.56 | % | ||
Energy | 10.03 | % | ||
Information Technology | 8.77 | % | ||
Health Care | 8.41 | % | ||
Materials | 2.66 | % | ||
Utilities | 1.56 | % | ||
Other* | 1.26 | % | ||
|
| |||
100.00 | % | |||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, |
pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to Financial Statements.
32 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities
March 31, 2017
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | Global Opportunities Fund | International Opportunities Fund | |||||||||||||
Assets: | ||||||||||||||||
Investments, at value (cost $229,582,121, $5,193,777, $5,975,832 and $24,215,252, respectively) | $ | 251,993,781 | $ | 5,588,791 | $ | 6,889,528 | $ | 25,403,323 | ||||||||
Cash | 1,802 | — | — | 8 | ||||||||||||
Foreign currency, at value (cost $19, $3,598, $11 and $3,813, respectively) | 19 | 3,620 | 11 | 3,833 | ||||||||||||
Interest and dividends receivable | 651,529 | 21,412 | 8,167 | 46,559 | ||||||||||||
Receivable from advisor | — | 6,045 | 10,542 | 3,399 | ||||||||||||
Receivable for Fund shares sold | 7,961,869 | — | 250,000 | 66,000 | ||||||||||||
Receivable for investments sold | 481,512 | 20,763 | 92,356 | 284,399 | ||||||||||||
Prepaid expenses | 25,391 | 19,025 | 10,991 | 11,985 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Assets | 261,115,903 | 5,659,656 | 7,261,595 | 25,819,506 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities: | ||||||||||||||||
Cash overdraft | — | 10 | 9 | — | ||||||||||||
Foreign withholding tax payable | 324,168 | 42,465 | — | — | ||||||||||||
Payable for capital shares redeemed | 3,162 | — | — | — | ||||||||||||
Payable for investments purchased | 8,314,020 | 32,803 | 113,285 | 615,378 | ||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory fees | 53,268 | — | — | — | ||||||||||||
Accounting fees | 4,690 | 3,677 | 3,683 | 3,763 | ||||||||||||
Distribution fees | 8,632 | 8,929 | — | — | ||||||||||||
Custodian fees | 33,000 | 5,149 | 1,881 | 6,436 | ||||||||||||
Trustees’ fees | 46 | 1 | 1 | 5 | ||||||||||||
Shareholder reports | 12,096 | 554 | 618 | 1,015 | ||||||||||||
Audit fees | 27,420 | 27,564 | 25,985 | 26,595 | ||||||||||||
Transfer agent fees | 19,696 | 1,267 | 1,334 | 6,264 | ||||||||||||
Other | 6,030 | 5,416 | 2,354 | 3,881 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Liabilities | 8,806,228 | 127,835 | 149,150 | 663,337 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets | $ | 252,309,675 | $ | 5,531,821 | $ | 7,112,445 | $ | 25,156,169 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets Consist Of: | ||||||||||||||||
Capital | $ | 231,076,877 | $ | 5,345,724 | $ | 6,324,845 | $ | 24,514,957 | ||||||||
Undistributed/(distributions in excess of) net investment income | 128,741 | (109,854 | ) | (170 | ) | (20,373 | ) | |||||||||
Accumulated net realized losses from investment and foreign currency transactions | (1,037,309 | ) | (57,466 | ) | (125,672 | ) | (526,733 | ) | ||||||||
Net unrealized appreciation/(depreciation) on investments and foreign currency transactions | 22,141,366 | 353,417 | 913,442 | 1,188,318 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets | $ | 252,309,675 | $ | 5,531,821 | $ | 7,112,445 | $ | 25,156,169 | ||||||||
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
33 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2017
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | Global Opportunities Fund | International Opportunities Fund | |||||||||||||
Net Assets: | ||||||||||||||||
Class A | $ | 5,114,839 | $ | 2,625,269 | N/A | N/A | ||||||||||
Class I | 223,970,601 | 2,906,552 | $ | 7,101,510 | $ | 25,145,473 | ||||||||||
Class R6 | 23,224,235 | N/A | 10,935 | 10,696 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 252,309,675 | $ | 5,531,821 | $ | 7,112,445 | $ | 25,156,169 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares Outstanding (Unlimited number of shares authorized, no par value): | ||||||||||||||||
Class A | 468,790 | 258,686 | N/A | N/A | ||||||||||||
Class I | 20,225,339 | 286,384 | 627,692 | 2,594,053 | ||||||||||||
Class R6 | 2,087,353 | N/A | 960 | 1,098 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 22,781,482 | 545,070 | 628,652 | 2,595,151 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Values and Redemption Prices Per Share: | ||||||||||||||||
Class A (a) | $ | 10.91 | $ | 10.15 | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | $ | 11.07 | $ | 10.15 | $ | 11.31 | $ | 9.69 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class R6 | $ | 11.13 | N/A | $ | 11.39 | $ | 9.74 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Maximum Offering Prices Per Share: | ||||||||||||||||
Class A | $ | 11.58 | $ | 10.77 | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Maximum Sales Charge - Class A | 5.75 | % | 5.75 | % | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
|
(a) For Class A shares, redemption price per share will be reduced by 1.00% for sales of shares within 12 months of purchase (only applicable on purchases of $1 million or more on which no initial sales charge was paid). Such reduction is not reflected in the net asset value and the redemption price per share.
See Notes to Financial Statements.
34 |
FINANCIAL STATEMENTS |
For the Year Ended March 31, 2017
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | Global Opportunities Fund | International Opportunities Fund | |||||||||||||
Investment Income: | ||||||||||||||||
Dividend income | $ | 2,905,002 | $ | 136,181 | $ | 102,165 | $ | 390,221 | ||||||||
Foreign tax withholding | (312,330 | ) | (13,721 | ) | (4,991 | ) | (35,019 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investment Income | 2,592,672 | 122,460 | 97,174 | 355,202 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 1,296,163 | 62,977 | 48,714 | 142,679 | ||||||||||||
Tax Expense | 2,882 | — | — | — | ||||||||||||
Distribution fees - Class A | 7,105 | 6,172 | — | — | ||||||||||||
Accounting fees | 49,822 | 43,252 | 43,287 | 43,892 | ||||||||||||
Audit fees | 43,791 | 43,935 | 34,686 | 35,296 | ||||||||||||
Legal fees | 37,581 | — | — | 125 | ||||||||||||
Custodian fees | 97,126 | 21,483 | 6,499 | 24,929 | ||||||||||||
Insurance fees | 3,691 | 3,691 | 3,691 | 3,691 | ||||||||||||
Trustees’ fees | 7,256 | 285 | 318 | 911 | ||||||||||||
Transfer agent fees - Class A | 9,228 | 3,662 | — | — | ||||||||||||
Transfer agent fees - Class I | 99,133 | 3,719 | 3,991 | 16,520 | ||||||||||||
Transfer agent fees - Class R6 | 2,821 | — | 2,774 | 2,774 | ||||||||||||
Shareholder reports | 45,956 | 1,170 | 1,365 | 4,030 | ||||||||||||
Registration and filing fees | 57,126 | 35,611 | 36,842 | 38,487 | ||||||||||||
Other fees | 24,998 | 20,158 | 7,232 | 17,830 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses before fee waiver/reimbursement | 1,784,679 | 246,115 | 189,399 | 331,164 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Expenses waived/reimbursed by: | ||||||||||||||||
Advisor | (785,515 | ) | (159,332 | ) | (129,225 | ) | (152,817 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Expenses | 999,164 | 86,783 | 60,174 | 178,347 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Investment Income | 1,593,508 | 35,677 | 37,000 | 176,855 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Realized/Unrealized Gains/(Losses): | ||||||||||||||||
Net realized gains/(losses) on: | ||||||||||||||||
Investment transactions | (18,323 | ) | 9,018 | (30,170 | ) | (361,096 | ) | |||||||||
Foreign currency transactions | (380,123 | ) | (4,614 | ) | (7,138 | ) | (94,291 | ) | ||||||||
Foreign tax | (6,866 | ) | (4,693 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized losses | (405,312 | ) | (289 | ) | (37,308 | ) | (455,387 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation/(depreciation) on: | ||||||||||||||||
Investments | 20,562,239 | 664,168 | 719,614 | 1,303,809 | ||||||||||||
Foreign currency transactions | 55,835 | 997 | (396 | ) | (99 | ) | ||||||||||
Foreign deferred tax | (313,945 | ) | (42,465 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net unrealized gains | 20,304,129 | 622,700 | 719,218 | 1,303,710 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets resulting from operations | $ | 21,492,325 | $ | 658,088 | $ | 718,910 | $ | 1,025,178 | ||||||||
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
35 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
Emerging Markets Equity Fund | ||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 1,593,508 | $ | 179,859 | ||||
Net realized losses from investments and foreign currency transactions | (405,312 | ) | (518,560 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | 20,304,129 | 1,317,870 | ||||||
|
|
|
| |||||
Change in net assets resulting from operations | 21,492,325 | 979,169 | ||||||
|
|
|
| |||||
Distributions to Class A Shareholders: | ||||||||
From net investment income | (20,021 | ) | (32,401 | ) | ||||
From net realized gains from investment transactions | (10,581 | ) | (11,199 | ) | ||||
Distributions to Class I Shareholders: | ||||||||
From net investment income | (976,592 | ) | (46,215 | ) | ||||
From net realized gains from investment transactions | (454,934 | ) | (161,444 | ) | ||||
Distributions to Class R6 Shareholders: | ||||||||
From net investment income | (71,273 | ) | — | |||||
From net realized gains from investment transactions | (77,763 | ) | — | |||||
|
|
|
| |||||
Change in net assets resulting from shareholder distributions | (1,611,164 | ) | (251,259 | ) | ||||
|
|
|
| |||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 168,350,107 | 73,792,423 | ||||||
Distributions reinvested | 1,290,708 | 199,469 | ||||||
Cost of shares redeemed | (15,002,769 | ) | (3,795,706 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from capital transactions | 154,638,046 | 70,196,186 | ||||||
|
|
|
| |||||
Net increase in net assets | 174,519,207 | 70,924,096 | ||||||
Net Assets: | ||||||||
Beginning of year | 77,790,468 | 6,866,372 | ||||||
|
|
|
| |||||
End of year | $ | 252,309,675 | $ | 77,790,468 | ||||
|
|
|
| |||||
Undistributed (distributions in excess of) net investment income | $ | 128,741 | $ | (12,720 | ) | |||
|
|
|
| |||||
Share Transactions: | ||||||||
Issued | 16,265,912 | 7,559,913 | ||||||
Reinvested | 127,634 | 21,504 | ||||||
Redeemed | (1,432,507 | ) | (385,062 | ) | ||||
|
|
|
| |||||
Change in shares resulting from capital transactions | 14,961,039 | 7,196,355 | ||||||
|
|
|
|
See Notes to Financial Statements.
36 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets (cont.)
Emerging Markets Small Cap Equity Fund | ||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 35,677 | $ | 66,192 | ||||
Net realized losses from investments and foreign currency transactions | (289 | ) | (50,879 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | 622,700 | (558,151 | ) | |||||
|
|
|
| |||||
Change in net assets resulting from operations | 658,088 | (542,838 | ) | |||||
|
|
|
| |||||
Distributions to Class A Shareholders: | ||||||||
From net investment income | (99,845 | ) | (5,032 | ) | ||||
From net realized gains from investment transactions | — | (19,436 | ) | |||||
Distributions to Class I Shareholders: | ||||||||
From net investment income | (106,882 | ) | (11,302 | ) | ||||
From net realized gains from investment transactions | — | (19,546 | ) | |||||
|
|
|
| |||||
Change in net assets resulting from shareholder distributions | (206,727 | ) | (55,316 | ) | ||||
|
|
|
| |||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 317,698 | 21,662 | ||||||
Distributions reinvested | 206,727 | 55,315 | ||||||
Cost of shares redeemed | (109,741 | ) | (255,922 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from capital transactions | 414,684 | (178,945 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets | 866,045 | (777,099 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 4,665,776 | 5,442,875 | ||||||
|
|
|
| |||||
End of year | $ | 5,531,821 | $ | 4,665,776 | ||||
|
|
|
| |||||
Undistributed net investment income | $ | (109,854 | ) | $ | 48,423 | |||
|
|
|
| |||||
Share Transactions: | ||||||||
Issued | 34,795 | 2,355 | ||||||
Reinvested | 22,217 | 6,286 | ||||||
Redeemed | (10,829 | ) | (28,554 | ) | ||||
|
|
|
| |||||
Change in shares resulting from capital transactions | 46,183 | (19,913 | ) | |||||
|
|
|
|
See Notes to Financial Statements.
37 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets (cont.)
Global Opportunities Fund | ||||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||||
From Investment Activities: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 37,000 | $ | 24,925 | ||||||||||||
Net realized losses from investments and foreign currency transactions | (37,308 | ) | (86,249 | ) | ||||||||||||
Net change in unrealized appreciation on investments and foreign currency transactions | 719,218 | 33,979 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 718,910 | (27,345 | ) | |||||||||||||
|
|
|
| |||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (42,516 | ) | (62,197 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (42,516 | ) | (62,197 | ) | ||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 1,207,391 | 69,951 | ||||||||||||||
Distributions reinvested | 42,516 | 62,197 | ||||||||||||||
Cost of shares redeemed | (10,645 | ) | (850 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 1,239,262 | 131,298 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 1,915,656 | 41,756 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 5,196,789 | 5,155,033 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 7,112,445 | $ | 5,196,789 | ||||||||||||
|
|
|
| |||||||||||||
Undistributed net investment income | $ | (170 | ) | $ | 8,071 | |||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 112,152 | 7,130 | ||||||||||||||
Reinvested | 4,000 | 6,257 | ||||||||||||||
Redeemed | (1,007 | ) | (81 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 115,145 | 13,306 | ||||||||||||||
|
|
|
|
See Notes to Financial Statements.
38 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets (cont.)
International Opportunities Fund | ||||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||||
From Investment Activities: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 176,855 | $ | 67,343 | ||||||||||||
Net realized losses from investments and foreign currency transactions | (455,387 | ) | (172,630 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | 1,303,710 | (224,851 | ) | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 1,025,178 | (330,138 | ) | |||||||||||||
|
|
|
| |||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (110,936 | ) | (97,891 | ) | ||||||||||||
Distributions to Class R6 Shareholders: | ||||||||||||||||
From net investment income | (4 | ) | — | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (110,940 | ) | (97,891 | ) | ||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 18,913,370 | 505,607 | ||||||||||||||
Distributions reinvested | 110,939 | 97,891 | ||||||||||||||
Cost of shares redeemed | (265,440 | ) | (765 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 18,758,869 | 602,733 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 19,673,107 | 174,704 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 5,483,062 | 5,308,358 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 25,156,169 | $ | 5,483,062 | ||||||||||||
|
|
|
| |||||||||||||
Undistributed net investment income | $ | (20,373 | ) | $ | 8,003 | |||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 2,032,728 | 48,876 | ||||||||||||||
Reinvested | 12,205 | 10,560 | ||||||||||||||
Redeemed | (29,014 | ) | (74 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 2,015,919 | 59,362 | ||||||||||||||
|
|
|
|
See Notes to Financial Statements.
39 |
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.81 | $ | 10.99 | $ | 10.20 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.11 | 0.07 | 0.07 | — | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 1.10 | (1.11) | 1.05 | 0.20 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 1.21 | (1.04) | 1.12 | 0.20 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.07) | (0.10) | (0.22) | — | ||||||||||||||||||||||||||||
Realized gains | (0.04) | (0.04) | (0.11) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.11) | (0.14) | (0.33) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 10.91 | $ | 9.81 | $ | 10.99 | $ | 10.20 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return:*(c) | 12.42% | (9.39)% | 11.17 | % | 2.00%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.98% | 1.14%(e) | 1.45 | % | 1.45%(f) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.09% | 0.71% | 0.64 | % | 0.04%(f) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets** | 1.80% | 2.74% | 4.96 | % | 8.77%(f) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 5,115 | $ | 2,540 | $ | 2,849 | $ | 2,550 | ||||||||||||||||||||||||
Portfolio turnover*** | 19 | % | 19 | % | 37 | % | 11 | % |
* | Excludes sales charge. |
** | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
*** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(d) | Not Annualized. |
(e) | Beginning August 3, 2015, the net operating expenses were contractually limited to 0.975% of average daily net assets of Class A. The ratio of net expenses to average net assets represents a blended percentage for the year ended March 31, 2016. |
(f) | Annualized. |
See Notes to Financial Statements.
40 |
FINANCIAL HIGHLIGHTS |
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.95 | $ | 11.01 | $ | 10.21 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.12 | 0.06 | 0.09 | 0.01 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 1.12 | (1.07) | 1.05 | 0.20 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 1.24 | (1.01) | 1.14 | 0.21 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.08) | (0.01) | (0.23) | — | ||||||||||||||||||||||||||||
Realized gains | (0.04) | (0.04) | (0.11) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.12) | (0.05) | (0.34) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 11.07 | $ | 9.95 | $ | 11.01 | $ | 10.21 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return:(c) | 12.56% | (9.18)% | 11.38 | % | 2.10%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.73% | 0.75%(e) | 1.20 | % | 1.20%(f) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.18% | 0.62% | 0.87 | % | 0.29%(f) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.30% | 1.89% | 4.65 | % | 8.52%(f) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 223,971 | $ | 75,250 | $ | 4,017 | $ | 2,551 | ||||||||||||||||||||||||
Portfolio turnover** | 19 | % | 19 | % | 37 | % | 11 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(d) | Not Annualized. |
(e) | Beginning August 3, 2015, the net operating expenses were contractually limited to 0.725% of average daily net assets of Class I. The ratio of net expenses to average net assets represents a blended percentage for the year ended March 31, 2016. |
(f) | Annualized. |
See Notes to Financial Statements.
41 |
FINANCIAL HIGHLIGHTS |
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Period Ended March 31, 2017(a) | ||||||||
Class R6 | ||||||||
Per Share Operating Performance: | ||||||||
Net asset value, beginning of period | $ | 10.08 | ||||||
|
| |||||||
Net investment income(b) | 0.04 | |||||||
Realized and unrealized gains/(losses) | 1.08 | |||||||
|
| |||||||
Total from investment activities | 1.12 | |||||||
|
| |||||||
Distributions: | ||||||||
Net investment income | (0.03 | ) | ||||||
Realized gains | (0.04 | ) | ||||||
|
| |||||||
Total distributions | (0.07 | ) | ||||||
|
| |||||||
Net asset value, end of period | $ | 11.13 | ||||||
|
| |||||||
Total Return:(c) | 11.20%(d) | |||||||
Ratios to Average Net Assets: | ||||||||
Ratio of Net Expenses to Average Net Assets | 0.73%(e) | |||||||
Ratio of Net Investment Income to Average Net Assets | 0.95%(e) | |||||||
Ratio of Expenses to Average Net Assets* | 1.28%(e) | |||||||
Net assets, end of period (in thousands) | $ | 23,224 | ||||||
Portfolio turnover** | 19 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(d) | Not Annualized. |
(e) | Annualized. |
See Notes to Financial Statements.
42 |
FINANCIAL HIGHLIGHTS |
RBC Emerging Markets Small Cap Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.35 | $ | 10.49 | $ | 10.37 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.06 | 0.12 | 0.03 | 0.04 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 1.14 | (1.16) | 0.44 | 0.33 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 1.20 | (1.04) | 0.47 | 0.37 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.40) | (0.02) | (0.20) | — | ||||||||||||||||||||||||||||
Realized gains | — | (0.08) | (0.15) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.40) | (0.10) | (0.35) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 10.15 | $ | 9.35 | $ | 10.49 | $ | 10.37 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return:*(c) | 13.24% | (9.86)% | 4.64 | % | 3.70%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 1.85% | 1.85% | 1.85 | % | 1.85%(e) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.57% | 1.25% | 0.31 | % | 1.49%(e) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets** | 5.02% | 5.42% | 5.58 | % | 8.96%(e) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,625 | $ | 2,319 | $ | 2,719 | $ | 2,592 | ||||||||||||||||||||||||
Portfolio turnover*** | 38 | % | 34 | % | 32 | % | 19 | % |
* | Excludes sales charge. |
** | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
*** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(d) | Not Annualized. |
(e) | Annualized. |
See Notes to Financial Statements.
43 |
FINANCIAL HIGHLIGHTS |
RBC Emerging Markets Small Cap Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.35 | $ | 10.49 | $ | 10.37 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.08 | 0.14 | 0.06 | 0.05 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 1.15 | (1.15) | 0.44 | 0.32 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 1.23 | (1.01) | 0.50 | 0.37 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.43) | (0.05) | (0.23) | — | ||||||||||||||||||||||||||||
Realized gains | — | (0.08) | (0.15) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.43) | (0.13) | (0.38) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 10.15 | $ | 9.35 | $ | 10.49 | $ | 10.37 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return:(c) | 13.53% | (9.60)% | 4.93 | % | 3.70%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 1.60% | 1.60% | 1.60 | % | 1.60%(e) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.84% | 1.50% | 0.56 | % | 1.74%(e) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 4.76% | 5.17% | 5.32 | % | 8.71%(e) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,907 | $ | 2,347 | $ | 2,724 | $ | 2,594 | ||||||||||||||||||||||||
Portfolio turnover** | 38 | % | 34 | % | 32 | % | 19 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(d) | Not Annualized. |
(e) | Annualized. |
See Notes to Financial Statements.
44 |
FINANCIAL HIGHLIGHTS |
RBC Global Opportunities Fund
(Selected data for a share outstanding throughout the period indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Period Ended March 31, 2015(a) | ||||||||||||||||||||||
Class I | ||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.12 | $ | 10.31 | $ | 10.00 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net investment income(b) | 0.07 | 0.05 | 0.01 | |||||||||||||||||||||
Realized and unrealized gains/(losses) | 1.20 | (0.12) | 0.30 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total from investment activities | 1.27 | (0.07) | 0.31 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Distributions: | ||||||||||||||||||||||||
Net investment income | (0.08) | (0.12) | — (c) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total distributions | (0.08) | (0.12) | — (c) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net asset value, end of period | $ | 11.31 | $ | 10.12 | $ | 10.31 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Return:(d) | 12.58% | (0.63)% | 3.13%(e) | |||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 1.05% | 1.05% | 1.05%(f) | |||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.65% | 0.48% | 0.19%(f) | |||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 3.26% | 3.97% | 3.46%(f) | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 7,102 | $ | 5,197 | $ | 5,155 | ||||||||||||||||||
Portfolio turnover** | 36 | % | 34 | % | 11 | % |
* | During the year, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(e) | Not Annualized. |
(f) | Annualized. |
See Notes to Financial Statements.
