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)
Kathleen A. Gorman
50 South Sixth Street, Suite 2350
Minneapolis, MN 55402
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612)-376-7128
Date of fiscal year end: March 31
Date of reporting period: March 31, 2018
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 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 is 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 is 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 Portfolio Manager of Emerging Market Equities | 1 | ||||||||||
Letter from the Portfolio Manager of Global Equities | 3 | |||||||||||
Portfolio Managers | 5 | |||||||||||
Performance Summary (Unaudited) | 6 | |||||||||||
Management Discussion and Analysis (Unaudited) | ||||||||||||
- RBC Emerging Markets Equity Fund | 10 | |||||||||||
- RBC Emerging Markets Small Cap Equity Fund | 12 | |||||||||||
- RBC Emerging Markets Value Equity Fund | 14 | |||||||||||
- RBC Global Opportunities Fund | 16 | |||||||||||
- RBC International Opportunities Fund | 18 | |||||||||||
Schedule of Portfolio Investments | 20 | |||||||||||
Financial Statements | ||||||||||||
- Statements of Assets and Liabilities | 39 | |||||||||||
- Statements of Operations | 43 | |||||||||||
- Statements of Changes in Net Assets | 45 | |||||||||||
Financial Highlights | 50 | |||||||||||
Notes to Financial Statements | 61 | |||||||||||
Report of Independent Registered Public Accounting Firm | 78 | |||||||||||
Other Federal Income Tax Information (Unaudited) | 80 | |||||||||||
Management (Unaudited) | 82 | |||||||||||
Share Class Information (Unaudited) | 85 | |||||||||||
Supplemental Information (Unaudited) | 86 | |||||||||||
Approval of Investment Advisory and Sub-Advisory Agreements (Unaudited) | 88 | |||||||||||
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LETTER FROM THE PORTFOLIO MANAGER OF EMERGING MARKET EQUITIES | ||||||||
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. 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. The RBC Emerging Markets Small Cap Equity Fund invests in small capitalization companies, which involve greater risks such as more volatility and less liquidity than larger companies. The RBC Emerging Markets Value Equity Fund invests in value stocks, which may not increase in price as anticipated by the Adviser if they fall out of favor with investors or the markets favor faster growing companies. These risks are described more fully in the prospectus.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. It captures large and mid capitalization representation across emerging markets countries and covers approximately 85% of the free float-adjusted market capitalization in each country. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
The MSCI Emerging Markets Small Cap Index includes small capitalization representation across emerging markets countries. It covers approximately 14% of the free float-adjusted market capitalization in each country. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
Fund performance attribution data excludes Fund holdings that are fair valued.
Must be proceeded or accompanied by a prospectus.
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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Dear Shareholder:
Market Review
Every month except the last two for the 12- month period ending March 31, 2018 was characterized by strong returns from equity markets with very little volatility. Every month between March 2017 and the end of January 2018 posted positive returns. There were several reasons for this. All the major global economies performed strongly as growth and its partner inflation returned. The Trump regime in the U.S. settled down somewhat and the first pieces of meaningful legislation emerged, particularly in the guise of tax reform. Despite signs of discontent, the political unrest predicted at the end of 2016 failed to materialize.
This calm and steady appreciation of the market came to an abrupt end in the very last days of January. The sudden sell-off could be traced to both fundamental and technical factors. In fundamental terms, there had been legitimate concerns over the aggregate level of market valuations. This, combined with rising yields, particularly in the U.S., led investors in some quarters to reappraise their equity holdings. The decline was exacerbated by volatility spiking dramatically, both through increased trading volumes, but also from the concomitant unwind of significant short-volatility strategies. This newfound atmosphere of caution was given additional impetus right at the end of the period via a spiraling sequence of tariffs between the U.S. and China, which could put a brake on the fragile recovery which is being witnessed globally.
Portfolio Review – RBC Global Opportunities Fund
For the 12-month period ended March 31, 2018, the Fund had an annualized total return of 25.71%. That compares to an annualized total return of 14.85% for the MSCI ACWI Net Total Return USD Index, the Fund’s primary benchmark.
Individual stock selection drove relative returns over the period. The fund benefited from positive security selection within the industrials, consumer staples, health care, and financials sectors.
At a Fund level, stocks that contributed most strongly were U.S. cosmetics company Estee Lauder, which saw healthy Asian and travel retail sales growth, U.S. pharmaceutical Kite Pharma, a smaller company that was acquired mid-way through the period at a substantial premium, and Nidec, a Japanese manufacturer of precision motors, which has consistently reported strong results alongside increased capital expenditure.
Stocks that detracted most from relative returns were Swiss pharmaceutical Roche, over concerns that profitability may be hit by a number of compounds coming off patent, and U.S. financial First Republic Bank, whose significant investing in staff and new market segments had a detrimental effect on near-term earnings.