45 |
FINANCIAL HIGHLIGHTS |
RBC Global Opportunities Fund
(Selected data for a share outstanding throughout the period indicated)
For the Period Ended March 31, 2017(a) | ||||||||
Class R6 | ||||||||
Per Share Operating Performance: | ||||||||
Net asset value, beginning of period | $ | 10.42 | ||||||
|
| |||||||
Net investment income(b) | — | (c) | ||||||
Realized and unrealized gains/(losses) | 0.97 | |||||||
|
| |||||||
Total from investment activities | 0.97 | |||||||
|
| |||||||
Net asset value, end of period | $ | 11.39 | ||||||
|
| |||||||
Total Return:(d) | 9.31%(e) | |||||||
Ratios to Average Net Assets: | ||||||||
Ratio of Net Expenses to Average Net Assets | 1.00%(f) | |||||||
Ratio of Net Investment Income to Average Net Assets | 0.10%(f) | |||||||
Ratio of Expenses to Average Net Assets* | 77.25%(f) | |||||||
Net assets, end of period (in thousands) | $ | 11 | ||||||
Portfolio turnover** | 36 | % |
* | During the year, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(e) | Not Annualized. |
(f) | Annualized. |
See Notes to Financial Statements.
46 |
FINANCIAL HIGHLIGHTS |
RBC International Opportunities Fund
(Selected data for a share outstanding throughout the period indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Period Ended March 31, 2015(a) | ||||||||||||||||||||||
Class I | ||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.47 | $ | 10.21 | $ | 10.00 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net investment income(b) | 0.09 | 0.12 | 0.02 | |||||||||||||||||||||
Realized and unrealized gains/(losses) | 0.18 | (0.69) | 0.19 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total from investment activities | 0.27 | (0.57) | 0.21 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Distributions: | ||||||||||||||||||||||||
Net investment income | (0.05) | (0.17) | — (c) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total distributions | (0.05) | (0.17) | — (c) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net asset value, end of period | $ | 9.69 | $ | 9.47 | $ | 10.21 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Return:(d) | 2.85% | (5.52) | % | 2.12%(e) | ||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 1.00% | 1.00% | 1.00%(f) | |||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.99% | 1.23% | 0.59%(f) | |||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.84% | 3.92% | 3.50%(f) | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 25,145 | $ | 5,483 | $ | 5,308 | ||||||||||||||||||
Portfolio turnover** | 38 | % | 35 | % | 8 | % |
* | During the year, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(e) | Not Annualized. |
(f) | Annualized. |
See Notes to Financial Statements.
47 |
FINANCIAL HIGHLIGHTS |
RBC International Opportunities Fund
(Selected data for a share outstanding throughout the period indicated)
For the Period Ended March 31, 2017(a) | ||||||||
Class R6 | ||||||||
Per Share Operating Performance: | ||||||||
Net asset value, beginning of period | $ | 9.11 | ||||||
|
|
|
| |||||
Net investment income(b) | 0.02 | |||||||
Realized and unrealized gains/(losses) | 0.61 | |||||||
|
|
|
| |||||
Total from investment activities | 0.63 | |||||||
|
|
|
| |||||
Distributions: | ||||||||
Net investment income | — (c) | |||||||
|
|
|
| |||||
Total distributions | — (c) | |||||||
|
|
|
| |||||
Net asset value, end of period | $ | 9.74 | ||||||
|
|
|
| |||||
Total Return:(d) | 6.96%(e) | |||||||
Ratios to Average Net Assets: | ||||||||
Ratio of Net Expenses to Average Net Assets | 0.95%(f) | |||||||
Ratio of Net Investment Income to Average Net Assets | 0.46%(f) | |||||||
Ratio of Expenses to Average Net Assets* | 77.08%(f) | |||||||
Net assets, end of period (in thousands) | $ | 11 | ||||||
Portfolio turnover** | 38 | % |
* | During the year, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Assumes investment at net asset value at the beginning of the period, reinvestment of all dividends and distributions, and a complete redemption of the investment at net asset value at the end of the period. |
(e) | Not Annualized. |
(f) | Annualized. |
See Notes to Financial Statements.
48 |
March 31, 2017
1.Organization:
RBC Funds Trust (the “Trust”) is registered under the Investment Company Act of 1940 (as amended) as an open-end management investment company. The Trust was organized as a Delaware statutory trust on December 16, 2003 and currently consists of 21 portfolios. This report includes the following four investment portfolios (each a “Fund” and collectively, the “Funds”):
- RBC Emerging Markets Equity Fund (“Emerging Markets Equity Fund”)
- RBC Emerging Markets Small Cap Equity Fund (“Emerging Markets Small Cap Equity Fund”)
- RBC Global Opportunities Fund (“Global Opportunities Fund”)
- RBC International Opportunities Fund (“International Opportunities Fund”)
Emerging Markets Equity Fund offers three share classes: Class A, Class R6 (effective November 22, 2016) and Class I shares. Emerging Markets Small Cap Equity Fund offers two share classes: Class A and Class I shares. Global Opportunities Fund and International Opportunities Fund offer two share classes: Class I and Class R6 shares (effective November 22, 2016). Class A shares are offered with a 5.75% maximum front-end sales charge and a 1.00% contingent deferred sales charge (“CDSC”) for redemption within 12 months of a $1 million or greater purchase on which no front-end sales charge was paid. Class I and Class R6 shares (intended for investors meeting certain investment minimum thresholds) are not subject to either a front-end sales charge or a CDSC.
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)” or “Advisor” or “Co-Administrator”) acts as the investment advisor for the Funds and RBC Global Asset Management (UK) Limited (“RBC GAM (UK)” or “Sub-Advisor”) serves as the investment sub-advisor. The officers of the Trust (“Fund Management”) are also employees of RBC GAM (US).
2. Significant Accounting Policies:
Each Fund is an investment company that follows accounting and reporting guidelines under the Financial Accounting Standards Board. Summarized below are the significant accounting policies of the Funds. These policies conform to accounting principles generally accepted in the United States of America (“US GAAP”). Fund Management follows these policies when preparing financial statements. Fund Management may also be required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The financial statements are as of the close of regular trading on the New York Stock Exchange (“NYSE”).
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms and amended certain existing rules and forms to modernize the reporting and disclosure of information by registered investment companies. In part, the rules amend Regulation S-X and will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that adoption of these amendments will have on the Funds’ financial statements and related disclosures.
Security Valuation:
The Trust’s Board of Trustees (the “Board”) has adopted pricing and valuation procedures for determining the fair value of each Fund’s investments. Fair value of a security is considered to be the price that a fund might reasonably expect to receive upon its current sale in an orderly transaction between market participants.
49 |
NOTES TO FINANCIAL STATEMENTS |
Equity securities are generally valued on the basis of prices furnished by third-party pricing services approved by the Board. Equity securities listed on one or more exchanges shall be valued at the last available quoted sale price on the primary trading exchange as of the regularly scheduled closing time of the exchange and are categorized as Level 1 in the fair value hierarchy (see “Fair Value Measurements” below for additional information). An equity security not listed on an exchange but listed on NASDAQ shall be valued at the NASDAQ official closing price and is also categorized as Level 1. If there was no sale on the primary exchange on the day the net asset value is calculated or a NASDAQ official closing price is not available, the most recent bid quotation generally will be used and such securities will be generally categorized as Level 2. Investments in open-end investment companies (mutual funds) are valued at net asset value and are categorized as Level 1 in the fair value hierarchy.
Fixed income securities, including to-be-announced (“TBA”) commitments and municipal bonds, are generally valued based on evaluated prices received from third-party pricing services or from broker-dealers who make markets in the securities and are generally categorized as Level 2 in the fair value hierarchy. The pricing services utilize both dealer-supplied valuations and electronic data processing techniques that take into account multiple appropriate factors such as institutional-size trading in similar groups of securities, market spreads, interest rates, and fundamental security analytical data including yield, quality, coupon rate, maturity and type of issue.
Foreign securities valued in non-U.S. dollars are valued in the foreign currency and then converted into the U.S. dollar equivalent using the foreign exchange rate in effect at the close of the NYSE on the day the security’s value is determined. The value of securities traded in markets outside the United States may be affected on a day that the NYSE is closed and an investor is not able to purchase, exchange or redeem shares of the Funds.
Many securities markets and exchanges outside of North American time zones close prior to the close of the NYSE; therefore, the closing prices for equity securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the NYSE. The Funds have procedures in place to fair value foreign equity securities traded in countries outside North American time zones daily in order to take into account, among other things, any significant events occurring after the close of trading in a foreign market. The Funds receive adjusted fair value prices from a designated independent pricing vendor. In general, the vendor utilizes a multi-factor model to consider such information as the issue’s closing price, relevant general and sector indices and currency fluctuations to generate an evaluated adjustment factor for each security and provide an evaluated fair value price. The Funds generally categorize such evaluated fair value prices as Level 2 in the fair value hierarchy.
The Board has delegated to the Funds’ Pricing Committee (“Pricing Committee”) the responsibility for implementing the pricing and valuation procedures, including responsibility for determining the fair value of the Funds’ securities. The Pricing Committee includes representatives of the Funds’ Advisor and Co-Administrator, including personnel from accounting and operations, investment management, trading, risk management, compliance and legal. The Pricing Committee meets at least quarterly to review and approve Fund valuation matters, including a review of the Funds’ pricing activity and operations, fair value measurements, pricing vendors, policies and procedures, and related controls. At least a quorum of the Pricing Committee shall meet more frequently, as needed, to consider and approve time-sensitive fair valuation matters. The Pricing Committee reports to the Valuation, Portfolio Management and Performance Committee (“Valuation Committee”) of the Board. Members of the Pricing Committee meet with the Valuation Committee and the Board at each of their regularly scheduled meetings to discuss valuation matters and actions taken during the period.
The Board has adopted procedures to determine the fair value of a security when a price is not available from a pricing service or broker-dealer or Fund Management determines that a price provided by a pricing service or broker-dealer does not approximate fair value. Fair valuation may also be used when a significant valuation event affecting the value of a security or market sector is determined to have occurred between the time when a security’s market closes and the time the Fund’s net asset
50 |
NOTES TO FINANCIAL STATEMENTS |
value is calculated. The fair value of the security will be determined in good faith by the Pricing Committee in accordance with procedures and methodologies adopted by the Board. General factors used in determining the fair value of securities include, but are not limited to, fundamental analytical data relating to the security, the issuer and the market, such as duration, prepayment and default rates; general level of interest rates and changes in interest rates; information from broker-dealers; trading in similar securities; any restrictions on disposition of the security; and an evaluation of the forces that influence the market in which the investments are traded. These securities are either categorized as Level 2 or 3 in the fair value hierarchy, depending on the relevant inputs used.
When the Funds utilize fair valuation methods that use significant unobservable inputs to determine a security’s value, such securities will be categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Funds’ policy is intended to result in a calculation of a Fund’s net asset value that fairly reflects security values as of the time of pricing, the Funds cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that the Funds could obtain for a security if they were to dispose of it as of the time of pricing (for instance, in a forced or distressed sale). The prices used by the Funds may differ from the value that would be realized if the securities were sold.
The Pricing Committee employs various methods for calibrating the valuation approach related to securities categorized within Level 2 and Level 3 of the fair value hierarchy. These methods may include regular due diligence of the Funds’ pricing vendors, a regular review of key inputs and assumptions, transaction back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing and stale prices and large movements in market value, and reviews of any market related activities. Additionally, the pricing of all fair value holdings is subsequently reported to the Valuation Committee and Board.
Fair Value Measurements:
The Funds disclose the fair value of their investments in a hierarchy that categorizes investments based on the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:
● Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access at the measurement date.
● Level 2 - Significant inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active. Observable inputs may include quoted prices for similar securities, interest rates, spreads, prepayment speeds, etc.
● Level 3 - Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those securities.
Inputs used in determining fair value of an investment may include, but are not limited to, price information, volatility statistics, credit and market data, and other factors, all of which may be either observable or unobservable. Inputs can vary among investments and will be impacted by the investment type and volume of activity for the particular security or similar securities in the market. Investments in the Level 3 category are generally supported by transactions and quoted prices from dealers participating in the market for those investments. Investments may be included in the Level 3 category due to a lack of market activity or transparency. Internal valuation models may also be used as a pricing source for Level 3 investments. Internal valuation models may rely on one or more unobservable inputs, such as estimated cash flows, financial statement analysis and discount rates.
51 |
NOTES TO FINANCIAL STATEMENTS |
The summary of inputs used to determine the fair value of each Fund’s investments as of March 31, 2017 is as follows:
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
Emerging Markets Equity Fund Investments in Securities | ||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||
Brazil | $ | 16,107,289 | $ | — | $ | — | $ | 16,107,289 | ||||||||||||||||||||||||
Chile | 4,397,253 | 7,373,927 | — | 11,771,180 | ||||||||||||||||||||||||||||
China | 8,964,180 | 35,977,257 | — | 44,941,437 | ||||||||||||||||||||||||||||
India | 12,863,480 | 19,821,784 | — | 32,685,264 | ||||||||||||||||||||||||||||
Indonesia | — | 7,580,572 | — | 7,580,572 | ||||||||||||||||||||||||||||
Jordan | — | 3,413,402 | — | 3,413,402 | ||||||||||||||||||||||||||||
Korea | — | 17,896,989 | — | 17,896,989 | ||||||||||||||||||||||||||||
Malaysia | — | 2,970,775 | — | 2,970,775 | ||||||||||||||||||||||||||||
Mexico | 3,021,678 | — | — | 3,021,678 | ||||||||||||||||||||||||||||
Nigeria | — | 786,857 | — | 786,857 | ||||||||||||||||||||||||||||
Peru | 5,911,460 | — | — | 5,911,460 | ||||||||||||||||||||||||||||
Philippines | — | 6,986,463 | — | 6,986,463 | ||||||||||||||||||||||||||||
Russia | 2,724,233 | — | — | 2,724,233 | ||||||||||||||||||||||||||||
South Africa | — | 26,239,537 | — | 26,239,537 | ||||||||||||||||||||||||||||
Taiwan | — | 23,662,676 | — | 23,662,676 | ||||||||||||||||||||||||||||
Thailand | — | 7,560,625 | — | 7,560,625 | ||||||||||||||||||||||||||||
Turkey | — | 4,425,351 | — | 4,425,351 | ||||||||||||||||||||||||||||
United Arab Emirates | — | 2,158,668 | — | 2,158,668 | ||||||||||||||||||||||||||||
United Kingdom | — | 7,919,718 | — | 7,919,718 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Common Stocks | 53,989,573 | 174,774,601 | — | 228,764,174 | ||||||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
Korea | — | 9,195,989 | — | 9,195,989 | ||||||||||||||||||||||||||||
Investment Company | 14,033,618 | — | — | 14,033,618 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Investments | $ | 68,023,191 | $ | 183,970,590 | $ | — | $ | 251,993,781 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
52 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
Emerging Markets Small Cap Equity Fund Investments in Securities | ||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||
Brazil | $ | 410,463 | $ | — | $ | — | $ | 410,463 | ||||||||||||||||||||||||
Chile | 348,001 | — | — | 348,001 | ||||||||||||||||||||||||||||
China | — | 283,819 | — | 283,819 | ||||||||||||||||||||||||||||
Egypt | 88,494 | — | — | 88,494 | ||||||||||||||||||||||||||||
Hong Kong | — | 162,017 | — | 162,017 | ||||||||||||||||||||||||||||
India | — | 1,130,357 | 1,130,357 | |||||||||||||||||||||||||||||
Indonesia | — | 252,781 | — | 252,781 | ||||||||||||||||||||||||||||
Korea | — | 414,348 | — | 414,348 | ||||||||||||||||||||||||||||
Malaysia | — | 106,897 | — | 106,897 | ||||||||||||||||||||||||||||
Mexico | 175,762 | — | — | 175,762 | ||||||||||||||||||||||||||||
Nigeria | — | 27,772 | — | 27,772 | ||||||||||||||||||||||||||||
Philippines | — | 219,809 | — | 219,809 | ||||||||||||||||||||||||||||
South Africa | — | 336,432 | — | 336,432 | ||||||||||||||||||||||||||||
Taiwan | — | 618,269 | — | 618,269 | ||||||||||||||||||||||||||||
Thailand | — | 529,440 | — | 529,440 | ||||||||||||||||||||||||||||
United States | — | 153,366 | — | 153,366 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Common Stocks | 1,022,720 | 4,235,307 | — | 5,258,027 | ||||||||||||||||||||||||||||
Equity Linked Securities | ||||||||||||||||||||||||||||||||
Luxembourg | — | 141,487 | — | 141,487 | ||||||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
Korea | — | 124,701 | — | 124,701 | ||||||||||||||||||||||||||||
Philippines | $ | — | $ | — | $ | 116 | $ | 116 | ||||||||||||||||||||||||
Investment Company | 64,460 | — | — | 64,460 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Investments | $ | 1,087,180 | $ | 4,501,495 | $ | 116 | $ | 5,588,791 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
Global Opportunities Fund Investments in Securities | ||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||
Belgium | $ | — | $ | 188,908 | $ | — | $ | 188,908 | ||||||||||||||||||||||||
France | — | 191,400 | — | 191,400 | ||||||||||||||||||||||||||||
Germany | — | 228,614 | — | 228,614 | ||||||||||||||||||||||||||||
Hong Kong | — | 75,744 | — | 75,744 | ||||||||||||||||||||||||||||
India | 300,880 | — | — | 300,880 | ||||||||||||||||||||||||||||
Ireland | — | 160,653 | — | 160,653 | ||||||||||||||||||||||||||||
Japan | — | 243,248 | — | 243,248 | ||||||||||||||||||||||||||||
Netherlands | 127,072 | 175,819 | — | 302,891 | ||||||||||||||||||||||||||||
South Africa | — | 208,153 | — | 208,153 | ||||||||||||||||||||||||||||
Switzerland | — | 231,951 | — | 231,951 | ||||||||||||||||||||||||||||
Taiwan | 216,744 | — | — | 216,744 | ||||||||||||||||||||||||||||
United Kingdom | — | 350,351 | — | 350,351 | ||||||||||||||||||||||||||||
United States | 4,110,900 | — | — | 4,110,900 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Common Stocks | 4,755,596 | 2,054,841 | — | 6,810,437 | ||||||||||||||||||||||||||||
Investment Company | 79,091 | — | — | 79,091 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Investments | $ | 4,834,687 | $ | 2,054,841 | $ | — | $ | 6,889,528 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
53 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||||||||||
International Opportunities Fund Investments in Securities | ||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||
Australia | $ | — | $ | 1,423,204 | $ | — | $ | 1,423,204 | ||||||||||||||||||||||||
Belgium | — | 1,007,876 | — | 1,007,876 | ||||||||||||||||||||||||||||
Canada | 1,081,527 | — | — | 1,081,527 | ||||||||||||||||||||||||||||
Denmark | — | 442,972 | — | 442,972 | ||||||||||||||||||||||||||||
France | — | 2,471,092 | — | 2,471,092 | ||||||||||||||||||||||||||||
Germany | — | 1,125,992 | — | 1,125,992 | ||||||||||||||||||||||||||||
Hong Kong | — | 960,680 | — | 960,680 | ||||||||||||||||||||||||||||
India | 1,179,675 | — | — | 1,179,675 | ||||||||||||||||||||||||||||
Ireland | — | 1,005,966 | — | 1,005,966 | ||||||||||||||||||||||||||||
Japan | — | 3,509,519 | — | 3,509,519 | ||||||||||||||||||||||||||||
Korea | — | 295,806 | — | 295,806 | ||||||||||||||||||||||||||||
Netherlands | — | 1,415,731 | — | 1,415,731 | ||||||||||||||||||||||||||||
Philippines | — | 771,598 | — | 771,598 | ||||||||||||||||||||||||||||
South Africa | — | 1,085,051 | — | 1,085,051 | ||||||||||||||||||||||||||||
Switzerland | — | 2,679,618 | — | 2,679,618 | ||||||||||||||||||||||||||||
Taiwan | 1,176,263 | — | — | 1,176,263 | ||||||||||||||||||||||||||||
Thailand | — | 498,490 | — | 498,490 | ||||||||||||||||||||||||||||
United Kingdom | — | 2,707,914 | — | 2,707,914 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Common Stocks | 3,437,465 | 21,401,509 | — | 24,838,974 | ||||||||||||||||||||||||||||
Investment Company | $ | 564,349 | $ | — | $ | — | $ | 564,349 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Investments | $ | 4,001,814 | $ | 21,401,509 | $ | — | $ | 25,403,323 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
The Funds did not have any liabilities that were measured at fair value on a recurring basis at March 31, 2017.
During the year ended March 31, 2017, the Funds recognized no transfers to/from Level 1 or Level 2. The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the year utilizing fair value at the beginning of the year.
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Emerging Markets Small Cap Equity Fund | ||||||||
Preferred Stock (Philippines) | ||||||||
Balance as of 3/31/16 (value) | $ | 126 | ||||||
Purchases | — | |||||||
Sales (Paydowns) | — | |||||||
Realized gain (loss) | — | |||||||
Change in unrealized appreciation (depreciation) | (10 | )* | ||||||
|
| |||||||
Balance as of 3/31/17 (value) | $ | 116 | ||||||
|
|
* Net change in unrealized appreciation/(depreciation) in Level 3 securities still held at March 31, 2017.
The Funds’ assets assigned to the Level 3 category were valued using market data or trade information specific to the security or comparable issues. However, due to a lack of market activity or corroborating data to support the valuations, the investments were classified as Level 3.
54 |
NOTES TO FINANCIAL STATEMENTS |
The significant unobservable inputs used in fair value measurement of the Level 3 security shown above include the subscription price paid by the Fund when the preferred shares were received and security-specific characteristics, including whether it may be converted into common shares. Significant changes in any of those inputs in isolation would result in a significantly lower or higher fair value measurement.