Portfolio Review – RBC International Opportunities Fund
For the 12-month period ended March 31, 2018, the Fund had an annualized total return of 20.82%. That compares to an annualized total return of 16.53% for the MSCI ACWI ex USA Net Total Return USD Index, the Fund’s primary benchmark.
Individual stock selection drove relative returns over the period. Relative performance was aided due to strong security selection within the industrials and financials sectors. Negative security selection within the energy sector slightly hurt the Fund’s relative returns.
The largest contributors to relative returns were Japanese manufacturer of precision motors Nidec, which has consistently reported strong results alongside increased capital expenditure, and South African media holding company Naspers, driven by strong performance from its substantial holding in Chinese internet stock Tencent.
Stocks that detracted most from relative returns were Canadian oil pipeline operator Enbridge, which came under pressure from pipeline approval issues and U.S. tax law changes, and Swiss pharmaceutical Roche, over concerns that profitability may be hit by a number of compounds coming off patent.
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Outlook
The Funds continue to be a focused selection of global equities that we believe all carry the hallmarks of strong competitive dynamics. The Funds do not target specific sector or country over- or underweights; all positioning is driven by bottom-up stock selection. The Funds undergo continual risk analysis to ensure that the combination of stock picks does not lead to an unwanted build-up in any specific factor risk. The RBC Global Equity Team continues to look to the long term to discover companies with strong inherent qualities that will be robust enough to withstand shorter-term market forces. We will not chase style rotations or second guess central banks in our pursuit of companies with strong competitive dynamics that we are confident can outperform over the long term.
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 may focus their investments in a region or small group of countries. As a result, the Funds’ performance may be subject to greater volatility than a more geographically diversified fund. 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.
The MSCI ACWI ex USA 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 U.S. It captures large and mid capitalization representation across developed markets and emerging markets countries excluding the U.S. and covers approximately 85% the global investable equity opportunity set outside the U.S. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity performance of developed and emerging markets. It captures large and mid capitalization representation across developed markets and emerging markets countries and covers approximately 85% of the global investable equity opportunity set. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
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. is the Adviser for the RBC Funds. The Fund is sub-advised by RBC Global Asset Management (UK) Limited. The RBC Funds are distributed by Quasar Distributors, LLC.
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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 Equity
Philippe Langham is Head of Emerging Market Equity 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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Laurence Bensafi
Senior Portfolio Manager and Deputy Head of Emerging Markets Equity
Laurence Bensafi is Deputy Head of Emerging Markets Equity at RBC GAM (UK) and is responsible for portfolio management of RBC Emerging Markets Value Equity Fund. Prior to joining RBC GAM (UK) in 2013, Laurence was the Head of Aviva Investors’ Emerging Markets team, where she was responsible for managing Global Emerging Markets income funds and for developing quantitative stock selection and analysis models. Laurence began her investment career as a Quantitative Analyst at Societe Generale Asset Management, supporting European and Global Equity portfolio management by developing quantitative models to assist in the portfolio construction and security selection process. Laurence obtained a Magistere d’Economiste Statisticien & D.E.S.S. Statistique et Econometrie from Toulouse University in France. Laurence is a CFA charterholder.
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Habib Subjally
Senior Portfolio Manager and Head of Global Equity
Habib Subjally is Head of Global Equity 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 2006, 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. | ||||||
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1 Year | 3 Year | Since Inception(a) | Net Expense Ratio(b)(c) | Gross Expense Ratio(b)(c) | ||||||||||||
Average Annual Total Returns as of March 31, 2018 (Unaudited) | ||||||||||||||||
RBC Emerging Markets Equity Fund | ||||||||||||||||
Class A | ||||||||||||||||
- Including Max Sales Charge of 5.75% | 13.45% | 4.96% | 6.53% | |||||||||||||
- At Net Asset Value | 20.42% | 7.05% | 8.02% | 1.03% | 1.55% | |||||||||||
Class I | ||||||||||||||||
- At Net Asset Value | 20.81% | 7.29% | 8.26% | 0.78% | 1.18% | |||||||||||
Class R6 | ||||||||||||||||
- At Net Asset Value | 20.63% | 7.32% | 8.44% | 0.77% | 1.09% | |||||||||||
MSCI Emerging Markets | ||||||||||||||||
Net Total Return | ||||||||||||||||
USD Index(d) | 24.93% | 8.81% | 6.46% | |||||||||||||
RBC Emerging Markets Small Cap Equity Fund | ||||||||||||||||
Class A | ||||||||||||||||
- Including Max Sales Charge of 5.75% | 9.82% | 3.88% | 4.69% | |||||||||||||
- At Net Asset Value | 16.53% | 5.96% | 6.15% | 1.77% | 4.66% | |||||||||||
Class I | ||||||||||||||||
- At Net Asset Value | 16.89% | 6.26% | 6.43% | 1.52% | 4.43% | |||||||||||