Financial Instruments:
Repurchase Agreements:
The Funds may enter into repurchase agreements with counterparties whom the Advisor has deemed creditworthy, including primary dealers that report to the Federal Reserve Bank of New York or other large U.S. commercial banks or broker-dealers. These repurchase agreements are subject to the seller’s agreement to repurchase such securities at a mutually agreed upon date and price. The repurchase price generally equals the price paid by the Funds plus interest negotiated on the basis of current short-term rates.
Securities pledged as collateral for repurchase agreements are held by a custodian bank until maturity of the repurchase agreement. The Funds have procedures to monitor additional collateral, if needed, to ensure that the daily market value of the collateral remains in excess of the repurchase agreement in the event of a default. There were no repurchase agreements held at March 31, 2017.
Investment Transactions and Income:
Investment transactions are recorded on the trade date. Dividend income is recorded on the ex-dividend date. In certain foreign markets where declaration of a dividend follows the ex-dividend date, the dividend will be recorded when the Fund is notified of the declaration date. Realized gains and losses from investment transactions are calculated based on the cost of the specific security (also known as identified cost basis). Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount using the effective yield method.
Expense, Investment Income and Gain/Loss Allocation:
Each Fund pays the expenses that are directly related to its operations, such as custodian fees or advisory fees. Expenses incurred by the Trust, such as trustee or legal fees, are allocated among each of the Funds in the Trust either proportionately based upon each Fund’s relative net assets or using another reasonable basis such as equally across all Funds in the Trust, depending on the nature of the expense. Individual share classes within a Fund are charged expenses specific to that class, such as distribution fees and transfer agent fees. Within a Fund, expenses other than class specific expenses are allocated daily to each class based upon the proportion of relative net assets. Investment income and realized and unrealized gains or losses are allocated to each class of shares based on relative net assets.
Real Estate Investment Trusts:
The Funds may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. Dividends paid by a REIT, other than capital gain distributions, will be taxable as ordinary income up to the amount of the REIT’s current and accumulated earnings and profits. Capital gain dividends paid by a REIT to a fund will be treated as long term capital gains by the Fund and, in turn, may be distributed by the Fund to its shareholders as a capital gain distribution. Distributions received from a REIT in excess of its income are recorded as a return of capital and a reduction to the cost basis of the REIT.
Distributions to Shareholders:
Each Fund pays out any income that it receives, less expenses, in the form of dividends and capital gain distributions to its shareholders. Income dividends and capital gain distributions for each Fund are declared and paid at least annually. Distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions are calculated based on federal income tax regulations, which may differ from US GAAP. These “book/tax” differences may be either temporary or permanent in nature. To the extent these differences are determined, as of the end of the tax year, to be
55 |
NOTES TO FINANCIAL STATEMENTS |
permanent, they are reclassified within a Fund’s capital accounts based on their federal tax basis treatment. These differences are primarily due to differing book and tax treatments in the timing and/or treatment of the recognition of net investment income or gain and losses, including foreign currency gains and losses, foreign taxes, partnership transactions and non-deductible expenses.
For the year ended March 31, 2017, permanent difference reclassification amounts were as follows:
Decrease Paid in Capital | Increase Undistributed Net Investment Income/(Loss) | Increase Accumulated Realized Gain/(Loss) | ||||||||||
Emerging Markets Equity Fund | $(2,882) | $(384,161) | $387,043 | |||||||||
Emerging Markets Small Cap Equity Fund | — | 12,773 | (12,773) | |||||||||
Global Opportunities Fund | — | (2,725) | 2,725 | |||||||||
International Opportunities Fund | — | (94,291) | 94,291 |
3. Agreements and Other Transactions with Affiliates:
The Trust has entered into investment advisory agreements with RBC GAM (US) under which RBC GAM (US) manages each Fund’s assets and furnishes related office facilities, equipment, research and personnel. The agreements require each Fund to pay RBC GAM (US) a monthly fee based upon average daily net assets. Under the terms of the advisory contracts, RBC GAM (US) is entitled to receive fees based on a percentage of the average daily net assets of each of the Funds as follows:
Annual Rate | ||
Emerging Markets Equity Fund | 0.95% | |
Emerging Markets Small Cap Equity Fund | 1.25% | |
Global Opportunities Fund | 0.85% | |
International Opportunities Fund | 0.80% |
RBC GAM (US) has contractually agreed to waive fees and/or make payments in order to keep total operating expenses (excluding certain fees such as interest, taxes and acquired fund fees and expenses) of Class A, Class I and Class R6 shares of each Fund to the following levels:
Class A Annual Rate | Class I Annual Rate | Class R6 Annual Rate | ||||
Emerging Markets Equity Fund | 0.975% | 0.725% | 0.725% | |||
Emerging Markets Small Cap Equity Fund | 1.85% | 1.60% | N/A | |||
Global Opportunities Fund | N/A | 1.05% | 1.00% | |||
International Opportunities Fund | N/A | 1.00% | 0.95% |
This expense limitation agreement is in place until July 31, 2018 (December 31, 2017 for Emerging Markets Equity Fund). Each Fund will carry forward, for a period not to exceed 3 years from the date on which a waiver or reimbursement is made by RBC GAM (US), any expenses in excess of the expense limitation and repay RBC GAM (US) such amounts, provided the Fund is able to effect such repayment and remain in compliance with the expense limitation.
56 |
NOTES TO FINANCIAL STATEMENTS |
At March 31, 2017, the amounts subject to possible recoupment under the expense limitation agreement were:
FYE 3/31/15 | FYE 3/31/16 | FYE 3/31/17 | Total | |||||||||||||
Emerging Markets Equity Fund | $201,948 | $338,439 | $785,515 | $1,325,902 | ||||||||||||
Emerging Markets Small Cap Equity Fund | 202,750 | 171,048 | 159,332 | 533,130 | ||||||||||||
Global Opportunities Fund | 70,819 | 150,126 | 129,225 | 350,170 | ||||||||||||
International Opportunities Fund | 72,565 | 159,942 | 152,817 | 385,324 |
RBC GAM (US) may also voluntarily waive and/or reimburse operating expenses of any Fund from time to time. Any such voluntary program may be changed or eliminated at any time without notice, and expenses waived under such program are not subject to recoupment. There were no voluntary waivers for the year ended March 31, 2017.
The Funds are sub-advised by RBC GAM (UK), which is a wholly-owned subsidiary of Royal Bank of Canada, which is the parent company of the Advisor. The Sub-Advisor is paid by the Advisor out of the advisory fee paid by the Funds to the Advisor.
RBC GAM (US) serves as co-administrator to the Funds. BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”) serves as co-administrator and fund accounting agent. Services provided under the administrative services contract include providing day-to-day administration of matters related to the Funds, maintenance of their records and the preparation of reports. Under the terms of the administrative services contract, RBC GAM (US) does not receive a fee for its role as co-administrator. BNY Mellon receives a fee for its services payable by each Fund based on each Fund’s average net assets. BNY Mellon’s fee is included with “Accounting fees” in the Statements of Operations.
Certain Officers and Trustees of the Trust are affiliated with the Advisor. Such Officers and Trustees receive no compensation from the Funds for serving in their respective roles.
The Trust currently pays each of the independent Trustees (Trustees of the Trust who are not directors, officers or employees of the Advisor, either Co-Administrator or Distributor) an annual retainer of $49,000 ($46,000 prior to October 1, 2016). The Board Chairperson and Audit Committee Chairperson each receive an additional retainer of $2,500 annually, and all other trustees serving as Chair of a Board committee each receive an additional retainer of $1,000 annually. In addition, Independent Trustees receive a quarterly meeting fee of $6,500 ($6,000 prior to October 1, 2016) for each in-person Board meeting attended, a meeting fee of $1,500 for each telephonic or Special Board meeting attended, a $1,500 fee for each Board committee meeting attended, and are reimbursed for all out-of-pocket expenses relating to attendance at such meetings. These amounts are included in the Statement of Operations in “Trustees’ fees”.
In conjunction with the launch of each of the Funds, the Advisor invested seed capital to provide the Fund with each of the Fund’s initial investment assets. The table below shows, as of March 31, 2017, each Fund’s net assets, the shares of each Fund held by the Advisor, and the percent of total net assets represented by the Advisor’s investment.
Net Assets | Shares held by Advisor | % of Fund Net Assets | ||||||||||
Emerging Markets Small Cap Equity Fund | 5,531,821 | 518,319 | 95.1% | |||||||||
Global Opportunities Fund | 7,112,445 | 511,036 | 81.3% | |||||||||
International Opportunities Fund | 25,156,169 | 944,273 | 36.4% |
4. Fund Distribution:
Each of the Funds has adopted a Master Distribution 12b-1 Plan (the “Plan”) in which Quasar Distributors LLC (the “Distributor”) acts as the Funds’ distributor. The Plan permits each Fund to make payments for or to reimburse the Distributor for distribution-related costs and expenses of marketing shares of Class A covered under the Plan, and/or for providing shareholder services. The Plan does not apply to Class I or Class R6.
57 |
NOTES TO FINANCIAL STATEMENTS |
Under the 12b-1 plan, the maximum fee rate for Class A shares is 0.50%. Currently the Board of Trustees has approved an annual limit of 0.25%.
Plan fees are based on average daily net assets of Class A. Up to 0.25% of each Plan fee may be designated as a Service Fee, as defined by the applicable rules of the Financial Industry Regulatory Authority. The Distributor, subject to applicable legal requirements, may waive a Plan fee voluntarily, in whole or in part. For the year ended March 31, 2017, there were no fees waived by the Distributor.
For the year ended March 31, 2017, the Distributor received commissions of $5,263 from front-end sales charges of Class A shares of the Funds, of which $984 was paid to affiliated broker-dealers, and the remainder was either paid to unaffiliated broker-dealers or retained by the Distributor.
The Distributor did not receive any CDSC fees from Class A shares of the Funds during the year ended March 31, 2017.
5. Securities Transactions:
The cost of securities purchased and proceeds from securities sold (excluding securities maturing less than one year from acquisition) for the year ended March 31, 2017 were as follows:
Purchases | Sales | |||||||
Emerging Markets Equity Fund | $ | 168,398,162 | $ | 24,785,148 | ||||
Emerging Markets Small Cap Equity Fund | 2,380,155 | 1,873,074 | ||||||
Global Opportunities Fund | 2,949,305 | 2,060,124 | ||||||
International Opportunities Fund | 24,939,374 | 6,563,160 |
6. Capital Share Transactions:
The Trust is authorized to issue an unlimited number of shares of beneficial interest (“shares outstanding”) without par value. Transactions in capital stock of the Funds are summarized below:
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | |||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||
Class A | ||||||||||||||||
Proceeds from shares issued | $ | 5,165,315 | $ | 1,512,867 | $ | 5,000 | $ | 4,712 | ||||||||
Distributions reinvested | 29,023 | 39,863 | 99,845 | 24,467 | ||||||||||||
Cost of shares redeemed | (3,042,950 | ) | (1,514,293 | ) | (5,267 | ) | (130,922 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Change in Class A | $ | 2,151,388 | $ | 38,437 | $ | 99,578 | $ | (101,743 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Proceeds from shares issued | $ | 142,074,792 | $ | 72,279,556 | $ | 312,698 | $ | 16,950 | ||||||||
Distributions reinvested | 1,112,649 | 159,606 | 106,882 | 30,848 | ||||||||||||
Cost of shares redeemed | (11,949,468 | ) | (2,281,413 | ) | (104,474 | ) | (125,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Change in Class I | $ | 131,237,973 | $ | 70,157,749 | $ | 315,106 | $ | (77,202 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Class R6 | ||||||||||||||||
Proceeds from shares issued | $ | 21,110,000 | — | — | — | |||||||||||
Distributions reinvested | 149,036 | — | — | — | ||||||||||||
Cost of shares redeemed | (10,351 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in Class R6 | $ | 21,248,685 | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets resulting from capital transactions | $ | 154,638,046 | $ | 70,196,186 | $ | 414,684 | $ | (178,945 | ) | |||||||
|
|
|
|
|
|
|
|
58 |
NOTES TO FINANCIAL STATEMENTS |
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | |||||||||||||||||||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Issued | 490,807 | 150,642 | 546 | 554 | ||||||||||||||||||||||||||||
Reinvested | 2,910 | 4,342 | 10,724 | 2,781 | ||||||||||||||||||||||||||||
Redeemed | (283,934 | ) | (155,292 | ) | (569 | ) | (14,588 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class A | 209,783 | (308 | ) | 10,701 | (11,253 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Issued | 13,701,422 | 7,409,271 | 34,249 | 1,801 | ||||||||||||||||||||||||||||
Reinvested | 110,055 | 17,162 | 11,493 | 3,505 | ||||||||||||||||||||||||||||
Redeemed | (1,147,574 | ) | (229,770 | ) | (10,260 | ) | (13,966 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class I | 12,663,903 | 7,196,663 | 35,482 | (8,660 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Issued | 2,073,683 | — | — | — | ||||||||||||||||||||||||||||
Reinvested | 14,669 | — | — | — | ||||||||||||||||||||||||||||
Redeemed | (999 | ) | — | — | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class R6 | 2,087,353 | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in shares resulting from capital transactions | 14,961,039 | 7,196,355 | 46,183 | (19,913 | ) | |||||||||||||||||||||||||||
|
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|
|
|
|
|
| |||||||||||||||||||||||||
Global Opportunities Fund | International Opportunities Fund | |||||||||||||||||||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 1,197,391 | $ | 69,951 | $ | 18,903,370 | $ | 505,607 | ||||||||||||||||||||||||
Distributions reinvested | 42,516 | 62,197 | 110,935 | 97,891 | ||||||||||||||||||||||||||||
Cost of shares redeemed | (10,645 | ) | (850 | ) | (265,440 | ) | (765 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class I | $ | 1,229,262 | $ | 131,298 | $ | 18,748,865 | $ | 602,733 | ||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 10,000 | — | $ | 10,000 | — | ||||||||||||||||||||||||||
Distributions reinvested | — | — | 4 | — | ||||||||||||||||||||||||||||
Cost of shares redeemed | — | — | — | — | ||||||||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class R6 | $ | 10,000 | — | $ | 10,004 | — | ||||||||||||||||||||||||||
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|
|
|
|
|
| |||||||||||||||||||||||||
Change in net assets resulting from capital transactions | $ | 1,239,262 | $ | 131,298 | $ | 18,758,869 | $ | 602,733 | ||||||||||||||||||||||||
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|
|
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| |||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Issued | 111,192 | 7,130 | 2,031,630 | 48,876 | ||||||||||||||||||||||||||||
Reinvested | 4,000 | 6,257 | 12,205 | 10,560 | ||||||||||||||||||||||||||||
Redeemed | (1,007 | ) | (81 | ) | (29,014 | ) | (74 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Change in Class I | 114,185 | 13,306 | 2,014,821 | 59,362 | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Issued | 960 | — | 1,098 | — | ||||||||||||||||||||||||||||
Reinvested | — | — | — | — | ||||||||||||||||||||||||||||
Redeemed | — | — | — | — | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Change in Class R6 | 960 | — | 1,098 | — | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Change in shares resulting from capital transactions | 115,145 | 13,306 | 2,015,919 | 59,362 | ||||||||||||||||||||||||||||
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59 |
NOTES TO FINANCIAL STATEMENTS |
7. Federal Income Taxes:
It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined under Subchapter M of the Internal Revenue Code, and to distribute substantially all of its net investment income and net realized capital gains. Therefore, no federal tax liability is recorded in the financial statements of each Fund.
Fund Management has analyzed the Funds’ tax positions taken or expected to be taken on federal income tax returns for all open tax years (for the tax years ended March 31 of the years 2015, 2016 and 2017 for Emerging Markets Equity Fund, Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and International Opportunities Fund), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
As of March 31, 2017, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for each Fund were as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||
Emerging Markets Equity Fund | $ | 230,353,254 | $ | 26,109,858 | $ | (4,469,331 | ) | $ | 21,640,527 | |||||||
Emerging Markets Small Cap Equity Fund | 5,387,422 | 811,264 | (609,895 | ) | 201,369 | |||||||||||
Global Opportunities Fund | 6,004,832 | 1,032,466 | (147,770 | ) | 884,696 | |||||||||||
International Opportunities Fund | 24,417,491 | 1,876,635 | (890,803 | ) | 985,832 |
The difference between book basis and tax basis unrealized appreciation/depreciation is attributable to the tax deferral of losses on wash sales, passive foreign investment company mark-to-market adjustment and cumulative partnership basis adjustment.
The tax character of distributions during the year ended March 31, 2017 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Long-Term Capital Gains | Total Distributions Paid | ||||||||||
Emerging Markets Equity Fund | $1,369,659 | $241,505 | $1,611,164 | |||||||||
Emerging Markets Small Cap Equity Fund | 206,727 | — | 206,727 | |||||||||
Global Opportunities Fund | 42,516 | — | 42,516 | |||||||||
International Opportunities Fund | 110,940 | — | 110,940 |
The tax character of distributions during the year ended March 31, 2016 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Long-Term Capital Gains | Total Distributions Paid | ||||||||||
Emerging Markets Equity Fund | $184,078 | $67,181 | $251,259 | |||||||||
Emerging Markets Small Cap Equity Fund | 46,953 | 8,363 | 55,316 | |||||||||
Global Opportunities Fund | 62,197 | — | 62,197 | |||||||||
International Opportunities Fund | 97,891 | — | 97,891 |
60 |
NOTES TO FINANCIAL STATEMENTS |
As of March 31, 2017, the components of accumulated earnings/(losses) on a tax basis were as follows:
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | Global Opportunities Fund | International Opportunities Fund | |||||||||||||
Undistributed Ordinary Income | $ | 364,266 | $ | 81,903 | $ | 5,456 | $ | 36,419 | ||||||||
Undistributed Long Term Gain | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated Earnings | 364,266 | 81,903 | 5,456 | 36,419 | ||||||||||||
Distributions Payable | — | — | — | — | ||||||||||||
Accumulated Capital Loss Carryforwards | — | (55,578 | ) | (41,327 | ) | (381,286 | ) | |||||||||
Deferred Qualified Late-Year Losses | (501,701 | ) | — | (60,971 | ) | — | ||||||||||
Unrealized Appreciation/(Depreciation) | 21,370,233 | 159,772 | 884,442 | 986,079 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Accumulated Earnings/(Losses) | $ | 21,232,798 | $ | 186,097 | $ | 787,600 | $ | 641,212 | ||||||||
|
|
|
|
|
|
|
|
As of March 31, 2017, the International Opportunities Fund had a short-term capital loss carryforward of $286,197, and Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and International Opportunities Fund had a long-term capital loss carryforward of $55,578, $41,327 and $95,089, respectively, available to offset future realized capital gains in accordance with the Regulated Investment Company Modernization Act of 2010. These capital loss carryforwards are not subject to expiration. During the year ended March 31, 2017, the Global Opportunities Fund utilized capital losses in the amount of $39,948.
Under current tax law, capital losses realized after October 31 and ordinary losses after December 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The Emerging Markets Equity Fund and Global Opportunities Fund deferred long-term qualified late-year capital losses of $336,667 and $(18,904), respectively and short-term qualified late-year capital losses of $165,034 and $79,875, respectively, which will be treated as arising on the first business day of the year ended March 31, 2018.
8. Market Timing:
The Trust strongly discourages attempts at market timing by Fund shareholders. Each Fund charges a redemption fee of 2% of the value of Class A and Class I shares redeemed or exchanged within 30 days of purchase, and may also limit the number of exchanges that may be made between Funds to five (5) per calendar year. When assessed, the redemption fee is deducted from the redemption proceeds and retained by the Fund, not by the Advisor. This redemption fee is not charged in certain situations, such as where the redemption results from an automatic reinvestment or asset re-allocation not specifically directed by the shareholder. The Trust also reserves the right to reject any Fund purchase order made by persons deemed to be market timers. The Funds’ prospectus contains a full description of the Trust’s policies on market timing and/or excessive trading. The redemption fee is recorded as a credit to capital and is included in the capital transactions on the Statements of Changes in Net Assets.
During the year ended March 31, 2017, redemption fees were collected by the Emerging Markets Equity Fund and Global Opportunities Fund in the amount of $2,927 and $1, respectively. There were no redemption fees collected by the other funds. Redemption fees collected by the Funds are included in the cost of shares redeemed on the Statements of Changes in Net Assets.
61 |
NOTES TO FINANCIAL STATEMENTS |
9. Soft Dollars:
The term soft dollars generally refers to arrangements in which services other than trade execution are received from a broker-dealer. Federal securities laws permit a fund advisor to incur commission charges on behalf of a fund that are higher than another broker-dealer would have charged if the advisor believes the charges are reasonable in relation to the brokerage and research services received. RBC GAM (US) and RBC GAM (UK) have a fiduciary duty to the shareholders of the Funds to seek the best execution for all of the Funds’ securities transactions. Fund Management believes that using soft dollars to purchase brokerage and research services may, in certain cases, be in a Fund’s best interest. During the year ended March 31, 2017, the Funds used soft dollar arrangements on a limited basis. Fund Management continues to closely monitor its current use of soft dollars, in addition to regulatory developments in this area for any possible impact on Fund policies.
10. Subsequent Events:
Fund Management has evaluated the impact of subsequent events of the Funds and has determined that there are no subsequent events that require recognition or disclosure in the financial statements.
62 |
To the Trustees of RBC Funds Trust and the Shareholders of RBC Emerging Markets Equity Fund, RBC Emerging Markets Small Cap Equity Fund, RBC Global Opportunities Fund, and RBC International Opportunities Fund
In our opinion, the accompanying statements of assets and liabilities, including the schedule of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the RBC Emerging Markets Equity Fund, RBC Emerging Markets Small Cap Equity Fund, RBC Global Opportunities Fund, and RBC International Opportunities Fund (the “Funds,” a series of RBC Funds Trust) as of March 31, 2017, the results of each of their operations, the changes in each of their net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of March 31, 2017 by correspondence with the custodian, brokers and transfer agent, and the application of alternative auditing procedures where such confirmations had not been received, provide a reasonable basis for our opinion. The statements of changes in net assets and the financial highlights of the Funds for the periods ended March 31, 2016 and prior were audited by another independent registered public accounting firm whose report dated May 24, 2016 expressed an unqualified opinion on those statements and highlights.
PricewaterhouseCoopers LLP
Minneapolis, MN.
May 25, 2017
63 |
For the year ended March 31, 2017, certain dividends paid by the Funds may be subject to a maximum tax rate of 20% as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The Funds intend to report the maximum amount allowable as taxed at a maximum rate of 20%. Complete information will be reported in conjunction with your 2017 Form 1099-DIV.
All reportings are based on financial information available as of the date of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the year ended March 31, 2017, the following Funds had a qualified interest income percentage of:
Qualified | ||||
Interest | ||||
Income | ||||
Emerging Markets Equity Fund | 1.43% | |||
Emerging Markets Small Cap Equity Fund | 0.09% | |||
Global Opportunities Fund | 0.47% | |||
International Opportunities Fund | 0.23% |
For the year ended March 31, 2017, the following Funds had a qualified short term gains percentage of:
Qualified | ||||
Short-term | ||||
Gains | ||||
Emerging Markets Equity Fund | 22.03% | |||
Emerging Markets Small Cap Equity Fund | 23.47% |
For corporate shareholders, the following percentage of the total ordinary income distributions paid during the fiscal year ended March 31, 2017 qualify for the corporate dividends received deduction:
Dividends | ||||
Received | ||||
Deduction | ||||
Global Opportunities Fund | 76.04% |
For the year ended March 31, 2017, the following Funds had a qualified dividend income percentage of:
Qualified | ||||
Dividend | ||||
Income | ||||
Emerging Markets Equity Fund | 93.26% | |||
Emerging Markets Small Cap Equity Fund | 30.27% | |||
Global Opportunities Fund | 100.00% | |||
International Opportunities Fund | 100.00% |
For the year ended March 31, 2017, the following Funds had a qualified foreign source income percentage of:
Qualified | ||||
Foreign | ||||
Source | ||||
Income | ||||
Emerging Markets Equity Fund | 100.00% | |||
Emerging Markets Small Cap Equity Fund | 38.87% | |||
International Opportunities Fund | 100.00% |
64 |
OTHER FEDERAL INCOME TAX INFORMATION (UNAUDITED) |
The Funds have elected to pass through to their shareholders the foreign taxes paid for the year ended March 31, 2017 as follows:
Foreign | Foreign | |||||||
Taxes | Source | |||||||
Paid | Income | |||||||
Emerging Markets Equity Fund | $275,120 | $2,914,070 | ||||||
Emerging Markets Small Cap Equity Fund | 15,926 | 136,041 | ||||||
International Opportunities Fund | 28,338 | 390,127 |
Pursuant to Internal Revenue Code Section 852(b)(3), Emerging Markets Equity Fund reported $241,505 as long-term capital gain distributions for the year ended March 31,2016.
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Independent Trustees(1)(2)
Lucy Hancock Bode (65)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Healthcare consultant (self-employed) (1986 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: BioSignia (2006 to 2010); Franklin Street Partners (2014 to present)
Leslie H. Garner Jr. (66)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: President and Chief Executive Officer, The Greater Cedar Rapids Community Foundation (2010 to present); President, Cornell College (1994 to 2010)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Ronald James (66)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Faculty member (part time), University of St. Thomas (2004 to present); President and Chief Executive Officer, Center for Ethical Business Cultures (2000 to January 2017)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Best Buy Co. Inc. (2004 to 2013); Bremer Financial Corporation (2004 to present)
John A. MacDonald (68)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Vice President and Treasurer, Hall Family Foundation (1988 to present); Chief Investment Officer, Chinquapin Trust Company (1999 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
H. David Rybolt (74)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Principal, HDR Associates (management-consulting) (1985 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
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MANAGEMENT (Unaudited) |
Independent Trustees(1)(2)
James R. Seward (64)
Position, Term of Office and Length of Time Served with the Trust: Chairman of the Board and Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Private investor (2000 to present); CFA (1987 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Brookdale Senior Living Inc. (2008 to present); Sooner Holdings (formerly Syntroleum Corporation) (1988 to 2015)
William B. Taylor (71)
Position, Term of Office and Length of Time Served with the Trust: Trustee since September 2005
Principal Occupation(s) During Past 5 Years: Consultant (2003 to present); Partner, Ernst & Young LLP (1982 to 2003)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: National Association of Corporate Directors - Heartland Chapter (2013 to present); William Henry Insurance, LLC (2005 to present); Balance Innovations LLC (2014 to present); Kansas City Symphony (1995 to present); Kansas University Endowment Association (2010 to present)
Interested Trustees(1)(2)(3)
Kathleen A. Gorman (53)(5)
Position, Term of Office and Length of Time Served with the Trust: President and Chief Executive Officer, RBC Funds (2012 to present); Chief Compliance Officer, RBC Funds (2006 to 2012); Director of Regulatory Administration, RBC Global Asset Management (U.S.) Inc. (2007 to 2012)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Executive Officers(1)(3)(4)
Kathleen A. Gorman (53)
Position, Term of Office and Length of Time Served with the Trust: President and Chief Executive Officer since September 2012
Principal Occupation(s) During Past 5 Years: President and Chief Executive Officer, RBC Funds (2012 to present); Chief Compliance Officer, RBC Funds (2006 to 2012); Director of Regulatory Administration, RBC Global Asset Management (U.S.) Inc. (2007 to 2012)
Kathleen A. Hegna (50)
Position, Term of Office and Length of Time Served with the Trust: Chief Financial Officer and Principal Accounting Officer since May 2009 and Treasurer since March 2014
Principal Occupation(s) During Past 5 Years: Associate Vice President and Director, Mutual Fund Services, RBC Global Asset Management (U.S.) Inc. (2009 to present)
67 |
MANAGEMENT (Unaudited) |
Executive Officers(1)(3)(4)
Christina M. Weber (48)
Position, Term of Office and Length of Time Served with the Trust: Chief Compliance Officer since December 2012 and Assistant Secretary since March 2013
Principal Occupation(s) During Past 5 Years: Chief Compliance Officer, RBC Funds (2012 to present); Senior Compliance Officer, RBC Funds (March 2012 to December 2012); Compliance Manager, Minnesota Life Insurance Company (2006 to 2012)
Jay Jackson (39)
Position, Term of Office and Length of Time Served with the Trust: Chief Legal Officer and Secretary since December 2015
Principal Occupation(s) During Past 5 Years: Associate General Counsel, RBC Global Asset Management (U.S.) Inc. (2011 to present)
(1) | Except as otherwise noted, the address of each Trustee/Officer is RBC Funds Trust, 50 South Sixth Street, Suite 2350, Minneapolis, Minnesota 55402. |
(2) | All Trustees must retire on or before December 31 of the year in which they reach age 75. The Board may temporarily waive this requirement when necessary to avoid depriving the Board of a Trustee with critical skills. |
(3) | On December 31, 2009, Voyageur Asset Management Inc. changed its name to RBC Global Asset Management (U.S.) Inc. Any references to RBC Global Asset Management (U.S.) Inc. for prior periods are deemed to be references to the prior entity. |
(4) | Each officer serves in such capacity for an indefinite period of time until his or her removal, resignation or retirement. |
(5) | Kathleen A. Gorman has been determined to be an interested Trustee by virtue of her position with the Advisor. |
The Funds’ Statement of Additional Information includes information about the Funds’ Trustees. To receive your free copy of the Statement of Additional Information, call toll free: 1-800-422-2766.
68 |
The Funds offer three share classes: Class A, Class I and Class R6.
Class A
Class A shares, offered by Emerging Markets Equity Fund and Emerging Markets Small Cap Equity Fund, are available for purchase primarily through investment advisors, broker-dealers, banks and other financial services intermediaries. Class A shares of the Funds are currently subject to a maximum up-front sales charge of 5.75% and a 1.00% CDSC for redemption within 12 months of a $1 million or greater purchase. Class A shares currently include a 0.25% (25 bps) annual 12b-1 service and distribution fee.
Class I
Class I shares are available in all of the Funds and are intended for investors meeting certain minimum investment thresholds. This share class does not have an up-front sales charge (load) or a 12b-1 service and distribution fee.
Class R6
Class R6 shares are available in all Funds except Emerging Markets Small Cap Equity Fund and are intended for investors meeting certain minimum investment thresholds. This share class does not have an up-front sales charge (load) or a 12b-1 service and distribution fee.
69 |
Shareholder Expense Examples
As a shareholder of the RBC Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) and (2) ongoing costs, including management fees; 12b-1 distribution and service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the RBC Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from October 1, 2016 through March 31, 2017.
Actual Expenses and Performance
The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Beginning Account Value 10/1/16 | Ending Account Value 3/31/17 | Expenses Paid During Period* 10/1/16-3/31/17 | Annualized Expense Ratio During Period 10/1/16-3/31/17 | ||||||||||||||||||||||
Emerging Markets Equity Fund | Class A | $1,000.00 | $1,026.90 | $4.95 | 0.98 | % | |||||||||||||||||||
Class I | 1,000.00 | 1,026.50 | 3.68 | 0.73 | % | ||||||||||||||||||||
Class R6 | 1,000.00 | 1,027.40 | 3.67 | 0.73 | % | ||||||||||||||||||||
Emerging Markets Small Cap Equity Fund | Class A | 1,000.00 | 1,020.00 | 9.32 | 1.85 | % | |||||||||||||||||||
Class I | 1,000.00 | 1,020.70 | 8.06 | 1.60 | % | ||||||||||||||||||||
Global Opportunities Fund | Class I | 1,000.00 | 1,057.90 | 5.39 | 1.05 | % | |||||||||||||||||||
Class R6 | 1,000.00 | 1,057.70 | 5.13 | 1.00 | % | ||||||||||||||||||||
International Opportunities Fund | Class I | 1,000.00 | 1,001.00 | 4.99 | 1.00 | % | |||||||||||||||||||
Class R6 | 1,000.00 | 1,001.50 | 4.74 | 0.95 | % |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 182/365 (to reflect one half year period).
70 |
SUPPLEMENTAL INFORMATION (UNAUDITED) |
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on each RBC Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 10/1/16 | Ending Account Value 3/31/17 | Expenses Paid During Period* 10/1/16-3/31/17 | Annualized Expense Ratio During Period 10/1/16-3/31/17 | ||||||||||||||||||||||
Emerging Markets Equity Fund | Class A | $ | 1,000.00 | $ | 1,020.05 | $ | 4.93 | 0.98 | % | ||||||||||||||||
Class I | 1,000.00 | 1,021.30 | 3.67 | 0.73 | % | ||||||||||||||||||||
Class R6 | 1,000.00 | 1,021.31 | 3.66 | 0.73 | % | ||||||||||||||||||||
Emerging Markets Small Cap Equity Fund | Class A | 1,000.00 | 1,015.71 | 9.30 | 1.85 | % | |||||||||||||||||||
Class I | 1,000.00 | 1,016.95 | 8.05 | 1.60 | % | ||||||||||||||||||||
Global Opportunities Fund | Class I | 1,000.00 | 1,019.70 | 5.29 | 1.05 | % | |||||||||||||||||||
Class R6 | 1,000.00 | 1,019.95 | 5.04 | 1.00 | % | ||||||||||||||||||||
International Opportunities Fund | Class I | 1,000.00 | 1,019.95 | 5.04 | 1.00 | % | |||||||||||||||||||
Class R6 | 1,000.00 | 1,020.19 | 4.78 | 0.95 | % |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 182/365 (to reflect one half year period).
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RBC Funds
P.O. Box 701
Milwaukee, WI 53201-0701
800-422-2766
www.rbcgam.us
Performance data represents past performance and does not guarantee future results. The principal value of an investment and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
This report and the financial statements contained herein are provided for the information of RBC Funds shareholders. This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus, which contains information concerning investment objectives, risks, charges and expenses of the funds. Please read the prospectus carefully before investing.
This report and the financial statements contained herein are not intended to be a forecast of future events, a guarantee of future results, or investment advice. There is no assurance that certain securities will remain in or out of each fund’s portfolio. The views expressed in this report reflect those of the portfolio managers through the year ended March 31, 2017.
NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
RBC Global Asset Management (U.S.) Inc. serves as investment advisor for the RBC Funds. RBC Funds are distributed by Quasar Distributors LLC, an affiliate of U.S. Bancorp Fund Services, LLC.
The RBC Funds are pleased to offer shareholder reports printed entirely on Forest Stewardship Council® certified paper. FSC® certification ensures that the paper used in this report contains fiber from well-managed and responsibly harvested forests that meet strict environmental and socioeconomic standards.
RBCF-EM AR 03-17
RBC Funds | ||||||||||||
About Your Annual Report |
This annual report includes detailed information about your Fund including financial statements, performance, and a complete list of its holdings.
The RBC Funds compare their performance against various indices. Each of these indices is a widely recognized measure of return for the underlying category of securities. However, the indices are unmanaged, do not include fees, and cannot be invested in directly.
We hope the financial information presented will help you evaluate your investment in the RBC Funds. We also encourage you to read your Fund’s prospectus for further detail as to your Fund’s investment policies and risk profile. RBC Funds prospectuses and performance information subsequent to the date of this report are available on our website at www.rbcgam.us.
A description of the policies and procedures that your Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-422-2766; (ii) on the Fund’s website at www.rbcgam.us; and (iii) on the Securities and Exchange Commission’s (the “Commission”) website at http://www.sec.gov.
Information regarding how your Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) on the Fund’s website at www.rbcgam.us; and (ii) on the Commission’s website at http://www.sec.gov.
A schedule of each Fund’s portfolio holdings will be filed with the Commission for the first and third quarters of each fiscal year on Form N-Q. This information is available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room is available by calling 1-800-SEC-0330.
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Contents | ||||||||||||
Letter from the CIO | 1 | |||||||||||
3 | ||||||||||||
4 | ||||||||||||
Management Discussion and Analysis (Unaudited) | ||||||||||||
6 | ||||||||||||
- RBC Ultra-Short Fixed Income Fund | 8 | |||||||||||
Schedules of Portfolio Investments | 10 | |||||||||||
Financial Statements | ||||||||||||
- Statements of Assets and Liabilities | 21 | |||||||||||
23 | ||||||||||||
24 | ||||||||||||
Financial Highlights | 26 | |||||||||||
Notes to Financial Statements | 30 | |||||||||||
Report of Independent Registered Public Accounting Firm | 41 | |||||||||||
Other Federal Income Tax Information (Unaudited) | 42 | |||||||||||
43 | ||||||||||||
Share Class Information (Unaudited) | 46 | |||||||||||
Supplemental Information (Unaudited)
| 47 |
Dear Shareholder:
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)”) launched the RBC Short Duration Fixed Income Fund and RBC Ultra-Short Fixed Income Fund (the “Funds”) on December 30, 2013. We are pleased that the Funds now have three year track records of delivering what we see as high quality, diversified fixed income vehicles to clients seeking shorter duration investment solutions.
For the twelve-month period ended March 31, 2017, the Funds outperformed their benchmarks. The RBC Short Duration Fixed Income Fund had a net total return of 2.33% (Class I shares) compared to a return of 0.70% for the BofA Merrill Lynch 1-3 Year U.S. Corporate/Government Bond Index. The RBC Ultra-Short Fixed Income Fund had a net total return of 1.74% (Class I shares) compared to a return of 0.63% for the BofA Merrill Lynch U.S. 1-Year Treasury Bill Index.
During the last year, the U.S. Treasury Yield Curve shifted upward and steepened slightly. The increase was largely due to improved U.S. economic performance and growing inflation expectations. These factors led the Federal Reserve (Fed) to increase their target Fed Funds rate twice over the year. Going forward, we expect the Fed to continue tightening at a slow and measured pace, and look for possibly two more rate hikes in 2017.
In the corporate sector, option adjusted spreads, a measure of a security’s risk, rebounded considerably following highs in early 2016. The declining spreads were driven primarily by improving commodity prices, which alleviated concerns of credit downgrades in the Energy and Basic Materials sectors. Indeed, these sectors ended 2016 on a strong rally as market fears abated and economic prospects improved. The Funds take a defensive approach to Energy and Basic Materials, typically avoiding lower quality issuers. Our positioning slightly detracted from performance, because we were not able to fully participate in the rally.
Looking forward, we will continue to seek opportunities to positively impact performance by focusing on well researched security selection opportunities and maintaining a well diversified portfolio of higher quality bonds. Thank you for your confidence and trust in the RBC Funds.
Sincerely,
Michael Lee, CFA CEO, President and Chief Investment Officer RBC Global Asset Management (U.S.) Inc.
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1 |
LETTER FROM THE CIO | ||||||||
Past performance is not a guarantee of future results.
Opinions expressed are subject to change, are not guaranteed, and should not be considered a recommendation to buy or sell any security.
Diversification does not assure a profit or protect against a loss in a declining market.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund invests in mortgage-related securities including pass-throughs and collateralized mortgage obligations, which include additional risks that an investor should be aware of such as credit risk, prepayment risk, possible illiquidity and default, and increased susceptibility to adverse economic developments. Investments in lower- and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. The Fund may invest in derivatives, including futures contracts, which involve risks different from and, in certain cases, greater than risks presented by more traditional investments. These risks are described more fully in the prospectus.
The BofA Merrill Lynch 1-3 Year U.S. Corporate/Government Bond Index tracks the performance of U.S. dollar-denominated, investment grade debt publicly issued in the U.S. domestic market, including U.S. Treasury, U.S. agency, foreign government, supranational, and corporate securities with a remaining term to final maturity less than three years. You cannot invest directly in an index.
The BofA Merrill Lynch U.S. 1-Year Treasury Bill Index comprises a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a newly selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, one year from the rebalancing date. You cannot invest directly in an index.
The U.S. Treasury Yield Curve represents the yield of a U.S. Treasury bond at different maturities. A U.S. Treasury bond is theoretically considered to be free of default risk, and represents the minimum yield investors are prepared to accept for bonds of different maturities.
Duration is a measure of price sensitivity of a debt security or a portfolio of debt securities relative to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates.
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2 |
RBC Global Asset Management (U.S.) Inc.(“RBC GAM (US)”) serves as the investment advisor to the RBC Funds. RBC GAM (US) employs a team approach to the management of the Funds, with no individual team member being solely responsible for the investment decisions. Each Fund’s management team has access to RBC GAM (US)’s investment research and other money management resources.
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Brian Svendahl, CFA Managing Director, Co-Head, U.S. Fixed Income Brian Svendahl oversees the fixed income research, portfolio management and trading at RBC GAM (US). In addition to shaping the firm’s overall fixed income philosophy and process, he is a portfolio manager for the Funds and many of RBC GAM (US)’s government mandates. Brian joined RBC GAM (US) in 2005 and most recently led the mortgage and government team before being promoted to Co-Head. Prior to joining RBC GAM (US), he held several risk management, research and trading positions at Wells Fargo. Brian’s experience also includes liability management and implementing balance sheet hedging strategies. He earned a BS in economics from the University of Minnesota and a BBA in finance and an MBA from the University of Minnesota Carlson School of Management. Brian is a CFA charterholder.
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Brandon T. Swensen, CFA Vice-President, Co-Head, U.S. Fixed Income Brandon Swensen oversees RBC GAM (US)’s fixed income research, portfolio management and trading. In addition to shaping the firm’s overall fixed income philosophy and process, he is a portfolio manager for the Funds and several cash management and core solutions. Brandon joined RBC GAM (US) in 2000 and most recently was a portfolio manager on the mortgage and government team before being promoted to Co-Head. He also held research analyst positions covering asset-backed securities and credit and served as a financial analyst for the firm. Brandon earned a BS in finance from St. Cloud State University and an MBA in finance from the University of St. Thomas. He is a CFA charterholder and member of the CFA Society of Minnesota.
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MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||
RBC Short Duration Fixed Income Fund
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Current income consistent with preservation of capital. |
Investment
| |||||||||||||||||||||||||||||||
BofA Merrill Lynch 1-3 Year U.S. Corporate/Government Bond Index |
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Benchmark
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Asset Allocation (as of 3/31/17) (% of Fund’s investments) | ||||||||||||||||||||||||||||||
AT&T, Inc., 5.20%, 3/15/20 |
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1.73 |
% |
Verizon Communications, Inc., 4.50%, 9/15/20 |
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1.40 |
% | Top Ten Holdings (excluding investment companies) (as of 3/31/17) (% of Fund’s net assets) | ||||||||||||||||||||||||
Freddie Mac Series 2012-K709, Class B, 3.74%, 4/25/45 | 1.51 | % | Santander Drive Auto Receivables Trust, Series 2015-1, Class C, 2.57%, 4/15/21 . | 1.38 | % | |||||||||||||||||||||||||||
Americredit Automobile Receivables Trust, Series 2016-2, Class B, 2.21%, 5/10/21 | 1.45 | % | Charter Communications Operating LLC, Charter Communications Operating Capital, 3.58%, 7/23/20 | 1.35 | % | |||||||||||||||||||||||||||
Freddie Mac Series 2011-K13, Class B, 4.61%, 1/25/48 | 1.43 | % | Newell Rubbermaid, Inc., 3.15%, 4/1/21. | 1.34 | % | |||||||||||||||||||||||||||
Shire Acquisitions Investments Ireland Designated Activity Co., 1.90%, 9/23/19 | 1.41 | % | Thermo Fisher Scientific, Inc., 3.30%, 2/15/22 | 1.34 | % | |||||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 10. |
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Growth of $10,000 Initial Investment Since Inception (12/30/13) | ||||||||||||||||||||||||||||||
The graph reflects an initial investment of $10,000 over the period from December 30, 2013 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.