MSCI Emerging Markets | ||||||||||||||||
Small Cap Net Total Return | ||||||||||||||||
USD Index(d) | 18.62% | 7.23% | 6.67% | |||||||||||||
RBC Emerging Markets Value Equity Fund | ||||||||||||||||
Class I | ||||||||||||||||
- At Net Asset Value | N/A | N/A | 1.90% | 1.11%(e) | 9.98%(e) | |||||||||||
Class R6 | ||||||||||||||||
- At Net Asset Value | N/A | N/A | 1.90% | 1.06%(e) | 9.60%(e) | |||||||||||
MSCI Emerging Markets | ||||||||||||||||
Net Total Return | ||||||||||||||||
USD Index(d) | N/A | N/A | 0.95% | |||||||||||||
RBC Global Opportunities Fund | ||||||||||||||||
Class I | ||||||||||||||||
- At Net Asset Value | 25.71% | 12.04% | 11.84% | 0.94% | 2.52% | |||||||||||
Class R6 | ||||||||||||||||
- At Net Asset Value | 25.80% | 12.09% | 11.89% | 0.90% | 30.59% | |||||||||||
MSCI ACWI Net | ||||||||||||||||
Total Return USD Index(d) | 14.85% | 8.12% | 7.47% | |||||||||||||
RBC International Opportunities Fund | ||||||||||||||||
Class I | ||||||||||||||||
- At Net Asset Value | 20.82% | 5.49% | 5.61% | 0.94% | 1.32% | |||||||||||
Class R6 | ||||||||||||||||
- At Net Asset Value | 20.75% | 5.52% | 5.64% | 0.89% | 30.23% | |||||||||||
MSCI ACWI ex US Index(d) | 16.53% | 6.19% | 5.71% |
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
6 |
PERFORMANCE SUMMARY | ||
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. Please see footnotes below.
(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, February 9, 2018 for RBC Emerging Markets Value Equity Fund for Class I and 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) The Funds’ expenses reflect actual expenses for the most recent fiscal year ended March 31, 2018, except for RBC Emerging Markets Value Equity Fund which is for the period February 9, 2018 (commencement of operations) to March 31, 2018.
(c) 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, 2019 (September 30, 2018 for RBC Emerging Markets Equity Fund). For Emerging Markets Equity Fund, effective January 2, 2018, the annual rate under the expense limitation agreement is 1.13% for Class A, 0.88% for Class I and 0.88% for Class R6. For Emerging Markets Small Cap Equity Fund, effective October 2, 2017, the annual rate under the expense limitation agreement is 1.70% for Class A and 1.45% for Class I. For Global Opportunities Fund, effective October 2, 2017, the annual rate under the expense limitation agreement is 0.86% for Class I and 0.81% for Class R6. For International Opportunities Fund, effective October 2, 2017, the annual rate under the expense limitation agreement is 0.89% for Class I and 0.84% for Class R6. The ratio of net expenses to average net assets represents a blended percentage for the year ended March 31, 2018.
(d) 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.
(e) Annualized. |
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PERFORMANCE SUMMARY | ||
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. It captures large and mid capitalization representation across emerging markets countries and covers approximately 85% of the free float-adjusted market capitalization in each country. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
The MSCI Emerging Markets Small Cap Index includes small capitalization representation across emerging markets countries. It covers approximately 14% of the free float-adjusted market capitalization in each country. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
The MSCI ACWI ex USA 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 U.S. It captures large and mid capitalization representation across developed markets and emerging markets countries excluding the U.S. and covers approximately 85% the global investable equity opportunity set outside the U.S. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index.
The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity performance of developed and emerging markets. It captures large and mid capitalization representation across developed markets and emerging markets countries and covers approximately 85% of the global investable equity opportunity set. The Net Index is net of any foreign withholding tax. You cannot invest directly in an index. |
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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 Total Return USD Index |
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Benchmark
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Asset Allocation as of 3/31/18 (% of Fund’s investments) & Top Five Industries (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||
* Includes U.S. dollar denominated cash equivalent investments representing 3.88% of investments.
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Naspers Ltd. | 5.85 | % | Unilever Plc | 3.38 | % | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||
Taiwan Semiconductor | 5.49 | % | Antofagasta Plc | 2.96 | % | |||||||||||||||||||||||
Manufacturing Co. Ltd. | FirstRand Ltd. | 2.76 | % | |||||||||||||||||||||||||
Housing Development Finance | 4.81 | % | Shinhan Financial Group Co. Ltd. | 2.65 | % | |||||||||||||||||||||||
Corp. Ltd. | Credicorp Ltd. | 2.57 | % | |||||||||||||||||||||||||
Tata Consultancy Services Ltd. | 4.35 | % | ||||||||||||||||||||||||||
AIA Group Ltd. | 4.09 | % | ||||||||||||||||||||||||||
* A listing of all portfolio holdings can be found beginning on page 20
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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, 2018 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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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 Total Return USD Index
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Asset Allocation as of 3/31/18 (% of Fund’s investments) & Top Five Industries (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 1.21% of investments.