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7 |
8 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||
RBC Ultra-Short Fixed Income Fund | ||||||||||||||||||||||||||||
Current income consistent with preservation of capital. |
Investment
| |||||||||||||||||||||||||||
BofA Merrill Lynch 1-Year US Treasury Bill Index |
| Benchmark | ||||||||||||||||||||||||||
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|
Asset Allocation (as of 3/31/17) (% of Fund’s investments) | ||||||||||||||||||||||||||
American Honda Finance Corp., 1.72%, 9/9/21 |
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2.06 |
% |
Ford Motor Credit Co. LLC, 2.55%, 10/5/18 |
|
1.72 |
% | Top Ten Holdings (excluding investment companies) (as of 3/31/17) (% of Fund’s net assets) | ||||||||||||||||||||
AT&T, Inc., 5.20%, 3/15/20 | 1.84 | % | Santander Drive Auto Receivables Trust, Series 2013-3, Class D, 2.42%, 4/15/19 | 1.71 | % | |||||||||||||||||||||||
Springleaf Mortgage Loan Trust, Series 2013-3A, Class A, 1.87%, 9/25/57 | 1.82 | % | Actavis Funding SCS, 2.35%, 3/12/18 | 1.71 | % | |||||||||||||||||||||||
General Motors Financial Co., Inc., 3.10%, 1/15/19 | 1.73 | % | Kraft Heinz Foods Co., 2.00%, 7/2/18 | 1.71 | % | |||||||||||||||||||||||
AmeriCredit Automobile Receivables Trust, Series 2014-3, Class C, 2.58%, 9/8/20 | 1.72 | % | Mercedes Benz Auto Lease Trust 2015-B, Class A4, 1.53%, 5/17/21 | 1.70 | % | |||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 16. |
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Growth of $10,000 Initial Investment Since Inception (12/30/13) | ||||||||||||||||||||||||||
The graph reflects an initial investment of $10,000 over the period from December 30, 2013 (commencement of operations) to March 31, 2017 and is based on Class I shares. The Fund’s total return includes reinvested dividends and capital gains. The Fund’s total return also includes operating expenses that reduce return while the total return of the index does not. The graph does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. | ||||||||||||||||||||||||||||
9 |
RBC Short Duration Fixed Income Fund
March 31, 2017
Principal Amount | Value | |||||
| ||||||
Asset Backed Securities — 23.16% | ||||||
$205,000 | Ally Auto Receivables Trust, Series 2016-3, Class C, 2.32%, 10/15/21 | $ | 205,836 | |||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2013-1, Class D, 2.09%, 2/8/19 | 150,320 | ||||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-2, Class B, 1.60%, 7/8/19 | 150,100 | ||||
156,000 | AmeriCredit Automobile Receivables Trust, Series 2014-2, Class C, 2.18%, 6/8/20 | 156,756 | ||||
250,000 | AmeriCredit Automobile Receivables Trust, Series 2014-3, Class C, 2.58%, 9/8/20 | 252,479 | ||||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-4, Class C, 2.47%, 11/9/20 | 151,400 | ||||
175,000 | AmeriCredit Automobile Receivables Trust, Series 2015-2, Class C, 2.40%, 1/8/21 | 176,480 | ||||
275,000 | AmeriCredit Automobile Receivables Trust, Series 2016-2, Class B, 2.21%, 5/10/21 | 275,640 | ||||
225,000 | AmeriCredit Automobile Receivables Trust, Series 2017-1, Class B, 2.30%, 2/18/22 | 224,831 | ||||
75,000 | CarMax Auto Owner Trust, Series 2014-2, Class D, 2.58%, 11/16/20 | 75,182 | ||||
170,000 | CarMax Auto Owner Trust, Series 2014-4, Class B, 2.20%, 9/15/20 | 170,600 | ||||
165,000 | CNH Equipment Trust, Series 2016-B, Class B, 2.20%, 10/15/23 | 163,758 | ||||
46,904 | Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB2, Class M1, 1.64%, 4/25/36(a) | 46,809 | ||||
90,000 | Ford Credit Auto Owner Trust, Series 2016-A, Class B, 1.94%, 7/15/21 | 89,631 | ||||
170,000 | GM Financial Automobile Leasing Trust, Series 2015-3, Class C, 2.98%, 11/20/19 | 171,713 | ||||
125,000 | GM Financial Automobile Leasing Trust, Series 2016-3, Class B, 1.97%, 5/20/20 | 124,166 | ||||
250,000 | Macquarie Equipment Funding Trust, Series 2014-A, Class B, 1.99%, 7/20/21(b) | 250,039 | ||||
87,883 | RASC Trust, Series 2005-KS9, Class M2, 1.41%, 10/25/35(a) | 87,972 | ||||
250,000 | Santander Drive Auto Receivables Trust, Series 2013-4, Class D, 3.92%, 1/15/20 | 254,249 | ||||
137,627 | Santander Drive Auto Receivables Trust, Series 2014-2, Class C, 2.33%, 11/15/19 | 138,204 | ||||
210,079 | Santander Drive Auto Receivables Trust, Series 2014-3, Class C, 2.13%, 8/17/20 | 210,615 | ||||
260,000 | Santander Drive Auto Receivables Trust, Series 2015-1, Class C, 2.57%, 4/15/21 | 262,065 | ||||
250,000 | Santander Drive Auto Receivables Trust, Series 2015-4, Class C, 2.97%, 3/15/21 | 253,311 | ||||
100,000 | Santander Drive Auto Receivables Trust, Series 2015-5, Class C, 2.74%, 12/15/21 | 100,643 | ||||
100,000 | Santander Drive Auto Receivables Trust, Series 2016-1, Class B, 2.47%, 12/15/20 | 100,864 |
10 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
$150,000 | Santander Drive Auto Receivables Trust, Series 2016-3, Class B, 1.89%, 6/15/21 | $ | 149,739 | |||
14,601 | Structured Asset Securities Corp., Class 2005-NC1, Class M1, 1.45%, 2/25/35(a) | 14,599 | ||||
|
| |||||
Total Asset Backed Securities (Cost $4,399,854) | 4,408,001 | |||||
|
| |||||
Collateralized Mortgage Obligations — 1.66% | ||||||
64,384 | JP Morgan Resecuritization Trust, Series 2014-1, Class 9A3, 1.07%, 12/26/35(a)(b) | 62,988 | ||||
28,149 | RBSSP Resecuritization Trust, Series 2009-6, Class 13A4, 3.03%, 8/26/35(a)(b) | 28,132 | ||||
54,761 | Springleaf Mortgage Loan Trust, Series 2013-2A, Class A, 1.78%, 12/25/65(a)(b) | 54,753 | ||||
171,749 | Springleaf Mortgage Loan Trust, Series 2013-3A, Class A, 1.87%, 9/25/57(a)(b) | 170,617 | ||||
|
| |||||
Total Collateralized Mortgage Obligations (Cost $318,406) | 316,490 | |||||
|
| |||||
Corporate Bonds — 70.54% | ||||||
Banks — 14.67% | ||||||
250,000 | Bank of America Corp, 2.15%, 11/9/20 | 247,744 | ||||
150,000 | Bank of America Corp, 2.60%, 1/15/19 | 151,562 | ||||
200,000 | Bank of Montreal, 1.84%, 8/27/21(a) | 201,835 | ||||
200,000 | Barclays Plc, 2.00%, 3/16/18 | 200,126 | ||||
120,000 | Citigroup, Inc., 1.92%, 4/8/19(a) | 120,600 | ||||
150,000 | Citigroup, Inc., 2.22%, 8/2/21(a) | 152,334 | ||||
100,000 | Goldman Sachs Group, Inc. (The), 2.00%, 4/25/19 | 99,815 | ||||
150,000 | Goldman Sachs Group, Inc. (The), 2.88%, 2/25/21 | 150,972 | ||||
150,000 | Goldman Sachs Group, Inc. (The), 5.38%, 3/15/20 | 162,612 | ||||
200,000 | Ing Groep NV, 3.15%, 3/29/22 | 200,466 | ||||
250,000 | JP Morgan Chase & Co., 2.30%, 8/15/21 | 247,404 | ||||
200,000 | Morgan Stanley, 6.25%, 8/28/17 | 203,830 | ||||
150,000 | Santander UK Group Holdings Plc, 2.88%, 10/16/20 | 150,156 | ||||
150,000 | Toronto-Dominion Bank, 2.15%, 4/7/21(a) | 152,640 | ||||
200,000 | Wachovia Corp., 1.40%, 6/15/17(a) | 200,075 | ||||
150,000 | Wells Fargo Bank NA, 2.15%, 12/6/19 | 150,505 | ||||
|
| |||||
2,792,676 | ||||||
|
| |||||
Consumer Discretionary — 12.31% | ||||||
100,000 | Constellation Brands, Inc., 7.25%, 5/15/17 | 100,561 | ||||
150,000 | Delta Air Lines, Inc., 2.88%, 3/13/20 | 151,214 | ||||
225,000 | Diamond 1 Finance Corp. / Diamond 2 Finance Corp., 3.48%, 6/1/19(b) | 230,560 | ||||
200,000 | Everett Spinco, Inc., 2.88%, 3/27/20(b) | 201,676 | ||||
200,000 | Ford Motor Credit Co. LLC, 2.02%, 5/3/19 | 199,041 |
11 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
$250,000 | Ford Motor Credit Co. LLC, 2.55%, 10/5/18 | $ | 251,985 | |||
250,000 | Ford Motor Credit Co. LLC, 3.20%, 1/15/21 | 252,677 | ||||
200,000 | Hewlett Packard Enterprise Co., 2.85%, 10/5/18(b) | 202,410 | ||||
100,000 | Hyundai Capital America, 2.00%, 3/19/18(b) | 100,090 | ||||
250,000 | Kraft Heinz Foods Co., 2.00%, 7/2/18 | 250,621 | ||||
100,000 | Reynolds American, Inc., 2.30%, 6/12/18 | 100,601 | ||||
200,000 | Tyson Foods, Inc., 2.65%, 8/15/19 | 202,201 | ||||
100,000 | Walgreens Boots Alliance, Inc., 2.60%, 6/1/21 | 100,121 | ||||
|
| |||||
2,343,758 | ||||||
|
| |||||
Consumer Non Cyclicals — 2.42% | ||||||
150,000 | Anheuser-Busch Inbev Finance, Inc., 2.65%, 2/1/21 | 151,128 | ||||
150,000 | Anheuser-Busch Inbev Worldwide Inc, 5.38%, 1/15/20 | 163,217 | ||||
150,000 | Molson Coors Brewing Co., 2.10%, 7/15/21 | 146,475 | ||||
|
| |||||
460,820 | ||||||
|
| |||||
Finance - Diversified — 7.03% | ||||||
200,000 | American International Group, Inc., 2.30%, 7/16/19 | 200,739 | ||||
200,000 | American Tower Corp. REIT, 4.50%, 1/15/18 | 204,268 | ||||
100,000 | General Motors Financial Co., Inc., 3.10%, 1/15/19 | 101,613 | ||||
200,000 | General Motors Financial Co., Inc., 3.20%, 7/6/21 | 200,759 | ||||
100,000 | General Motors Financial Co., Inc., 3.45%, 1/14/22 | 100,828 | ||||
50,000 | McGraw Hill Financial, Inc., 2.50%, 8/15/18 | 50,395 | ||||
125,000 | Regions Financial Corp., 2.25%, 9/14/18 | 125,385 | ||||
200,000 | Santander Holdings USA, Inc., 3.45%, 8/27/18 | 203,415 | ||||
150,000 | Synchrony Financial, 1.88%, 8/15/17 | 150,056 | ||||
|
| |||||
1,337,458 | ||||||
|
| |||||
Health Care — 9.08% | ||||||
250,000 | Actavis Funding SCS, 3.00%, 3/12/20 | 254,267 | ||||
250,000 | Baxalta, Inc., 2.88%, 6/23/20 | 253,513 | ||||
250,000 | Mylan NV, 3.00%, 12/15/18 | 252,901 | ||||
100,000 | Mylan NV, 3.15%, 6/15/21 | 100,368 | ||||
270,000 | Shire Acquisitions Investments Ireland Designated Activity Co., 1.90%, 9/23/19 | 268,054 | ||||
250,000 | Teva Pharmaceutical Finance Netherlands III BV, 1.70%, 7/19/19 | 247,150 | ||||
100,000 | Teva Pharmaceutical Finance Netherlands III BV, 2.20%, 7/21/21 | 96,506 | ||||
250,000 | Thermo Fisher Scientific, Inc., 3.30%, 2/15/22 | 254,911 | ||||
|
| |||||
1,727,670 | ||||||
|
| |||||
Industrials — 2.72% | ||||||
250,000 | Newell Rubbermaid, Inc., 3.15%, 4/1/21 | 255,385 | ||||
160,000 | Pentair Finance SA, 2.90%, 9/15/18 | 161,617 | ||||
100,000 | Roper Technologies, Inc., 2.80%, 12/15/21 | 100,113 | ||||
|
| |||||
517,115 | ||||||
|
| |||||
Information Technology — 0.53% | ||||||
100,000 | LAM Research Corp., 2.80%, 6/15/21 | 100,365 |
12 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
Materials — 3.33% | ||||||
$200,000 | Dow Chemical Co. (The), 8.55%, 5/15/19 | $ | 226,722 | |||
100,000 | Ecolab, Inc., 2.00%, 1/14/19 | 100,669 | ||||
200,000 | Georgia-Pacific LLC, 2.54%, 11/15/19(b) | 201,600 | ||||
100,000 | LyondellBasell Industries NV, 5.00%, 4/15/19 | 105,322 | ||||
|
| |||||
634,313 | ||||||
|
| |||||
Media — 4.07% | ||||||
150,000 | 21st Century Fox America, Inc., 8.25%, 8/10/18 | 162,510 | ||||
150,000 | CBS Corp., 4.63%, 5/15/18 | 154,650 | ||||
250,000 | Charter Communications Operating LLC, Charter Communications Operating Capital, 3.58%, 7/23/20 | 257,159 | ||||
200,000 | Time Warner Cable, Inc., 5.85%, 5/1/17 | 200,594 | ||||
|
| |||||
774,913 | ||||||
|
| |||||
Oil & Gas — 8.35% | ||||||
200,000 | Anadarko Petroleum Corp., 8.70%, 3/15/19 | 224,349 | ||||
150,000 | BP Capital Markets Plc, 2.01%, 9/16/21(a) | 152,407 | ||||
200,000 | Enbridge Energy Partners LP, 6.50%, 4/15/18 | 209,037 | ||||
100,000 | Enterprise Products Operating LLC, 2.85%, 4/15/21 | 100,434 | ||||
110,000 | Enterprise Products Operating LLC, 7.03%, 1/15/68(a) | 113,949 | ||||
200,000 | EOG Resources, Inc., 4.40%, 6/1/20 | 212,082 | ||||
200,000 | Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 | 222,577 | ||||
110,000 | Magellan Midstream Partners LP, 4.25%, 2/1/21 | 116,063 | ||||
135,000 | Marathon Oil Corp., 6.00%, 10/1/17 | 137,949 | ||||
100,000 | Schlumberger Holdings Corp., 2.35%, 12/21/18(b) | 100,662 | ||||
|
| |||||
1,589,509 | ||||||
|
| |||||
Telecommunication Services — 4.73% | ||||||
305,000 | AT&T, Inc., 5.20%, 3/15/20 | 329,496 | ||||
200,000 | CenturyLink, Inc., 5.15%, 6/15/17 | 201,400 | ||||
96,000 | Rogers Communications, Inc., 6.80%, 8/15/18 | 102,463 | ||||
250,000 | Verizon Communications, Inc., 4.50%, 9/15/20 | 266,096 | ||||
|
| |||||
899,455 | ||||||
|
| |||||
Utilities — 1.30% | ||||||
250,000 | Exelon Corp., 2.45%, 4/15/21 | 247,007 | ||||
Total Corporate Bonds (Cost $13,375,093) | 13,425,059 | |||||
|
| |||||
Municipal Bonds — 0.52% | ||||||
California — 0.52% | ||||||
100,000 | University of California Revenue Bonds, Series Y-1, 1.28%, 7/1/41(a) | 99,995 | ||||
|
| |||||
Total Municipal Bonds (Cost $100,000) | 99,995 | |||||
|
|
13 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
U.S. Government Agency Backed Mortgages — 3.59% | ||||||
Fannie Mae — 0.25% | ||||||
$ 6,428 | Series 2001-70, Class OF, 1.93%, 10/25/31(a) | $ | 6,539 | |||
1 | Series 2002-55, Class QE, 5.50%, 9/25/17 | 1 | ||||
10,217 | Series 2005-68, Class BC, 5.25%, 6/25/35 | 10,582 | ||||
4,748 | Series 2009-87, Class FX, 1.73%, 11/25/39(a) | 4,815 | ||||
25,518 | Series 2012-3, Class EA, 3.50%, 10/25/29 | 26,007 | ||||
|
| |||||
47,944 | ||||||
|
| |||||
Freddie Mac — 3.34% | ||||||
255,000 | Series 2011-K13, Class B, 4.61%, 1/25/48(a)(b) | 272,033 | ||||
280,000 | Series 2012-K709, Class B, 3.74%, 4/25/45(a)(b) | 286,819 | ||||
4,729 | Series 2448, Class FT, 1.91%, 3/15/32(a) | 4,816 | ||||
4,949 | Series 2488, Class FQ, 1.91%, 3/15/32(a) | 5,037 | ||||
33,326 | Series 2627, Class MW, 5.00%, 6/15/23 | 35,283 | ||||
2,117 | Series 3725, Class A, 3.50%, 9/15/24 | 2,136 | ||||
4,162 | Series 3770, Class FP, 1.41%, 11/15/40(a) | 4,176 | ||||
25,083 | Series 4027, Class GD, 2.00%, 10/15/25 | 25,063 | ||||
|
| |||||
635,363 | ||||||
|
| |||||
Total U.S. Government Agency Backed Mortgages (Cost $683,961) | 683,307 | |||||
|
| |||||
U.S. Treasury Obligations — 0.84% | ||||||
U.S. Treasury Notes — 0.84% | ||||||
160,000 | 0.75%, 2/28/18 | 159,550 | ||||
|
| |||||
Total U.S. Treasury Obligations (Cost $159,992) | 159,550 | |||||
|
|
14 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2017
Shares | Value | |||||
| ||||||
Investment Company — 0.45% |
| |||||
84,885 | U.S. Government Money Market Fund, RBC Institutional Class 1(c) | $ | 84,885 | |||
|
| |||||
Total Investment Company (Cost $84,885) | 84,885 | |||||
|
| |||||
Total Investments (Cost $19,122,191)(d) — 100.76% | $ | 19,177,287 | ||||
Liabilities in excess of other assets — (0.76)% | (145,256 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 19,032,031 | ||||
|
|
(a) | Variable rate security. The rate reflected in the Schedule of Portfolio Investments is the rate in effect on March 31, 2017. |
(b) | Security exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
(c) | Affiliated investment. |
(d) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Abbreviations used are defined below:
REIT - Real Estate Investment Trust
Financial futures contracts as of March 31, 2017:
Long Position | Number of Contracts | Expiration Date | Unrealized Appreciation | Notional Value | Clearinghouse | |||||||||||||||||||
Two Year U.S. Treasury Note | 14 | June, 2017 | $ 2,625 | USD | 3,027,719 | Barclays Plc | ||||||||||||||||||
Total | $ 2,625 | |||||||||||||||||||||||
Short Position | Number of Contracts | Expiration Date | Unrealized Depreciation | Notional Value | Clearinghouse | |||||||||||||||||||
Five Year U.S. Treasury Note | 5 | June, 2017 | $ (977) | USD | 587,656 | Barclays Plc | ||||||||||||||||||
Five Year U.S. Treasury Note | 8 | June, 2017 | (8,812) | USD | 933,000 | Barclays Plc | ||||||||||||||||||
Total | $(9,789) |
See Notes to Financial Statements.
15 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund
March 31, 2017
Principal Amount | Value | |||||
| ||||||
Asset Backed Securities — 24.03% | ||||||
$150,000 | AmeriCredit Automobile Receivables Trust, Series 2013-1, Class D, 2.09%, 2/8/19 | $ | 150,319 | |||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-2, Class B, 1.60%, 7/8/19 | 150,100 | ||||
250,000 | AmeriCredit Automobile Receivables Trust, Series 2014-3, Class C, 2.58%, 9/8/20 | 252,479 | ||||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-4, Class C, 2.47%, 11/9/20 | 151,400 | ||||
230,000 | AmeriCredit Automobile Receivables Trust, Series 2015-2, Class C, 2.40%, 1/8/21 | 231,945 | ||||
225,000 | AmeriCredit Automobile Receivables Trust, Series 2016-2, Class B, 2.21%, 5/10/21 | 225,524 | ||||
175,000 | AmeriCredit Automobile Receivables Trust, Series 2017-1, Class B, 2.30%, 2/18/22 | 174,869 | ||||
145,000 | CarMax Auto Owner Trust, Series 2014-4, Class B, 2.20%, 9/15/20 | 145,512 | ||||
46,482 | Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB2, Class M1, 1.64%, 4/25/36(a) | 46,388 | ||||
51,566 | Enterprise Fleet Financing LLC, Series 2014-2, Class A2, 1.05%, 3/20/20(b) | 51,496 | ||||
180,000 | GM Financial Automobile Leasing Trust, Series 2015-3, Class C, 2.98%, 11/20/19 | 181,813 | ||||
150,000 | GM Financial Automobile Leasing Trust, Series 2016-3, Class B, 1.97%, 5/20/20 | 149,000 | ||||
250,000 | Macquarie Equipment Funding Trust, Series 2014-A, Class B, 1.99%, 7/20/21(b) | 250,039 | ||||
250,000 | Mercedes Benz Auto Lease Trust 2015-B, Class A4, 1.53%, 5/17/21 | 250,178 | ||||
126,506 | RASC Trust, Series 2005-KS9, Class M2, 1.41%, 10/25/35(a) | 126,634 | ||||
250,000 | Santander Drive Auto Receivables Trust, Series 2013-3, Class D, 2.42%, 4/15/19 | 251,168 | ||||
210,079 | Santander Drive Auto Receivables Trust, Series 2014-3, Class C, 2.13%, 8/17/20 | 210,615 | ||||
215,000 | Santander Drive Auto Receivables Trust, Series 2015-1, Class C, 2.57%, 4/15/21 | 216,708 | ||||
145,000 | Santander Drive Auto Receivables Trust, Series 2016-1, Class B, 2.47%, 12/15/20 | 146,253 | ||||
150,000 | Santander Drive Auto Receivables Trust, Series 2016-3, Class B, 1.89%, 6/15/21 | 149,739 | ||||
14,601 | Structured Asset Securities Corp., Series 2005-NC1, Class M1, 1.45%, 2/25/35(a) | 14,599 | ||||
|
| |||||
Total Asset Backed Securities (Cost $3,517,078) | 3,526,778 | |||||
|
|
16 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
Collateralized Mortgage Obligations — 2.98% | ||||||
$ 64,384 | JP Morgan Resecuritization Trust, Series 2014-1, Class 9A3, 1.07%, 12/26/35(a)(b) | $ | 62,988 | |||
28,149 | RBSSP Resecuritization Trust, Series 2009-6, Class 13A4, 3.03%, 8/26/35(a)(b) | 28,132 | ||||
25,335 | RBSSP Resecuritization Trust, Series 2010-3, Class 9A1, 5.50%, 2/26/35(b) | 25,450 | ||||
54,761 | Springleaf Mortgage Loan Trust, Series 2013-2A, Class A, 1.78%, 12/25/65(a)(b) | 54,753 | ||||
268,482 | Springleaf Mortgage Loan Trust, Series 2013-3A, Class A, 1.87%, 9/25/57(a)(b) | 266,711 | ||||
|
| |||||
Total Collateralized Mortgage Obligations (Cost $441,152) | 438,034 | |||||
|
| |||||
Corporate Bonds — 64.10% | ||||||
Banks — 11.39% | ||||||
100,000 | Bank of Montreal, 1.84%, 8/27/21(a) | 100,917 | ||||
125,000 | Citigroup, Inc., 2.15%, 7/30/18 | 125,429 | ||||
100,000 | Goldman Sachs Group, Inc. (The), 2.00%, 4/25/19 | 99,815 | ||||
150,000 | Goldman Sachs Group, Inc. (The), 5.38%, 3/15/20 | 162,611 | ||||
150,000 | HSBC USA, Inc., 2.00%, 8/7/18 | 150,235 | ||||
250,000 | JPMorgan Chase & Co., 1.66%, 3/9/21(a) | 248,943 | ||||
75,000 | Morgan Stanley, 2.45%, 2/1/19 | 75,674 | ||||
100,000 | MUFG Union Bank NA, 2.63%, 9/26/18 | 101,042 | ||||
200,000 | Swedbank AB, 1.82%, 3/14/22(a)(b) | 200,087 | ||||
200,000 | Toronto-Dominion Bank, 2.15%, 4/7/21(a) | 203,520 | ||||
200,000 | Wells Fargo & Co., 2.11%, 12/7/20(a) | 202,860 | ||||
|
| |||||
1,671,133 | ||||||
|
| |||||
Consumer Discretionary — 11.99% | ||||||
200,000 | AbbVie, Inc., 1.80%, 5/14/18 | 200,225 | ||||
100,000 | Constellation Brands, Inc., 7.25%, 5/15/17 | 100,561 | ||||
125,000 | Delta Air Lines, Inc., 2.88%, 3/13/20 | 126,012 | ||||
225,000 | Diamond 1 Finance Corp. / Diamond 2 Finance Corp., 3.48%, 6/1/19(b) | 230,560 | ||||
250,000 | Ford Motor Credit Co. LLC, 1.72%, 12/6/17 | 249,997 | ||||
250,000 | Ford Motor Credit Co. LLC, 2.55%, 10/5/18 | 251,985 | ||||
150,000 | Hewlett Packard Enterprise Co., 2.45%, 10/5/17(b) | 150,438 | ||||
100,000 | Hyundai Capital America, 2.00%, 3/19/18(b) | 100,090 | ||||
250,000 | Kraft Heinz Foods Co., 2.00%, 7/2/18 | 250,621 | ||||
100,000 | Walgreens Boots Alliance, Inc., 1.75%, 5/30/18 | 100,122 | ||||
|
| |||||
1,760,611 | ||||||
|
|
17 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
Finance - Diversified — 10.29% | ||||||
$300,000 | American Honda Finance Corp., 1.72%, 9/9/21(a) | $ | 302,731 | |||
200,000 | American Tower Corp. REIT, 4.50%, 1/15/18 | 204,268 | ||||
150,000 | Bear Stearns Cos. LLC (The), 6.40%, 10/2/17 | 153,604 | ||||
200,000 | General Motors Financial Co., Inc., 2.40%, 5/9/19 | 200,430 | ||||
250,000 | General Motors Financial Co., Inc., 3.10%, 1/15/19 | 254,033 | ||||
50,000 | McGraw Hill Financial, Inc., 2.50%, 8/15/18 | 50,395 | ||||
20,000 | PACCAR Financial Corp., 1.70%, 12/6/18(a) | 20,158 | ||||
125,000 | Regions Financial Corp., 2.25%, 9/14/18 | 125,385 | ||||
200,000 | Synchrony Financial, 1.88%, 8/15/17 | 200,074 | ||||
|
| |||||
1,511,078 | ||||||
|
| |||||
Health Care — 11.11% | ||||||
250,000 | Actavis Funding SCS, 2.35%, 3/12/18 | 251,090 | ||||
200,000 | Aetna, Inc., 1.70%, 6/7/18 | 200,004 | ||||
150,000 | Biogen Idec, Inc., 6.88%, 3/1/18 | 157,033 | ||||
100,000 | EMD Finance LLC, 1.70%, 3/19/18(b) | 99,895 | ||||
200,000 | Laboratory Corp. of America Holdings, 2.20%, 8/23/17 | 200,586 | ||||
75,000 | Mylan NV, 3.00%, 12/15/18 | 75,870 | ||||
250,000 | Shire Acquisitions Investments Ireland Designated Activity Co., 1.90%, 9/23/19 | 248,198 | ||||
250,000 | Teva Pharmaceutical Finance Netherlands III BV, 1.40%, 7/20/18 | 248,529 | ||||
150,000 | Zimmer Holdings, Inc., 1.45%, 4/1/17 | 150,000 | ||||
|
| |||||
1,631,205 | ||||||
|
| |||||
Industrials — 2.26% | ||||||
100,000 | Caterpillar Financial Services Corp., 2.10%, 1/10/20 | 100,141 | ||||
29,000 | Newell Rubbermaid, Inc., 2.60%, 3/29/19 | 29,358 | ||||
200,000 | Pentair Finance SA, 2.90%, 9/15/18 | 202,021 | ||||
|
| |||||
331,520 | ||||||
|
| |||||
Information Technology — 1.42% | ||||||
200,000 | DXC Technology Co., 2.88%, 3/27/20(b) | 201,676 | ||||
7,000 | Oracle Corp., 1.60%, 1/15/19(a) | 7,061 | ||||
|
| |||||
208,737 | ||||||
|
| |||||
Materials — 0.86% | ||||||
125,000 | Ecolab, Inc., 2.00%, 1/14/19 | 125,836 | ||||
Media — 2.00% | ||||||
150,000 | Charter Communications Operating LLC / Charter Communications Operating Capital, 3.58%, 7/23/20 | 154,296 | ||||
133,000 | Grupo Televisa SAB, 6.00%, 5/15/18 | 138,735 | ||||
|
| |||||
293,031 | ||||||
|
| |||||
Oil & Gas — 8.13% | ||||||
150,000 | BP Capital Markets Plc, 2.01%, 9/16/21(a) | 152,407 | ||||
150,000 | Enbridge, Inc., 1.51%, 6/2/17(a) | 150,000 | ||||
150,000 | Enterprise Products Operating LLC, 6.50%, 1/31/19 | 162,167 |
18 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2017
Principal Amount | Value | |||||
| ||||||
$200,000 | Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 | $ | 222,577 | |||
200,000 | Marathon Oil Corp., 6.00%, 10/1/17 | 204,369 | ||||
150,000 | Schlumberger Holdings Corp., 2.35%, 12/21/18(b) | 150,993 | ||||
150,000 | TransCanada Pipelines Ltd., 1.88%, 1/12/18 | 150,154 | ||||
|
| |||||
1,192,667 | ||||||
|
| |||||
Telecommunication Services — 3.29% | ||||||
250,000 | AT&T, Inc., 5.20%, 3/15/20 | 270,079 | ||||
200,000 | Verizon Communications, Inc., 4.50%, 9/15/20 | 212,877 | ||||
|
| |||||
482,956 | ||||||
|
| |||||
Utilities — 1.36% | ||||||
200,000 | Exelon Corp., 1.55%, 6/9/17 | 199,987 | ||||
Total Corporate Bonds (Cost $9,372,998) | 9,408,761 | |||||
|
| |||||
U.S. Government Agency Backed Mortgages — 5.60% | ||||||
Fannie Mae — 2.64% | ||||||
34,396 | Pool #725098, 5.50%, 12/1/18 | 35,132 | ||||
19,149 | Pool #739413, 5.00%, 10/1/18 | 19,544 | ||||
68,930 | Pool #888467, 6.00%, 6/1/22 | 73,757 | ||||
74,636 | Pool #AL0202, 4.00%, 4/1/21 | 77,152 | ||||
1,452 | Series 2002-73, Class OE, 5.00%, 11/25/17 | 1,464 | ||||
25,634 | Series 2003-120, Class BL, 3.50%, 12/25/18 | 25,881 | ||||
22,694 | Series 2003-55, Class CD, 5.00%, 6/25/23 | 24,115 | ||||
15,477 | Series 2004-3, Class BE, 4.00%, 2/25/19 | 15,667 | ||||
15,429 | Series 2011-23, Class AB, 2.75%, 6/25/20 | 15,524 | ||||
99,433 | Series 2012-1, Class GB, 2.00%, 2/25/22 | 99,310 | ||||
|
| |||||
387,546 | ||||||
|
| |||||
Freddie Mac — 2.96% | ||||||
220,000 | Series 2012-K709, Class B, 3.74%, 4/25/45(a)(b) | 225,358 | ||||
1,374 | Series 2543, Class NM, 5.00%, 12/15/17 | 1,389 | ||||
17,959 | Series 2649, Class QH, 4.50%, 7/15/18 | 18,233 | ||||
12,341 | Series 2675, Class CK, 4.00%, 9/15/18 | 12,500 | ||||
15,924 | Series 2761, Class CB, 4.00%, 3/15/19 | 16,154 | ||||
47,661 | Series 3710, Class AB, 2.00%, 8/15/20 | 47,773 | ||||
62,598 | Series 3726, Class BA, 2.00%, 8/15/20 | 62,576 | ||||
48,653 | Series 3852, Class EA, 4.50%, 12/15/21 | 49,896 | ||||
|
| |||||
433,879 | ||||||
|
| |||||
Total U.S. Government Agency Backed Mortgages (Cost $823,992) | 821,425 | |||||
|
|
19 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2017
Shares | Value | |||||
| ||||||
Investment Company — 4.26% | ||||||
624,927 | U.S. Government Money Market Fund, RBC Institutional Class 1(c) | 624,927 | ||||
|
| |||||
Total Investment Company (Cost $624,927) | 624,927 | |||||
|
| |||||
Total Investments (Cost $14,780,147)(d) — 100.97% | $ | 14,819,925 | ||||
Liabilities in excess of other assets — (0.97)% | (141,984 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 14,677,941 | ||||
|
|
(a) | Variable rate security. The rate reflected in the Schedule of Portfolio Investments is the rate in effect on March 31, 2017. |
(b) | Security exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
(c) | Affiliated investment. |
(d) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Abbreviations used are defined below:
REIT - Real Estate Investment Trust
Financial futures contracts as of March 31, 2017:
Short Position | Number of Contracts | Expiration Date | Unrealized Depreciation | Notional Value | Clearinghouse | |||||||||||||||||||
Two Year U.S. Treasury Note | 6 | June, 2017 | $(188) | USD | 1,298,531 | Barclays Plc | ||||||||||||||||||
Total | $(188) |
See Notes to Financial Statements.
20 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities
March 31, 2017
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||
Assets: | ||||||||||||
Investments in securities, at value: | ||||||||||||
Unaffiliated investments (cost $19,037,306 and $14,155,220, respectively) | $ | 19,092,402 | $ | 14,194,998 | ||||||||
Affiliated investment (cost $84,885 and $624,927, respectively) | 84,885 | 624,927 | ||||||||||
Interest and dividends receivable | 114,351 | 63,037 | ||||||||||
Receivable from advisor | 6,745 | 5,926 | ||||||||||
Cash at broker for financial futures contracts | 46,062 | 32,583 | ||||||||||
Unrealized appreciation on futures contracts | 2,625 | — | ||||||||||
Prepaid expenses and other assets | 21,927 | 21,875 | ||||||||||
|
|
|
| |||||||||
Total Assets | 19,368,997 | 14,943,346 | ||||||||||
|
|
|
| |||||||||
Liabilities: | ||||||||||||
Distributions payable | 26 | 11 | ||||||||||
Payable for capital shares redeemed | 470 | 949 | ||||||||||
Payable for investments purchased | 287,233 | 225,683 | ||||||||||
Unrealized depreciation on futures contracts | 9,789 | 188 | ||||||||||
Accrued expenses and other payables: | ||||||||||||
Accounting fees | 2,207 | 2,189 | ||||||||||
Trustee fees | 4 | 3 | ||||||||||
Shareholder reports | 4,289 | 4,654 | ||||||||||
Audit fees | 26,875 | 26,875 | ||||||||||
Transfer Agent fees | 1,530 | 1,648 | ||||||||||
Other | 4,543 | 3,205 | ||||||||||
|
|
|
| |||||||||
Total Liabilities | 336,966 | 265,405 | ||||||||||
|
|
|
| |||||||||
Net Assets | $ | 19,032,031 | $ | 14,677,941 | ||||||||
|
|
|
| |||||||||
Net Assets Consist Of: | ||||||||||||
Capital | $ | 19,058,144 | $ | 14,799,973 | ||||||||
Undistributed net investment income and distributions in excess of net investment income | 25,740 | (1 | ) | |||||||||
Accumulated net realized losses from investment transactions and futures contracts | (99,785 | ) | (161,621 | ) | ||||||||
Net unrealized appreciation on investments and futures contracts | 47,932 | 39,590 | ||||||||||
|
|
|
| |||||||||
Net Assets | $ | 19,032,031 | $ | 14,677,941 | ||||||||
|
|
|
|
21 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2017
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Net Assets: | ||||||||||||||||
Class F | $ | 665,813 | $ | 666,912 | ||||||||||||
Class I | 18,366,218 | 14,011,029 | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 19,032,031 | $ | 14,677,941 | ||||||||||||
|
|
|
| |||||||||||||
Shares Outstanding (Unlimited number of shares authorized, no par value): | ||||||||||||||||
Class F | 66,765 | 67,373 | ||||||||||||||
Class I | 1,842,341 | 1,417,434 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 1,909,106 | 1,484,807 | ||||||||||||||
|
|
|
| |||||||||||||
Net Asset Values and Redemption Price Per Share: | ||||||||||||||||
Class F | $ | 9.97 | $ | 9.90 | ||||||||||||
|
|
|
| |||||||||||||
Class I | $ | 9.97 | $ | 9.88 | ||||||||||||
|
|
|
|
See Notes to Financial Statements.
22 |
FINANCIAL STATEMENTS |
For the Year Ended March 31, 2017
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Investment Income: | ||||||||||||||||
Interest income | $ | 364,086 | $ | 285,183 | ||||||||||||
Dividend income - affiliated investment | 1,808 | 1,776 | ||||||||||||||
|
|
|
| |||||||||||||
Total Investment Income | 365,894 | 286,959 | ||||||||||||||
|
|
|
| |||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 51,831 | 40,502 | ||||||||||||||
Distribution fees - Class F | 1,178 | 2,380 | ||||||||||||||
Accounting fees | 25,864 | 25,810 | ||||||||||||||
Audit fees | 36,076 | 36,076 | ||||||||||||||
Legal fees | 2,913 | 3,138 | ||||||||||||||
Custodian fees | 2,187 | 2,540 | ||||||||||||||
Insurance fees | 3,691 | 3,691 | ||||||||||||||
Trustees’ fees | 953 | 935 | ||||||||||||||
Transfer agent fees - Class F | 3,854 | 3,605 | ||||||||||||||
Transfer agent fees - Class I | 4,857 | 5,423 | ||||||||||||||
Shareholder reports | 12,233 | 11,317 | ||||||||||||||
Registration and filing fees | 35,966 | 37,037 | ||||||||||||||
Other fees | 16,922 | 16,145 | ||||||||||||||
|
|
|
| |||||||||||||
Total expenses | 198,525 | 188,599 | ||||||||||||||
|
|
|
| |||||||||||||
Expenses waived/reimbursed by: | ||||||||||||||||
Advisor | (136,878 | ) | (137,618 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net Expenses | 61,647 | 50,981 | ||||||||||||||
|
|
|
| |||||||||||||
Net Investment Income | 304,247 | 235,978 | ||||||||||||||
|
|
|
| |||||||||||||
Realized/Unrealized Gains (Losses): | ||||||||||||||||
Net realized gains (losses) on: | ||||||||||||||||
Investment transactions | 31,150 | 19,651 | ||||||||||||||
Futures contracts | 7,741 | 1,182 | ||||||||||||||
|
|
|
| |||||||||||||
Net realized gains | 38,891 | 20,833 | ||||||||||||||
|
|
|
| |||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | 42,650 | 43,217 | ||||||||||||||
Futures contracts | (6,664 | ) | (2,219 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net unrealized gains | 35,986 | 40,998 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | $ | 379,124 | $ | 297,809 | ||||||||||||
|
|
|
|
See Notes to Financial Statements.
23 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
Short Duration Fixed Income Fund | ||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 304,247 | $ | 220,935 | ||||
Net realized gains (losses) from investments and futures contracts | 38,891 | (96,329 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and futures contracts | 35,986 | 54,267 | ||||||
|
|
|
| |||||
Change in net assets resulting from operations | 379,124 | 178,873 | ||||||
|
|
|
| |||||
Distributions to Class F Shareholders: | ||||||||
From net investment income | (20,031 | ) | (23,247 | ) | ||||
Distributions to Class I Shareholders: | ||||||||
From net investment income | (290,608 | ) | (206,762 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from shareholder distributions | (310,639 | ) | (230,009 | ) | ||||
|
|
|
| |||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 7,425,479 | 3,177,552 | ||||||
Distributions reinvested | 307,941 | 229,598 | ||||||
Cost of shares redeemed | (3,000,632 | ) | (3,402,675 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from capital transactions | 4,732,788 | 4,475 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets | 4,801,273 | (46,661 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 14,230,758 | 14,277,419 | ||||||
|
|
|
| |||||
End of year | $ | 19,032,031 | $ | 14,230,758 | ||||
|
|
|
| |||||
Undistributed net investment income | $ | 25,740 | $ | 25,013 | ||||
|
|
|
| |||||
Share Transactions: | ||||||||
Issued | 744,665 | 322,078 | ||||||
Reinvested | 30,866 | 23,148 | ||||||
Redeemed | (300,867 | ) | (342,720 | ) | ||||
|
|
|
| |||||
Change in shares resulting from capital transactions | 474,664 | 2,506 | ||||||
|
|
|
|
See Notes to Financial Statements.
24 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets (cont.)
Ultra-Short Fixed Income Fund | ||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 235,978 | $ | 204,778 | ||||
Net realized gains (losses) from investments and futures contracts | 20,833 | (34,325 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and futures contracts | 40,998 | 23,757 | ||||||
|
|
|
| |||||
Change in net assets resulting from operations | 297,809 | 194,210 | ||||||
|
|
|
| |||||
Distributions to Class F Shareholders: | ||||||||
From net investment income | (34,635 | ) | (52,121 | ) | ||||
Distributions to Class I Shareholders: | ||||||||
From net investment income | (224,396 | ) | (190,398 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from shareholder distributions | (259,031 | ) | (242,519 | ) | ||||
|
|
|
| |||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 3,700,065 | 7,951,400 | ||||||
Distributions reinvested | 258,897 | 242,519 | ||||||
Cost of shares redeemed | (7,196,923 | ) | (4,798,975 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from capital transactions | (3,237,961 | ) | 3,394,944 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets | (3,199,183 | ) | 3,346,635 | |||||
Net Assets: | ||||||||
Beginning of year | 17,877,124 | 14,530,489 | ||||||
|
|
|
| |||||
End of year | $ | 14,677,941 | $ | 17,877,124 | ||||
|
|
|
| |||||
Undistributed (Distributions in excess of) net investment income | $ | (1 | ) | $ | 351 | |||
|
|
|
| |||||
Share Transactions: | ||||||||
Issued | 374,203 | 804,849 | ||||||
Reinvested | 26,171 | 24,587 | ||||||
Redeemed | (727,480 | ) | (486,122 | ) | ||||
|
|
|
| |||||
Change in shares resulting from capital transactions | (327,106 | ) | 343,314 | |||||
|
|
|
|
See Notes to Financial Statements.
25 |
RBC Short Duration Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class F | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.92 | $ | 9.97 | $ | 10.02 | $ | 10.04 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.17 | 0.16 | 0.14 | 0.01 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 0.05 | (0.04) | — | (c) | (0.02) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 0.22 | 0.12 | 0.14 | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.17) | (0.17) | (0.18) | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Realized gains | — | — | (0.01) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.17) | (0.17) | (0.19) | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 9.97 | $ | 9.92 | $ | 9.97 | $ | 10.02 | ||||||||||||||||||||||||
Total Return: | 2.23% | 1.18% | 1.42 | % | (0.08)%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.45% | 0.45% | 0.45 | % | 0.45%(e) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.69% | 1.60% | 1.45 | % | 1.33%(e) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.53% | 1.70% | 2.07 | % | 43.21%(e) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 666 | $ | 1,305 | $ | 1,934 | $ | 10 | ||||||||||||||||||||||||
Portfolio turnover** | 37 | % | 50 | % | 57 | % | 46 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Not Annualized. |
(e) | Annualized. |
See Notes to Financial Statements.
26 |
FINANCIAL HIGHLIGHTS |
RBC Short Duration Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | ‘$ | 9.92 | $ | 9.97 | $ | 10.02 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.18 | 0.17 | 0.15 | 0.04 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 0.05 | (0.04) | — | (c) | 0.02 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 0.23 | 0.13 | 0.15 | 0.06 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.18) | (0.18) | (0.19) | (0.04) | ||||||||||||||||||||||||||||
Realized gains | — | — | (0.01) | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.18) | (0.18) | (0.20) | (0.04) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 9.97 | $ | 9.92 | $ | 9.97 | $ | 10.02 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return: | 2.33% | 1.28% | 1.51 | % | 0.57%(d) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.35% | 0.35% | 0.35 | % | 0.35%(e) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.78% | 1.70% | 1.55 | % | 1.41%(e) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.12% | 1.37% | 1.68 | % | 3.66%(e) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 18,366 | $ | 12,925 | $ | 12,344 | $ | 10,436 | ||||||||||||||||||||||||
Portfolio turnover** | 37 | % | 50 | % | 57 | % | 46 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 30, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | Not Annualized. |
(e) | Annualized. |
See Notes to Financial Statements.