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Cyient Ltd. | 4.87 | % | Delta Electronics Public Co. Ltd. - | 2.59 | % | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||
Aeon Thana Sinsap Thailand | 3.40 | % | FOR | |||||||||||||||||||||||||||||
Public Co. Ltd. | TI Financial Holdings Ltd. | 2.49 | % | |||||||||||||||||||||||||||||
Godrej Industries Ltd. | 2.98 | % | Duratex SA | 2.45 | % | |||||||||||||||||||||||||||
AVI Ltd. | 2.86 | % | Inversiones Aguas Metropolitanas | 2.39 | % | |||||||||||||||||||||||||||
Bajaj Holdings & Investment Ltd. | 2.75 | % | SA | |||||||||||||||||||||||||||||
Marico Ltd. | 2.65 | % | ||||||||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 24
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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, 2018 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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MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||
RBC Emerging Markets Value Equity Fund
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Long-term growth of capital.
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Investment
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MSCI Emerging Markets Net Total Return USD Index
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Asset Allocation as of 3/31/18 (% of Fund’s investments) & Top Five Industries (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||||||||
iShares MSCI India | 6.51 | % | Naspers Ltd. | 2.90 | % | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||
Samsung Electronics Co. Ltd. | 5.08 | % | Ping An Insurance Group Co. of | 2.23 | % | |||||||||||||||||||||||||||
China Construction Bank Corp. | 4.07 | % | China Ltd. | |||||||||||||||||||||||||||||
Alibaba Group Holding Ltd. | 3.97 | % | LUKOIL PJSC | 1.85 | % | |||||||||||||||||||||||||||
Industrial & Commercial Bank of | 3.53 | % | Petroleo Brasileiro SA | 1.79 | % | |||||||||||||||||||||||||||
China Ltd. | ||||||||||||||||||||||||||||||||
Taiwan Semiconductor | 3.00 | % | ||||||||||||||||||||||||||||||
Manufacturing Co. Ltd. | ||||||||||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 28 |
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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. Under normal circumstances, the Fund will invest at least 40% of its total assets in countries other than the United States. The Fund will normally invest in equity securities of companies domiciled in at least three countries (one of which may be the United States). The Fund will invest in securities across all market capitalizations, although the Fund may invest a significant portion of its assets in companies of one particular market capitalization category.
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Performance | For the 12-month period ended March 31, 2018, the Fund had an annualized total return of 25.71% (Class I). That compares to an annualized total return of 14.85% for the MSCI ACWI Net Total Return USD Index, the Fund’s primary benchmark.
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Factors That Made Positive Contributions | Individual stock selection drove relative returns over the period. At a Fund level, stocks that contributed most strongly were:
● U.S. cosmetics company Estee Lauder, which saw healthy Asian and travel retail sales growth, and
● U.S. pharmaceutical Kite Pharma, a smaller company that was acquired by Gilead Sciences at a substantial premium midway through the period.
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Factors That Detracted From Relative Returns | Stocks that detracted most from relative returns were:
● Swiss pharmaceutical Roche, over concerns that profitability may be hit by a number of compounds coming off patent, and
● U.S. financial FirstRepublic Bank, whose significant investing in staff and new market segments had a detrimental effect on near-term earnings.
| |||||||||||
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. | ||||||||||||
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. | ||||||||||||
16 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||
RBC Global Opportunities Fund
| ||||||||||||||||||||||||||||||||
Long-term growth of capital. |
Investment | |||||||||||||||||||||||||||||||
MSCI ACWI Net Total Return USD Index
|
| Benchmark | ||||||||||||||||||||||||||||||
|
|
Asset Allocation as of 3/31/18 (% of Fund’s investments) & Top Five Industries (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 2.08% of investments.
|
| |||||||||||||||||||||||||||||||
EOG Resources, Inc. Roche Holding AG Estee Lauder Cos, Inc. (The) HDFC Bank Ltd. UnitedHealth Group, Inc. |
|
4.59 4.57 4.54 4.39 4.38 |
% % % % % |
Fortive Corp. TJX Cos, Inc. (The) Intuit, Inc. Unilever NV First Republic Bank |
|
4.03 3.91 3.79 3.66 3.62 |
% % % % % | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 33 |
| |||||||||||||||||||||||||||||||
|
|
Growth of $100,000 Initial Investment Since Inception (12/3/14) | ||||||||||||||||||||||||||||||
The graph reflects an initial investment of $100,000 over the period from December 3, 2014 (commencement of operations) to March 31, 2018 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.
|
|
17 |
18 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||
RBC International Opportunities Fund | ||||||||||||||
Long-term growth of capital.
| Investment Objective | |||||||||||||
MSCI ACWI ex USA Net Total Return USD Index
|
Benchmark | |||||||||||||
| Asset Allocation as of 3/31/18 (% of Fund’s investments) & Top Five Industries (as of 3/31/18) (% of Fund’s net assets) | |||||||||||||
*Includes U.S. dollar denominated cash equivalent investments representing 2.05% of investments.
| ||||||||||||||
Nidec Corp. | 5.39% | AIA Group Ltd. | 4.76% | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||
Unilever NV | 5.09% | HDFC Bank Ltd. | 4.74% | |||||||||||
Deutsche Post AG | 5.04% | Roche Holding AG | 4.73% | |||||||||||
Taiwan Semiconductor | 4.97% | Anheuser-Busch InBev NV | 4.73% | |||||||||||
Manufacturing Co. Ltd. | Naspers Ltd. | 3.99% | ||||||||||||
InterContinental Hotels Group Plc | 4.09% | |||||||||||||
*A listing of all portfolio holdings can be found beginning on page 36
| ||||||||||||||
|
Growth of $100,000 Initial Investment Since Inception (12/3/14) | |||||||||||||
The graph reflects an initial investment of $100,000 over the period from December 3, 2014 (commencement of operations) to March 31, 2018 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.
| ||||||||||||||
19 |
|
RBC Emerging Markets Equity Fund
March 31, 2018
Shares | Value | |||||
| ||||||
Common Stocks — 98.48% | ||||||
Argentina — 1.37% | ||||||
135,000 | Grupo Financiero Galicia SA, ADR | $ | 8,877,600 | |||
|
| |||||
Bangladesh — 0.80% | ||||||
4,480,147 | BRAC Bank Ltd. | 5,221,423 | ||||
|
| |||||
Brazil — 6.02% | ||||||
1,239,640 | Banco do Brasil SA | 15,522,488 | ||||
826,820 | Natura Cosmeticos SA | 8,029,154 | ||||
266,466 | Raia Drogasil SA | 6,031,593 | ||||
566,760 | TOTVS SA | 4,911,479 | ||||
675,120 | WEG SA | 4,605,159 | ||||
|
| |||||
39,099,873 | ||||||
|
| |||||
Chile — 2.96% | ||||||
1,488,544 | Antofagasta Plc | 19,245,131 | ||||
|
| |||||
China — 15.38% | ||||||
75,050 | Alibaba Group Holding Ltd., ADR* | 13,774,677 | ||||
51,190 | Baidu, Inc., ADR* | 11,425,096 | ||||
2,432,600 | China Merchants Port Holdings Co. Ltd. | 5,405,397 | ||||
1,564,500 | China Mobile Ltd. | 14,339,260 | ||||
1,690,000 | China Resources Land Ltd. | 6,210,177 | ||||
7,495,500 | Dali Foods Group Co. Ltd.(a) | 6,182,877 | ||||
218,905 | Fuyao Glass Industry Group Co. Ltd., Series A | 861,814 | ||||
3,017,200 | Fuyao Glass Industry Group Co. Ltd., Series H(a) | 11,670,814 | ||||
948,740 | Hangzhou Hikvision Digital Technology Co. Ltd., Class A | 6,227,723 | ||||
1,012,882 | Midea Group Co. Ltd., Class A | 8,778,622 | ||||
1,126,500 | Ping An Insurance Group Co. of China Ltd., Series H | 11,614,979 | ||||
1,610,588 | Weifu High-Technology Group Co. Ltd., Series B | 3,406,189 | ||||
|
| |||||
99,897,625 | ||||||
|
| |||||
Hong Kong — 4.09% | ||||||
3,105,600 | AIA Group Ltd. | 26,548,776 | ||||
|
| |||||
India — 12.18% | ||||||
405,773 | Dr. Reddy’s Laboratories Ltd., ADR | 13,264,719 | ||||
117,318 | Hero MotoCorp Ltd. | 6,404,429 | ||||
1,109,263 | Housing Development Finance Corp. Ltd. | 31,245,847 | ||||
644,298 | Tata Consultancy Services Ltd. | 28,233,048 | ||||
|
| |||||
79,148,043 | ||||||
|
| |||||
Indonesia — 3.61% | ||||||
7,152,900 | Bank Central Asia Tbk PT | 12,151,253 | ||||
103,567,100 | Kalbe Farma Tbk PT | 11,319,169 | ||||
|
| |||||
23,470,422 | ||||||
|
|
20 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
| ||||||
Japan — 1.02% | ||||||
89,000 | SoftBank Group Corp. | $ | 6,649,594 | |||
|
| |||||
Korea — 7.00% | ||||||
26,280 | Amorepacific Corp. | 7,815,705 | ||||
496,600 | Hanon Systems | 5,334,525 | ||||
23,088 | NCSoft Corp. | 9,097,439 | ||||