27 |
FINANCIAL HIGHLIGHTS |
RBC Ultra-Short Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class F | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.87 | $ | 9.89 | $ | 9.99 | $ | 9.98 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.14 | 0.11 | 0.08 | — | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 0.04 | — | (0.02) | 0.02 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 0.18 | 0.11 | 0.06 | 0.02 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.15) | (0.13) | (0.16) | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.15) | (0.13) | (0.16) | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 9.90 | $ | 9.87 | $ | 9.89 | $ | 9.99 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return: | 1.84% | 1.16% | 0.62 | % | 0.21%(c) | |||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.40% | 0.40% | 0.40 | % | 0.40%(d) | |||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.41% | 1.09% | 0.78 | % | (0.08)%(d) | |||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.30% | 1.25% | 3.04 | % | 43.18%(d) | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 667 | $ | 4,395 | $ | 608 | $ | 10 | ||||||||||||||||||||||||
Portfolio turnover** | 52 | % | 41 | % | 63 | % | 41 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Not Annualized. |
(d) | Annualized. |
See Notes to Financial Statements.
28 |
FINANCIAL HIGHLIGHTS |
RBC Ultra-Short Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2015 | For the Period Ended March 31, 2014(a) | |||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.87 | $ | 9.89 | $ | 9.98 | $ | 10.00 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net investment income(b) | 0.15 | 0.12 | 0.10 | 0.02 | ||||||||||||||||||||||||||||
Realized and unrealized gains/(losses) | 0.02 | — | (0.02) | (0.01) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total from investment activities | 0.17 | 0.12 | 0.08 | 0.01 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Distributions: | ||||||||||||||||||||||||||||||||
Net investment income | (0.16) | (0.14) | (0.17) | (0.03) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total distributions | (0.16) | (0.14) | (0.17) | (0.03) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net asset value, end of period | $ | 9.88 | $ | 9.87 | $ | 9.89 | $ | 9.98 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Return: | 1.74% | 1.24 | % | 0.83 | % | 0.14%(c) | ||||||||||||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets | 0.30% | 0.30 | % | 0.30 | % | 0.30%(d) | ||||||||||||||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.47% | 1.22 | % | 1.03 | % | 0.88%(d) | ||||||||||||||||||||||||||
Ratio of Expenses to Average Net Assets* | 1.14% | 1.13 | % | 1.65 | % | 3.70%(d) | ||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 14,011 | $ | 13,482 | $ | 13,922 | $ | 10,158 | ||||||||||||||||||||||||
Portfolio turnover** | 52 | % | 41 | % | 63 | % | 41 | % |
* | During the period, certain fees were contractually or voluntarily reduced and/or reimbursed. If such contractual/voluntary fee reductions and reimbursements had not occurred, the ratio would have been as indicated. |
** | Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(a) | For the period from December 30, 2013 (commencement of operations) to March 31, 2014. |
(b) | Per share net investment income has been calculated using the average daily shares method. |
(c) | Not Annualized. |
(d) | Annualized. |
See Notes to Financial Statements.
29 |
March 31, 2017
1. Organization
RBC Funds Trust (the “Trust”) is registered under the Investment Company Act of 1940 (as amended) as an open-end management investment company. The Trust was organized as a Delaware statutory trust on December 16, 2003 and currently consists of 21 portfolios. This report includes the following two investment portfolios (each a “Fund” and collectively, the “Funds”):
- RBC Short Duration Fixed Income Fund (“Short Duration Fixed Income Fund”)
- RBC Ultra-Short Fixed Income Fund (“Ultra-Short Fixed Income Fund”)
The Funds offer Class F and Class I shares. Class F and Class I shares (intended for investors meeting certain investment minimum thresholds) are not subject to either a front-end sales charge or a contingent deferred sales charge.
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)” or “Advisor” or “Co-Administrator”) acts as the investment advisor for the Funds. The officers of the Trust (“Fund Management”) are also employees of RBC GAM (US).
2. Significant Accounting Policies
Each Fund is an investment company that follows accounting and reporting guidance under the Financial Accounting Standards Board. Summarized below are the significant accounting policies of the Funds. These policies conform to accounting principles generally accepted in the United States of America (“US GAAP”). Fund Management follows these policies when preparing financial statements. Fund Management may also be required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The financial statements are as of the close of regular trading on the New York Stock Exchange (“NYSE”).
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms and amended certain existing rules and forms to modernize the reporting and disclosure of information by registered investment companies. In part, the rules amend Regulation S-X and will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that adoption of these amendments will have on the Funds’ financial statements and related disclosures.
Security Valuation:
The Trust’s Board of Trustees (the “Board”) has adopted pricing and valuation procedures for determining the fair value of the Funds’ investments. Fair value of a security is considered to be the price that a fund might reasonably expect to receive upon its current sale in an orderly transaction between market participants.
Fixed income securities, including to-be-announced (“TBA”) commitments and municipal bonds, are generally valued based on evaluated prices received from third-party pricing services or from broker-dealers who make markets in the securities and are generally categorized as Level 2 in the fair value hierarchy (see “Fair Value Measurements” below for additional information). The pricing services utilize both dealer-supplied valuations and electronic data processing techniques that take into account multiple appropriate factors such as institutional-size trading in similar groups of securities, market spreads, interest rates, and fundamental security analytical data including yield, quality, coupon rate, maturity and type of issue.
30 |
NOTES TO FINANCIAL STATEMENTS |
Mortgage-related securities represent direct or indirect participation in, or are secured by and payable from, mortgage loans secured by real property and include pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. Government agencies or instrumentalities, or private issuers, including commercial banks, savings and loan institutions, private mortgage insurance bankers and other secondary market issuers. These mortgage-related securities are generally valued by pricing services that use broker-dealer quotations or valuation estimates from their internal pricing models. These pricing models generally consider such factors as current market data, estimated cash flows, market-based yield spreads, and estimated prepayment rates. Securities valued using such techniques and inputs are generally categorized as Level 2 in the fair value hierarchy. To the extent significant inputs are unobservable, the securities will be categorized as Level 3.
Exchange-traded futures are valued at the last sale price at the close of the market on the principal exchange on which they are traded and are categorized as Level 1 in the fair value hierarchy. Investments in open-end investment companies (mutual funds) are valued at net asset value and are categorized as Level 1 in the fair value hierarchy.
The Board has delegated to the Funds’ Pricing Committee (“Pricing Committee”) the responsibility for implementing the pricing and valuation procedures, including responsibility for determining the fair value of the Funds’ securities. The Pricing Committee includes representatives of the Funds’ Advisor and Co-Administrator, including personnel from accounting and operations, investment management, trading, risk management, compliance and legal. The Pricing Committee meets at least quarterly to review and approve Fund valuation matters, including a review of the Funds’ pricing activity and operations, fair value measurements, pricing vendors, policies and procedures, and related controls. At least a quorum of the Pricing Committee shall meet more frequently, as needed, to consider and approve time-sensitive fair valuation matters. The Pricing Committee reports to the Valuation, Portfolio Management and Performance Committee (“Valuation Committee”) of the Board. Members of the Pricing Committee meet with the Valuation Committee and the Board at each of their regularly scheduled meetings to discuss valuation matters and actions taken during the period.
The Board has adopted procedures to determine the fair value of a security when a price is not available from a pricing service or broker-dealer or Fund Management determines that a price provided by a pricing service or broker-dealer does not approximate fair value. Fair valuation may also be used when a significant valuation event affecting the value of a security or market sector is determined to have occurred between the time when a security’s market closes and the time the Funds’ net asset value is calculated. The fair value of the security will be determined in good faith by the Pricing Committee in accordance with procedures and methodologies adopted by the Board. General factors used in determining the fair value of securities include, but are not limited to, fundamental analytical data relating to the security, the issuer and the market, such as duration, prepayment and default rates; general level of interest rates and changes in interest rates; information from broker-dealers; trading in similar securities; any restrictions on disposition of the security; and an evaluation of the forces that influence the market in which the investments are traded. These securities are either categorized as Level 2 or 3 in the fair value hierarchy, depending on the relevant inputs used.
When the Funds utilize fair valuation methods that use significant unobservable inputs to determine a security’s value, such securities will be categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Funds’ policy is intended to result in a calculation of a Fund’s net asset value that fairly reflects security values as of the time of pricing, the Funds cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that the Funds could obtain for a security if they were to dispose of it as of the time of pricing (for instance, in a forced or distressed sale). The prices used by the Funds may differ from the value that would be realized if the securities were sold.
The Pricing Committee employs various methods for calibrating the valuation approach related to securities categorized within Level 2 and Level 3 of the fair value hierarchy. These methods may include regular due diligence of the Funds’ pricing vendors, a regular review of key inputs and assumptions, transaction back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing and stale prices and large movements in market value, and reviews of any market related activities. Additionally, the pricing of all fair value holdings is subsequently reported to the Valuation Committee and Board.
31 |
NOTES TO FINANCIAL STATEMENTS |
Fair Value Measurements:
The Funds disclose the fair value of their investments in a hierarchy that categorizes investments based on the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:
● Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access at the measurement date.
● Level 2 - Significant inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active. Observable inputs may include quoted prices for similar securities, interest rates, spreads, prepayment speeds, etc.
● Level 3 - Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those securities.
Inputs used in determining fair value of an investment may include, but are not limited to, price information, volatility statistics, credit and market data, and other factors, all of which may be either observable or unobservable. Inputs can vary among investments and will be impacted by the investment type and volume of activity for the particular security or similar securities in the market. Investments in the Level 3 category are generally supported by transactions and quoted prices from dealers participating in the market for those investments. Investments may be included in the Level 3 category due to a lack of market activity or transparency. Internal valuation models may also be used as a pricing source for Level 3 investments. Internal valuation models may rely on one or more unobservable inputs, such as estimated cash flows, financial statement analysis and discount rates.
The summary of inputs used to determine the fair value of each Fund’s investments as of March 31, 2017 is as follows:
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||
Short Duration Fixed Income Fund | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments in Securities | ||||||||||||||||||||||||
Asset Backed Securities | $ | — | $ | 4,408,001 | $ | — | $ | 4,408,001 | ||||||||||||||||
Collateralized Mortgage Obligations | — | 316,490 | — | 316,490 | ||||||||||||||||||||
Corporate Bonds | — | 13,425,059 | — | 13,425,059 | ||||||||||||||||||||
Municipal Bonds | — | 99,995 | — | 99,995 | ||||||||||||||||||||
U.S. Government Agency Backed Mortgages | — | 683,307 | — | 683,307 | ||||||||||||||||||||
U.S. Treasury Obligations | — | 159,550 | — | 159,550 | ||||||||||||||||||||
Investment Company | 84,885 | — | — | 84,885 | ||||||||||||||||||||
Other Financial Instruments(*) | ||||||||||||||||||||||||
Interest Rate Contracts | 2,625 | — | — | 2,625 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 87,510 | $ | 19,092,402 | $ | — | $ | 19,179,912 | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Other Financial Instruments(*) | ||||||||||||||||||||||||
Interest Rate Contracts | $ | (9,789 | ) | $ | — | $ | — | $ | (9,789 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
32 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||||||||||
Ultra-Short Fixed Income Fund | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments in Securities | ||||||||||||||||||||||||
Asset Backed Securities | $ | — | $ | 3,526,778 | $ | — | $ | 3,526,778 | ||||||||||||||||
Collateralized Mortgage Obligations | — | 438,034 | — | 438,034 | ||||||||||||||||||||
Corporate Bonds | — | 9,408,761 | — | 9,408,761 | ||||||||||||||||||||
U.S. Government Agency Backed Mortgages | — | 821,425 | — | 821,425 | ||||||||||||||||||||
Investment Company | 624,927 | — | — | 624,927 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 624,927 | $ | 14,194,998 | $ | — | $ | 14,819,925 | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Other Financial Instruments(*) | ||||||||||||||||||||||||
Interest Rate Contracts | $ | (188 | ) | $ | — | $ | — | $ | (188 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
* Other financial instruments are futures contracts which are reflected in the Schedule of Portfolio Investments and are shown at the unrealized appreciation/(depreciation) on the contracts.
During the year ended March 31, 2017, the Funds held no investments categorized as Level 3 in the hierarchy.
During the year ended March 31, 2017, the Funds recognized no transfers to/from Level 1 or Level 2. The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the year utilizing fair value at the beginning of the year.
Financial Instruments:
TBA Commitments:
The Funds may enter into TBA commitments to purchase or sell securities for a fixed price at a future date. TBA commitments are considered securities in themselves, and involve a risk of loss if the value of the security to be purchased/sold declines/increases prior to settlement date, which is in addition to the risk of decline in the value of a Fund’s other assets. Unsettled TBA commitments are valued at the current value of the underlying securities, according to the procedures described under “Security Valuation”. As of March 31, 2017, the Funds had no outstanding TBA commitments.
Derivatives:
The Funds may use derivative instruments, including futures, forwards, options, indexed securities, swaps and inverse securities for hedging purposes only. Derivatives allow the Funds to manage its risk exposure more quickly and efficiently than other types of instruments. Derivatives may be riskier than other types of investments and could result in losses that significantly exceed a Fund’s original investment. Derivatives are subject to the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index. The use of derivatives may not be successful, resulting in losses to a Fund, and the cost of such strategies may reduce the Funds’ returns.
Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Funds, in which case any losses on the holdings being hedged may not be reduced and may be increased. There can be no assurance that the Funds’ hedging strategy will reduce risk or that hedging transactions will be available or cost effective. The Funds are subject to interest rate risk in the normal course of pursuing their investment objectives by investing in various derivative financial instruments, as described below. For open derivative instruments as of March 31, 2017, see the following section for financial futures contracts.
33 |
NOTES TO FINANCIAL STATEMENTS |
Financial Futures Contracts:
The Funds entered into futures contracts in an effort to both manage their cash position and hedge against certain market risk. A futures contract on a securities index is an agreement obligating one party to pay, and entitling the other party to receive, during the term of the contract, cash payments based on the level of a specified securities index. Futures transactions involve brokerage costs and require a Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if a Fund had not entered into any futures transactions.
Upon entering into a futures contract, a Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets equal to a certain percentage of the contract amount. Subsequent payments are made or received by the Funds each day, depending on the daily fluctuations in the fair value of the underlying instrument. A Fund would record an unrealized gain or loss each day equal to these daily payments.
Open futures contracts are shown on the Schedules of Portfolio Investments. Underlying collateral pledged for open futures contracts is the cash at brokers shown on the Statements of Assets and Liabilities at March 31, 2017.
Fair value of derivative instruments as of March 31, 2017:
Derivative Instruments Categorized by Risk Exposure | Statement of Assets and Liabilities Location | Amount | ||||
Short Duration Fixed Income Fund | ||||||
Asset Derivatives | ||||||
Interest Rate Risk | Unrealized Appreciation on Futures Contracts | $ | 2,625 | |||
|
| |||||
Liability Derivatives | ||||||
Interest Rate Risk | Unrealized Depreciation on Futures Contracts | $ | 9,789 | |||
|
|
Derivative Instruments Categorized by Risk Exposure | Statement of Assets and Liabilities Location | Amount | ||||
Ultra-Short Fixed Income Fund | ||||||
Liability Derivatives | ||||||
Interest Rate Risk | Unrealized Depreciation on Futures Contracts | $ | 188 | |||
|
|
The effect of derivative instruments on the Statements of Operations during the year ended March 31, 2017 is as follows:
Derivative Instruments Categorized by Risk Exposure | Net Realized Gains from Futures Contracts | Net Change in Unrealized Appreciation/(Depreciation) on Futures Contracts | ||||
Short Duration Fixed Income Fund | Interest Rate Risk | $7,741 | $(6,664) | |||
Ultra-Short Fixed Income Fund | Interest Rate Risk | 1,182 | (2,219) |
For the year ended March 31, 2017, the average quarterly volume of derivative activities are as follows:
Futures Long Positions (Contracts) | Futures Short Positions (Contracts) | |||||||
Short Duration Fixed Income Fund | 13 | 10 | ||||||
Ultra-Short Fixed Income Fund | 5 | 12 |
34 |
NOTES TO FINANCIAL STATEMENTS |
Counterparty Credit Risk:
Derivatives may also expose a Fund to counterparty risk (the risk that the derivative counterparty will not fulfill its contractual obligations). To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds’ maximum risk of loss from counterparty credit risk on over-the-counter derivatives is generally the aggregate unrealized gain in excess of any collateral pledged by the counterparty to the Funds.
With exchange-traded futures, the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, the Funds do not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Credit Enhancement:
Certain obligations held in the Funds have credit enhancement or liquidity features that may, under certain circumstances, provide for repayment of principal and interest on the obligation upon demand date, interest rate reset date or final maturity. These enhancements may include: letters of credit; liquidity guarantees; security purchase agreements; tender option purchase agreements; and third party insurance. As of March 31, 2017, there are no obligations with credit enhancement or liquidity features.
Affiliated Investments:
Each Fund invests in other Funds of the Trust (an “Affiliated Fund”). The Funds started to invest in U.S. Government Money Market Fund -RBC Institutional Class 1 on June 24, 2016. For the period from April 1, 2016 until June 24, 2016 the Funds invested in Prime Money Market Fund -RBC Institutional Class 1. The income and both realized and change in unrealized gains and losses earned by each Fund from the Affiliated Funds, if any, for the period is disclosed in the Statements of Operations. The table below details the transactions of each Fund in Affiliated Funds.
Value March 31, 2016 | Purchases | Sales | Value June 24, 2016 | Dividends | ||||||||||||||||
Investments in Prime | ||||||||||||||||||||
Money Market Fund — RBC Institutional Class 1 | ||||||||||||||||||||
Short Duration Fixed Income Fund | $ | 361,980 | $ | 2,886,944 | $ | 3,248,924 | — | $ | 207 | |||||||||||
Ultra-Short Fixed Income Fund | 338,908 | 2,945,278 | 3,284,186 | — | 428 |
Value June 23, 2016 | Purchases | Sales | Value March 31, 2017 | Dividends | ||||||||||||||||
Investments in U.S. Government | ||||||||||||||||||||
Money Market Fund — RBC Institutional Class 1 | ||||||||||||||||||||
Short Duration Fixed Income Fund | $ | — | $ | 8,509,565 | $ | 8,424,680 | $ | 84,885 | $ | 1,601 | ||||||||||
Ultra-Short Fixed Income Fund | — | 8,939,574 | 8,314,647 | 624,927 | 1,348 |
35 |
NOTES TO FINANCIAL STATEMENTS |
Investment Transactions and Income:
Investment transactions are recorded one business day after trade date, except for the last day of each fiscal quarter end, when they are recorded on trade date. Dividend income is recorded on the ex-dividend date. Realized gains and losses from investment transactions are calculated based on the costs of the specific security (also known as identified cost basis). Interest income is recognized on the accrual basis and includes the amortization and accretion of premium or discount using the effective yield method. Paydown gains and losses on mortgage-backed and asset-backed securities are included in the financial statements as interest income.
Expense, Investment Income and Gain/Loss Allocation:
Each Fund pays the expenses that are directly related to its operations, such as custodian fees or advisory fees. Expenses incurred by the Trust, such as trustee or legal fees, are allocated among each of the Funds in the Trust either proportionately based upon the Funds’ relative net assets or using another reasonable basis such as equally across all Funds in the Trust, depending on the nature of the expense. Individual share classes within the Funds are charged expenses specific to that class, such as distribution fees and transfer agent fees. Within the Funds, expenses other than class specific expenses are allocated daily to each class based upon the proportion of relative net assets. Investment income and realized and unrealized gains or losses are allocated to each class of shares based upon the proportion of relative net assets.
Distributions to Shareholders:
The Funds pay out any income that it receives, less expenses, in the form of dividends and capital gains to its shareholders. Income dividends are declared daily and paid monthly. Dividends will also be paid at any time during the month upon total redemption of shares in an account. Capital gain distributions are declared and paid at least annually. Distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions are calculated based on federal income tax regulations, which may differ from US GAAP. These “book/tax” differences may be either temporary or permanent in nature. To the extent these differences are determined, as of the end of the tax year, to be permanent (e.g., reclassification of paydown gains and losses), they are reclassified within a Fund’s capital account based on their federal tax basis treatment.
For the year ended March 31, 2017, permanent difference reclassification amounts were as follows:
Increase Undistributed Net Investment Income | Decrease Accumulated Realized Gain/Loss | Decrease Paid-in-Capital | ||||||||||
Short Duration Fixed Income Fund | $ 7,119 | $ (7,119) | $— | |||||||||
Ultra-Short Fixed Income Fund | 22,701 | (22,701) | — |
3. Agreements and Other Transactions with Affiliates
The Trust has entered into investment advisory agreements with RBC GAM (US) under which RBC GAM (US) manages each Fund’s assets and furnishes related office facilities, equipment, research and personnel. The agreements require each Fund to pay RBC GAM (US) a monthly fee based upon average daily net assets. Under the terms of the advisory contracts, RBC GAM (US) is entitled to receive fees based on a percentage of the average daily net assets of each of the Funds as follows:
��
Annual Rate | ||||
Short Duration Fixed Income Fund | 0.30% | |||
Ultra-Short Fixed Income Fund | 0.25% |
RBC GAM (US) has contractually agreed to waive fees and/or make payments in order to keep total operating expenses (excluding certain fees such as interest, taxes and acquired fund fees and expenses) of Class F and Class I shares of each Fund to the following levels. This expense limitation agreement is in place until July 31, 2018.
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NOTES TO FINANCIAL STATEMENTS |
Class F Annual Rate | Class I Annual Rate | |||||||
Short Duration Fixed Income Fund | 0.45% | 0.35% | ||||||
Ultra-Short Fixed Income Fund | 0.40% | 0.30% |
Each Fund will carry forward, for a period not to exceed 3 years from the date on which a waiver or reimbursement is made by RBC GAM (US), any expenses in excess of the expense limitation and repay RBC GAM (US) such amounts, provided the Fund is able to effect such repayment and remain in compliance with the expense limitation.