23,619 | Samsung Fire & Marine Insurance Co. Ltd. | 5,993,939 | ||||
401,816 | Shinhan Financial Group Co. Ltd. | 17,227,686 | ||||
|
| |||||
45,469,294 | ||||||
|
| |||||
Luxembourg — 0.93% | ||||||
185,772 | Ternium SA, ADR | 6,035,732 | ||||
|
| |||||
Malaysia — 1.16% | ||||||
1,218,900 | Public Bank Berhad | 7,562,978 | ||||
|
| |||||
Mexico — 0.89% | ||||||
3,083,780 | Kimberly-Clark de Mexico SAB de CV, Series A | 5,774,030 | ||||
|
| |||||
Nigeria — 0.86% | ||||||
44,959,665 | Guaranty Trust Bank Plc | 5,599,193 | ||||
|
| |||||
Peru — 2.57% | ||||||
73,560 | Credicorp Ltd. | 16,701,062 | ||||
|
| |||||
Philippines — 2.56% | ||||||
940,370 | SM Investments Corp. | 16,641,768 | ||||
|
| |||||
South Africa — 13.42% | ||||||
667,878 | Clicks Group Ltd. | 10,318,148 | ||||
3,169,668 | FirstRand Ltd. | 17,911,022 | ||||
483,947 | Mondi Ltd. | 13,173,237 | ||||
155,210 | Naspers Ltd., N Shares | 37,981,911 | ||||
365,708 | Shoprite Holdings Ltd. | 7,807,446 | ||||
|
| |||||
87,191,764 | ||||||
|
| |||||
Taiwan — 12.46% | ||||||
10,028,000 | E.Sun Financial Holding Co. Ltd. | 6,723,854 | ||||
1,093,000 | Giant Manufacturing Co. Ltd. | 5,735,466 | ||||
830,000 | MediaTek, Inc. | 9,692,870 | ||||
4,288,530 | Standard Foods Corp. | 9,972,299 | ||||
4,198,000 | Taiwan Semiconductor Manufacturing Co. Ltd. | 35,634,839 | ||||
5,558,468 | Uni-President Enterprises Corp. | 13,154,107 | ||||
|
| |||||
80,913,435 | ||||||
|
|
21 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
| ||||||
Thailand — 2.57% | ||||||
2,648,400 | Central Pattana Public Co. Ltd. - FOR | $ | 6,606,178 | |||
4,634,200 | Delta Electronics Public Co. Ltd. - FOR | 10,077,570 | ||||
|
| |||||
16,683,748 | ||||||
|
| |||||
Turkey — 1.67% | ||||||
7,886,735 | Enka Insaat ve Sanayi AS | 10,838,005 | ||||
|
| |||||
United Kingdom — 3.38% | ||||||
395,927 | Unilever Plc | 21,959,072 | ||||
|
| |||||
United States — 1.58% | ||||||
2,243,600 | Samsonite International SA | 10,261,809 | ||||
|
| |||||
Total Common Stocks (Cost $584,769,628) | 639,790,377 | |||||
|
| |||||
Preferred Stocks — 0.40% | ||||||
Korea — 0.40% | ||||||
14,843 | Samsung Fire & Marine Insurance Co. Ltd. | 2,569,222 | ||||
|
| |||||
Total Preferred Stocks (Cost $2,382,416) | 2,569,222 | |||||
|
| |||||
Investment Company — 3.99% | ||||||
25,928,196 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | 25,928,195 | ||||
|
| |||||
Total Investment Company | 25,928,195 | |||||
|
| |||||
(Cost $25,928,196) | ||||||
Total Investments (Cost $613,080,240)(b) — 102.87% | $ | 668,287,794 | ||||
Liabilities in excess of other assets — (2.87)% | (18,646,685 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 649,641,109 | ||||
|
|
(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) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
* | Non-income producing security. |
Abbreviations used are defined below:
ADR - American Depositary Receipt
FOR - Foreign Ownership Receipt
22 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Equity Fund (cont.)
March 31, 2018
Portfolio Diversification (Unaudited) | ||||||||
Industries | Percentage of Net Assets | |||||||
Financials | 29.47% | |||||||
Information Technology | 18.32% | |||||||
Consumer Staples | 14.94% | |||||||
Consumer Discretionary | 13.92% | |||||||
Industrials | 7.32% | |||||||
Materials | 5.92% | |||||||
Health Care | 3.79% | |||||||
Telecommunication Services | 3.23% | |||||||
Real Estate | 1.97% | |||||||
Other* | 1.12% | |||||||
|
| |||||||
100.00% | ||||||||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to the Financial Statements.