The amounts subject to possible recoupment under the expense limitation agreement as of March 31, 2017 were:
FYE 3/31/15 | FYE 3/31/16 | FYE 3/31/17 | Total | |||||||||||||
Short Duration Fixed Income Fund | $212,292 | $136,348 | $136,119 | $484,759 | ||||||||||||
Ultra-Short Fixed Income Fund | 211,248 | 142,691 | 136,853 | 490,792 |
RBC GAM (US) voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to RBC GAM (US) indirectly through its investment in an affiliated money market fund. These waivers are voluntary and not subject to recoupment. These amounts are included in expenses waived/reimbursed by Advisor in the Statements of Operations. For the year ended March 31, 2017, the amounts waived were as follows:
Fees Waived | ||||
Short Duration Fixed Income Fund | $759 | |||
Ultra-Short Fixed Income Fund | $765 |
RBC GAM (US) serves as co-administrator to the Funds. BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”) serves as co-administrator and fund accounting agent. Services provided under the administrative services contract include providing day-to-day administration of matters related to the Funds, maintenance of their records and the preparation of reports. Under the terms of the administrative services contract, RBC GAM (US) does not receive a fee for its role as co-administrator. BNY Mellon receives a fee for its services payable by the Funds based on the Funds’ average net assets. BNY Mellon’s fee is included with “Accounting fees” in the Statements of Operations.
Certain Officers and Trustees of the Trust are affiliated with the Advisor. Such Officers and Trustees receive no compensation from the Funds for serving in their respective roles.
The Trust currently pays each of the independent trustees (trustees of the Trust who are not directors, officers or employees of the Advisor, either Co-Administrator or Distributor) an annual retainer of $49,000 ($46,000 prior to October 1,2016). The Board Chairperson and Audit Committee Chairperson each receive an additional retainer of $2,500 annually, and all other trustees serving as Chair of a Board committee each receive an additional retainer of $1,000 annually. In addition, independent trustees receive a quarterly meeting fee of $6,500 ($6,000 prior to October 1,2016), for each in-person Board meeting attended, a meeting fee of $1,500 for each telephonic or special board meeting attended, a $1,500 fee for each Board committee meeting attended, and are reimbursed for all out-of-pocket expenses relating to attendance at such meetings. These amounts are included in the Statement of Operations in “Trustees’ fees”.
On December 30, 2013, the Advisor invested $10 million in each Fund to provide each Fund with its initial investment assets, and on March 3, 2014, invested $10,000 in Class F of each Fund to provide the initial assets for that share class. The table below shows, as of March 31, 2017, each Fund’s net assets, the shares of each Fund held by the Advisor, and the percent of total net assets represented by the Advisor’s investment.
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NOTES TO FINANCIAL STATEMENTS |
Net Assets | Shares held by Advisor | % of Fund Net Assets | ||||||||||
Short Duration Fixed Income Fund | $ | 19,032,031 | 905,901 | 47.5% | ||||||||
Ultra-Short Fixed Income Fund | $ | 14,677,941 | 1,052,752 | 70.9% |
4. Fund Distribution
Each of the Funds has adopted a Master Distribution 12b-1 Plan (the “Plan”) in which Quasar Distributors LLC (the “Distributor”) acts as the Funds’ distributor. The Plan permits each Fund to make payments for or to reimburse the Distributor for distribution-related costs and expenses of marketing shares of Class F covered under the Plan, and/or for providing shareholder services. The Plan does not apply to Class I. The current Plan fee rate for Class F is 0.10%.
Plan fees are based on average daily net assets of Class F. The Distributor, subject to applicable legal requirements, may waive a Plan fee voluntarily, in whole or in part. For the year ended March 31, 2017, there were no fees waived by the Distributor.
5. Securities Transactions
The cost of securities purchased and proceeds from securities sold (excluding securities maturing less than one year from acquisition) for the year ended March 31, 2017 were as follows:
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||
Purchases (Excl. US Gov’t.) | $ | 12,183,115 | $ | 8,047,538 | ||||
Sales (Excl. US Gov’t.) | $ | 6,129,130 | $ | 11,220,792 |
6. Capital Share Transactions
The Trust is authorized to issue an unlimited number of shares of beneficial interest (“shares outstanding”) without par value. Transactions in shares of the Funds are summarized below:
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||
Class F | ||||||||||||||||
Proceeds from shares issued | $ | 96 | $ | 611,397 | $ | 255,000 | $ | 4,200,000 | ||||||||
Distributions reinvested | 19,934 | 22,856 | 34,635 | 52,121 | ||||||||||||
Cost of shares redeemed | (664,036 | ) | (1,253,300 | ) | (4,031,549 | ) | (454,695 | ) | ||||||||
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Change in Class F | $ | (644,006 | ) | $ | (619,047 | ) | $ | (3,741,914 | ) | $ | 3,797,426 | |||||
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Class I | ||||||||||||||||
Proceeds from shares issued | $ | 7,425,383 | $ | 2,566,155 | $ | 3,445,065 | $ | 3,751,400 | ||||||||
Distributions reinvested | 288,007 | 206,742 | 224,262 | 190,398 | ||||||||||||
Cost of shares redeemed | (2,336,596 | ) | (2,149,375 | ) | (3,165,374 | ) | (4,344,280 | ) | ||||||||
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Change in Class I | $ | 5,376,794 | $ | 623,522 | $ | 503,953 | $ | (402,482 | ) | |||||||
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Change in net assets resulting from capital transactions | $ | 4,732,788 | $ | 4,475 | $ | (3,237,961 | ) | $ | 3,394,944 | |||||||
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NOTES TO FINANCIAL STATEMENTS |
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2016 | |||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||
Class F | ||||||||||||||||
Issued | — | 61,714 | 25,726 | 424,692 | ||||||||||||
Reinvested | 1,998 | 2,302 | 3,499 | 5,285 | ||||||||||||
Redeemed | (66,762 | ) | (126,362 | ) | (407,227 | ) | (46,102 | ) | ||||||||
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Change in Class F | (64,764 | ) | (62,346 | ) | (378,002 | ) | 383,875 | |||||||||
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Class I | ||||||||||||||||
Issued | 744,665 | 260,364 | 348,477 | 380,157 | ||||||||||||
Reinvested | 28,868 | 20,846 | 22,672 | 19,302 | ||||||||||||
Redeemed | (234,105 | ) | (216,358 | ) | (320,253 | ) | (440,020 | ) | ||||||||
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Change in Class I | 539,428 | 64,852 | 50,896 | (40,561 | ) | |||||||||||
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Change in shares resulting from capital transactions | 474,664 | 2,506 | (327,106 | ) | 343,314 | |||||||||||
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7. Federal Income Taxes
It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined under Subchapter M of the Internal Revenue Code, and to distribute substantially all of its net investment income and net realized capital gains. Therefore, no federal tax liability is recorded in the financial statements of each Fund.
Fund Management has analyzed the Fund’s tax positions taken or expected to be taken on federal income tax returns for all open tax years (for the years ended March 31, 2015, March 31, 2016 and March 31, 2017) and has concluded that no provision for federal income tax is required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
As of March 31, 2017, tax cost of securities and the breakdown of unrealized appreciation (depreciation) was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||
Short Duration Fixed Income Fund | $ | 19,122,191 | $ | 83,819 | $ | (28,723 | ) | $ | 55,096 | |||||||
Ultra-Short Fixed Income Fund | 14,780,566 | 58,100 | (18,741 | ) | 39,359 |
The difference between book basis and tax basis unrealized appreciation/depreciation is attributable to the tax deferral of losses on wash sales.
The tax character of distributions during the year ended March 31, 2017 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Net Long Term Capital Gains | Total Distributions Paid | ||||||||||
Short Duration Fixed Income Fund | $ | 310,613 | $— | $310,613 | ||||||||
Ultra-Short Fixed Income Fund | 259,020 | — | 259,020 |
39 |
NOTES TO FINANCIAL STATEMENTS |
The tax character of distributions during the year ended March 31, 2016 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Net Long Term Capital Gains | Total Distributions Paid | ||||||||||
Short Duration Fixed Income Fund | $ | 230,085 | $— | $230,085 | ||||||||
Ultra-Short Fixed Income Fund | 242,520 | — | 242,520 |
As of March 31, 2017, the components of accumulated earning/(losses) on a tax basis were as follows:
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Undistributed Ordinary Income | $ | 25,766 | $ | 10 | ||||||||||||
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Accumulated Earnings | 25,766 | 10 | ||||||||||||||
Distributions Payable | (26 | ) | (11 | ) | ||||||||||||
Accumulated Capital Loss Carryforwards | (106,949 | ) | (161,390 | ) | ||||||||||||
Unrealized Appreciation/(Depreciation) | 55,096 | 39,359 | ||||||||||||||
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Total Accumulated Earnings/(Losses) | $ | (26,113 | ) | $ | (122,032 | ) | ||||||||||
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As of March 31, 2017, Short Duration Fixed Income Fund and Ultra-Short Fixed Income Fund had a short-term capital loss carryforward of $50,297 and $82,254, respectively, and a long-term capital loss carryforward of $56,652 and $79,136 respectively, available to offset future realized capital gains in accordance with the Regulated Investment Company Modernization Act of 2010. This capital loss carryforward is not subject to expiration.
During the year ended March 31, 2017, Short Duration Fixed Income Fund utilized capital losses in the amount of $25,108.
Under current tax law, capital losses realized after October 31 and ordinary losses after December 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The Short Duration Fixed Income Fund and Ultra-Short Fixed Income Fund did not have any deferred qualified late-year capital losses.
8. Subsequent Events
Fund Management has evaluated the impact of all subsequent events on the Funds and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
40 |
To the Trustees of RBC Funds Trust and the Shareholders of RBC Short Duration Fixed Income Fund and RBC Ultra-Short Fixed Income Fund:
In our opinion, the accompanying statements of assets and liabilities, including the schedule of portfolio investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of RBC Short Duration Fixed Income Fund and RBC Ultra-Short Fixed Income Fund (the “Funds,” a series of RBC Funds Trust) as of March 31, 2017, the results of each of their operations, the changes in each of their net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of March 31, 2017 by correspondence with the custodian, brokers and transfer agent, and the application of alternative auditing procedures where such confirmations had not been received, provide a reasonable basis for our opinion. The statements of changes in net assets and the financial highlights of the Funds for the periods ended March 31, 2016 and prior were audited by another independent registered public accounting firm whose report dated May 24, 2016 expressed an unqualified opinion on those statements and highlights.
PricewaterhouseCoopers LLP.
Minneapolis, Minnesota.
May 25, 2017
41 |
The Funds report a portion of the income dividends distributed during the fiscal year ended March 31, 2017 as U.S. Government Income as follows:
U.S. Government Income | ||||
Short Duration Fixed Income Fund | 0.62% | |||
Ultra-Short Fixed Income Fund | 0.21% |
The Funds report a portion of the income dividends distributed during the fiscal year ended March 31, 2017, as qualified interest income as defined in the Internal Revenue Code:
Qualified Interest Income | ||||
Short Duration Fixed Income Fund | 100.00% | |||
Ultra-Short Fixed Income Fund | 100.00% |
All reportings are based on financial information available as of the date of this annual report and, accordingly, are subject to change. It is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
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Independent Trustees(1)(2)
Lucy Hancock Bode (65)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Healthcare consultant (self-employed) (1986 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: BioSignia (2006 to 2010); Franklin Street Partners (2014 to present)
Leslie H. Garner Jr. (66)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: President and Chief Executive Officer, The Greater Cedar Rapids Community Foundation (2010 to present); President, Cornell College (1994 to 2010)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Ronald James (66)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Faculty member (part time), University of St. Thomas (2004 to present); President and Chief Executive Officer, Center for Ethical Business Cultures (2000 to January 2017)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Best Buy Co. Inc. (2004 to 2013); Bremer Financial Corporation (2004 to present)
John A. MacDonald (68)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Vice President and Treasurer, Hall Family Foundation (1988 to present); Chief Investment Officer, Chinquapin Trust Company (1999 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
H. David Rybolt (74)
Position, Term of Office and Length of Time Served with the Trust: Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Principal, HDR Associates (management-consulting) (1985 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
43 |
MANAGEMENT (Unaudited) |
Independent Trustees(1)(2)
James R. Seward (64)
Position, Term of Office and Length of Time Served with the Trust: Chairman of the Board and Trustee since January 2004
Principal Occupation(s) During Past 5 Years: Private investor (2000 to present); CFA (1987 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Brookdale Senior Living Inc. (2008 to present); Sooner Holdings (formerly Syntroleum Corporation) (1988 to 2015)
William B. Taylor (71)
Position, Term of Office and Length of Time Served with the Trust: Trustee since September 2005
Principal Occupation(s) During Past 5 Years: Consultant (2003 to present); Partner, Ernst & Young LLP (1982 to 2003)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: National Association of Corporate Directors - Heartland Chapter (2013 to present); William Henry Insurance, LLC (2005 to present); Balance Innovations LLC (2014 to present); Kansas City Symphony (1995 to present); Kansas University Endowment Association (2010 to present)
Interested Trustees(1)(2)(3)
Kathleen A. Gorman (53)(5)
Position, Term of Office and Length of Time Served with the Trust: President and Chief Executive Officer, RBC Funds (2012 to present); Chief Compliance Officer, RBC Funds (2006 to 2012); Director of Regulatory Administration, RBC Global Asset Management (U.S.) Inc. (2007 to 2012)
Number of Portfolios in Fund Complex Overseen by Trustee: 21
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Executive Officers(1)(3)(4)
Kathleen A. Gorman (53)
Position, Term of Office and Length of Time Served with the Trust: President and Chief Executive Officer since September 2012
Principal Occupation(s) During Past 5 Years: President and Chief Executive Officer, RBC Funds (2012 to present); Chief Compliance Officer, RBC Funds (2006 to 2012); Director of Regulatory Administration, RBC Global Asset Management (U.S.) Inc. (2007 to 2012)
Kathleen A. Hegna (50)
Position, Term of Office and Length of Time Served with the Trust: Chief Financial Officer and Principal Accounting Officer since May 2009 and Treasurer since March 2014
Principal Occupation(s) During Past 5 Years: Associate Vice President and Director, Mutual Fund Services, RBC Global Asset Management (U.S.) Inc. (2009 to present)
44 |
MANAGEMENT (Unaudited) |
Executive Officers(1)(3)(4)
Christina M. Weber (48)
Position, Term of Office and Length of Time Served with the Trust: Chief Compliance Officer since December 2012 and Assistant Secretary since March 2013
Principal Occupation(s) During Past 5 Years: Chief Compliance Officer, RBC Funds (2012 to present); Senior Compliance Officer, RBC Funds (March 2012 to December 2012); Compliance Manager, Minnesota Life Insurance Company (2006 to 2012)
Jay Jackson (39)
Position, Term of Office and Length of Time Served with the Trust: Chief Legal Officer and Secretary since December 2015
Principal Occupation(s) During Past 5 Years: Associate General Counsel, RBC Global Asset Management (U.S.) Inc. (2011 to present)
(1) | Except as otherwise noted, the address of each Trustee/Officer is RBC Funds Trust, 50 South Sixth Street, Suite 2350, Minneapolis, Minnesota 55402. |
(2) | All Trustees must retire on or before December 31 of the year in which they reach age 75. The Board may temporarily waive this requirement when necessary to avoid depriving the Board of a Trustee with critical skills. |
(3) | On December 31, 2009, Voyageur Asset Management Inc. changed its name to RBC Global Asset Management (U.S.) Inc. Any references to RBC Global Asset Management (U.S.) Inc. for prior periods are deemed to be references to the prior entity. |
(4) | Each officer serves in such capacity for an indefinite period of time until his or her removal, resignation or retirement. |
(5) | Kathleen A. Gorman has been determined to be an interested Trustee by virtue of her position with the Advisor. |
The Funds’ Statement of Additional Information includes information about the Funds’ Trustees. To receive your free copy of the Statement of Additional Information, call toll free: 1-800-422-2766.
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The Funds offer Class F and Class I shares.
Class F
Class F shares are intended for investors meeting certain minimum investment thresholds. This share class does not have an up-front sales charge (load). Class F shares currently include a 0.10% (10 bps) annual 12b-1 service and distribution fee.
Class I
Class I shares are intended for investors meeting certain minimum investment thresholds. This share class does not have an up-front sales charge (load) or a 12b-1 service and distribution fee.
46 |
Shareholder Expense Examples
As a shareholder of the RBC Funds, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees; 12b-1 distribution and service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from October 1, 2016 through March 31, 2017.
Actual Expenses
The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Beginning Account Value 10/1/16 | Ending Account Value 3/31/17 | Expenses Paid During Period* 10/1/16-3/31/17 | Annualized Expense Ratio During Period 10/1/16-3/31/17 | ||||||||||||||||||||||
Short Duration Fixed Income Fund | Class F | $ | 1,000.00 | $ | 1,004.60 | $ | 2.25 | 0.45 | % | ||||||||||||||||
Class I | 1,000.00 | 1,005.10 | 1.75 | 0.35 | % | ||||||||||||||||||||
Ultra-Short Fixed Income Fund | Class F | 1,000.00 | 1,006.00 | 2.00 | 0.40 | % | |||||||||||||||||||
Class I
| 1,000.00 | 1,006.50 | 1.50 | 0.30 | % |
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 10/1/16 | Ending Account Value 3/31/17 | Expenses Paid During Period* 10/1/16-3/31/17 | Annualized Expense Ratio During Period 10/1/16-3/31/17 | ||||||||||||||||||||||
Short Duration Fixed Income Fund | Class F | $ | 1,000.00 | $ | 1,022.69 | $ | 2.27 | 0.45 | % | ||||||||||||||||
Class I | 1,000.00 | 1,023.19 | 1.77 | 0.35 | % | ||||||||||||||||||||
Ultra-Short Fixed Income Fund | Class F | 1,000.00 | 1,022.94 | 2.02 | 0.40 | % | |||||||||||||||||||
Class I | 1,000.00 | 1,023.44 | 1.51 | 0.30 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 182/365 (to reflect one half year period). |
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RBC Funds
P.O. Box 701
Milwaukee, WI 53201-0701
800-422-2766
www.rbcgam.us
Performance data represents past performance and does not guarantee future results. The principal value of an investment and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
This report and the financial statements contained herein are provided for the information of RBC Funds shareholders. This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus, which contains information concerning investment objectives, risks, charges and expenses of the funds. Please read the prospectus carefully before investing.
This report and the financial statements contained herein are not intended to be a forecast of future events, a guarantee of future results, or investment advice. There is no assurance that certain securities will remain in or out of the fund’s portfolio. The views expressed in this report reflect those of the portfolio managers through the year ended March 31, 2017.
NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
RBC Global Asset Management (U.S.) Inc. serves as investment advisor for the RBC Funds. The Funds are distributed by Quasar Distributors LLC, an affiliate of U.S. Bancorp Fund Services, LLC.
The RBC Funds are pleased to offer shareholder reports printed entirely on Forest Stewardship Council® certified paper. FSC® certification ensures that the paper used in this report contains fiber from well-managed and responsibly harvested forests that meet strict environmental and socioeconomic standards. |
RBCF-FI AR 03-17
Item 2. Code of Ethics.
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
(d) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
As of the end of the period covered by the report, the registrant’s board of directors has determined that William B. Taylor is qualified to serve as an audit committee financial expert serving on its audit committee and that he is “independent,” as defined by Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Audit Fees
(a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $184,000 for 2017 and $184,000 for 2016. |
Audit-Related Fees
(b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 for 2017 and $0 for 2016. |
Tax Fees
(c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $22,500 for 2017 and $22,500 for 2016. |
Tax fees for both years relate to the review of the registrant’s tax returns. Amount requiring approval of the registrant’s audit committee is $0 and $0, respectively.
All Other Fees
(d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2017 and $0 for 2016. |
(e)(1) | Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
The Audit Committee (“Committee”) will review and approve in advance any proposal (except as set forth in (1) through (3) below) that the Trust employ the Funds’ auditor to render “permissible non-audit services” to the Funds. A “permissible non-audit service” is defined as a non-audit service that is not prohibited by Rule 2-01(c)(4) of Regulation S-X or other applicable law or regulation. The Committee will also review and approve in advance any proposal (except as set forth in (1) through (3) below) that the Adviser, and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Funds (an “Adviser-affiliated service provider”), employ the Funds’ auditor to render non-audit services, if such engagement would relate directly to the operations and financial reporting of the Funds. As a part of its review, the Committee shall consider whether the provision of such services is consistent with the auditor’s independence. (See also “Delegation” below.)
Pre-approval by the Committee of non-audit services is not required so long as:
(1) (A) with respect to the Funds, the aggregate amount of all such permissible non-audit services provided to the Funds constitutes no more than 5% of the total amount of revenues paid to the auditor by the Funds during the fiscal year in which the services are provided; or
(B) with respect to the Adviser and any Adviser-affiliated service provider, the aggregate amount of all such non-audit services provided constitutes no more than 5% of the total amount of revenues (of the type that would have to be pre-approved by the Committee) paid to the auditor by the Funds, the Adviser and any Adviser-affiliated service provider during the fiscal year in which the services are provided;
(2) such services were not recognized by the Funds at the time of the engagement to be non-audit services; and
(3) such services are promptly brought to the attention of the Committee and approved by the Committee or its delegate or delegates, as defined below, prior to the completion of the audit.
(c) | Delegation |
The Committee may delegate to one or more of its members and/or to officers of the Trust the authority to pre-approve the auditor’s provision of audit services or permissible non-audit services to the Funds up to a predetermined amount. Any pre-approval determination made by a delegate will be presented to the full Committee at its next meeting. The Committee will communicate any pre-approval made by a delegate to the Trust’s fund accounting agent, which will ensure that the appropriate disclosure is made in the Funds’ periodic reports and other documents as required under the Federal securities laws.
(e)(2) | The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
(b) | N/A |
(c) | 100% |
(d) | N/A |
(f) | The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2017 and $0 for 2016. |
(h) | The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(12.other) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RBC Funds Trust | ||
By (Signature and Title)* /s/ Kathleen A. Gorman | ||
Kathleen A. Gorman, President and Chief Executive Officer | ||
(principal executive officer) | ||
Date 5/30/2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Kathleen A. Gorman | ||
Kathleen A. Gorman, President and Chief Executive Officer | ||
(principal executive officer) | ||
Date 5/30/2017 |
By (Signature and Title)* /s/ Kathleen A. Hegna | ||
Kathleen A. Hegna, Treasurer and Chief Financial Officer | ||
(principal financial officer) | ||
Date 5/30/2017 |
* | Print the name and title of each signing officer under his or her signature. |