23 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund
March 31, 2018
Shares | Value | |||||
Common Stocks — 94.21% | ||||||
Bangladesh — 1.43% | ||||||
61,158 | Delta Brac Housing Finance Corp Ltd. | $ | 97,475 | |||
|
| |||||
Brazil — 8.18% | ||||||
46,600 | Duratex SA | 167,263 | ||||
19,100 | Mahle-Metal Leve SA | 140,873 | ||||
9,500 | Natura Cosmeticos SA | 92,254 | ||||
6,000 | TOTVS SA | 51,995 | ||||
9,200 | Wilson Sons Ltd., BDR | 106,450 | ||||
|
| |||||
558,835 | ||||||
|
| |||||
Chile — 5.41% | ||||||
88,730 | Inversiones Aguas Metropolitanas SA | 163,223 | ||||
36,323 | Parque Arauco SA | 109,432 | ||||
49,942 | SONDA SA | 96,956 | ||||
|
| |||||
369,611 | ||||||
|
| |||||
China — 6.35% | ||||||
294,000 | China Bluechemical Ltd., Class H | 83,095 | ||||
151,000 | Goodbaby International Holdings Ltd. | 103,397 | ||||
116,900 | Luthai Textile Co. Ltd., B Shares | 128,818 | ||||
46,000 | Vitasoy International Holdings Ltd. | 118,713 | ||||
|
| |||||
434,023 | ||||||
|
| |||||
Egypt — 1.09% | ||||||
15,994 | Integrated Diagnostics Holdings Plc(a) | 74,372 | ||||
|
| |||||
Hong Kong — 0.84% | ||||||
136,000 | Public Financial Holdings Ltd. | 57,796 | ||||
|
| |||||
India — 19.15% | ||||||
4,587 | Bajaj Holdings & Investment Ltd. | 187,763 | ||||
31,075 | Cyient Ltd. | 332,947 | ||||
24,044 | Godrej Industries Ltd. | 203,904 | ||||
36,026 | Marico Ltd. | 181,107 | ||||
5,687 | Sundaram Finance Holdings Ltd.*,(b) | 27,074 | ||||
5,687 | Sundaram Finance Ltd. | 147,590 | ||||
17,001 | TI Financial Holdings Ltd. | 170,208 | ||||
17,002 | Tube Investments of India Ltd. | 58,308 | ||||
|
| |||||
1,308,901 | ||||||
|
| |||||
Indonesia — 2.33% | ||||||
341,000 | Acset Indonusa Tbk PT | 71,692 | ||||
892,500 | Selamat Sempurna Tbk PT | 87,269 | ||||
|
| |||||
158,961 | ||||||
|
| |||||
Korea — 9.11% | ||||||
13,587 | DGB Financial Group, Inc. | 148,502 |
24 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
1,651 | Koh Young Technology, Inc. | $ | 154,583 | |||
1,120 | Leeno Industrial, Inc. | 61,574 | ||||
1,305 | Loen Entertainment, Inc. | 134,430 | ||||
8,273 | Macquarie Korea Infrastructure Fund | 68,302 | ||||
81 | Medy-Tox, Inc. | 55,634 | ||||
|
| |||||
623,025 | ||||||
|
| |||||
Malaysia — 1.97% | ||||||
105,700 | Bermaz Auto Berhad | 59,026 | ||||
14,800 | LPI Capital Berhad | 75,837 | ||||
|
| |||||
134,863 | ||||||
|
| |||||
Mexico — 3.68% | ||||||
83,400 | Corp. Inmobiliaria Vesta SAB de CV | 123,816 | ||||
50,500 | Grupo Herdez SAB de CV | 127,750 | ||||
|
| |||||
251,566 | ||||||
|
| |||||
Nigeria — 0.76% | ||||||
416,363 | Guaranty Trust Bank Plc | 51,853 | ||||
|
| |||||
Pakistan — 0.66% | ||||||
9,150 | Packages Ltd. | 45,227 | ||||
|
| |||||
Philippines — 5.30% | ||||||
437,750 | Century Pacific Food, Inc. | 143,628 | ||||
323,094 | Integrated Micro-Electronics, Inc. | 96,650 | ||||
26,370 | Security Bank Corp. | 121,970 | ||||
|
| |||||
362,248 | ||||||
|
| |||||
South Africa — 6.00% | ||||||
20,906 | AVI Ltd. | 195,164 | ||||
7,413 | Clicks Group Ltd. | 114,525 | ||||
14,499 | Oceana Group Ltd. | 100,573 | ||||
|
| |||||
410,262 | ||||||
|
| |||||
Sri Lanka — 1.01% | ||||||
44,089 | Hatton National Bank Plc | 69,334 | ||||
|
| |||||
Taiwan — 11.10% | ||||||
27,000 | Chroma ATE, Inc. | 156,498 | ||||
18,000 | Giant Manufacturing Co. Ltd. | 94,454 | ||||
19,800 | Pacific Hospital Supply Co. Ltd. | 51,339 | ||||
4,845 | Poya International Co. Ltd. | 60,402 | ||||
67,247 | Standard Foods Corp. | 156,372 | ||||
5,300 | Voltronic Power Technology Corp. | 100,703 | ||||
52,027 | Wistron NeWeb Corp. | 138,646 | ||||
|
| |||||
758,414 | ||||||
|
|
25 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
Thailand — 7.56% | ||||||
40,700 | Aeon Thana Sinsap Thailand Public Co. Ltd., NVDR | $ | 232,330 | |||
81,400 | Delta Electronics Public Co. Ltd. - FOR | 177,013 | ||||
264,400 | MC Group Public Co. Ltd. - FOR | 107,383 | ||||
|
| |||||
516,726 | ||||||
|
| |||||
United States — 2.28% | ||||||
34,100 | Samsonite International SA | 155,967 | ||||
|
| |||||
Total Common Stocks (Cost $5,360,860) | 6,439,459 | |||||
|
| |||||
Equity Linked Security — 2.21% | ||||||
Luxembourg — 2.21% | ||||||
127,831 | Aramex PJSC | 151,480 | ||||
|
| |||||
Total Equity Linked Security (Cost $125,484) | 151,480 | |||||
|
| |||||
Preferred Stocks — 1.94% | ||||||
Korea — 1.94% | ||||||
857 | Amorepacific Corp. | 132,260 | ||||
|
| |||||
Philippines — 0.00% | ||||||
58,000 | Security Bank Corp.*,(b),(c) | 111 | ||||
|
| |||||
Total Preferred Stocks (Cost $65,361) | 132,371 | |||||
|
| |||||
Investment Company — 1.21% | ||||||
82,676 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | 82,676 | ||||
|
| |||||
Total Investment Company | 82,676 | |||||
|
| |||||
(Cost $82,676) | ||||||
Total Investments (Cost $5,634,381)(d) — 99.57% | $ | 6,805,986 | ||||
Other assets in excess of liabilities — 0.43% | 29,294 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 6,835,280 | ||||
|
|
26 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Small Cap Equity Fund (cont.)
March 31, 2018
(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) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(d) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
* | Non-income producing security. |
Abbreviations used are defined below:
BDR - Brazilian Depositary Receipt
FOR - Foreign Ownership Receipt
NVDR - Non-Voting Depository Receipt
Portfolio Diversification (Unaudited) | ||||||||
Industries | Percentage of Net Assets | |||||||
Financials | 23.52% | |||||||
Consumer Staples | 19.93% | |||||||
Consumer Discretionary | 16.54% | |||||||
Information Technology | 15.94% | |||||||
Materials | 7.31% | |||||||
Industrials | 6.67% | |||||||
Real Estate | 3.41% | |||||||
Health Care | 2.65% | |||||||
Utilities | 2.39% | |||||||
Other* | 1.64% | |||||||
|
| |||||||
100.00% | ||||||||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to the Financial Statements.
27 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Value Equity Fund
March 31, 2018
Shares | Value | |||||
| ||||||
Common Stocks — 87.40% | ||||||
Argentina — 0.85% | ||||||
400 | Banco Macro SA, ADR | $ | 43,188 | |||
|
| |||||
Bangladesh — 0.71% | ||||||
76,342 | City Bank Ltd. (The) | 36,229 | ||||
|
| |||||
Brazil — 5.70% | ||||||
7,100 | Banco do Brasil SA | 88,904 | ||||
10,196 | Camil Alimentos SA | 23,070 | ||||
4,200 | Hypera SA | 45,862 | ||||
5,000 | Suzano Papel e Celulose SA | 50,720 | ||||
6,400 | Vale SA, ADR | 81,408 | ||||
|
| |||||
289,964 | ||||||
|
| |||||
China — 24.26% | ||||||
1,100 | Alibaba Group Holding Ltd., ADR* | 201,894 | ||||
76,000 | China Communications Services Corp. Ltd., Class H | 45,730 | ||||
198,000 | China Construction Bank Corp., Class H | 206,812 | ||||
59,000 | China Lesso Group Holdings Ltd. | 45,104 | ||||
60,000 | China Machinery Engineering Corp., Class H | 31,967 | ||||
68,000 | China Petroleum & Chemical Corp., Class H | 60,322 | ||||
46,000 | CNOOC Ltd. | 68,112 | ||||
17,000 | Hua Hong Semiconductor Ltd.(a) | 34,046 | ||||
206,000 | Industrial & Commercial Bank of China Ltd., Class H | 179,526 | ||||
400 | Kweichow Moutai Co. Ltd., Class A | 43,462 | ||||
5,100 | Midea Group Co. Ltd., Class A | 44,202 | ||||
16,000 | Nexteer Automotive Group Ltd. | 24,458 | ||||
11,000 | Ping An Insurance Group Co. of China Ltd., Series H | 113,417 | ||||
28,500 | Shimao Property Holdings Ltd. | 81,740 | ||||
53,000 | SITC International Holdings Co. Ltd. | 53,040 | ||||
|
| |||||
1,233,832 | ||||||
|
| |||||
Egypt — 0.56% | ||||||
5,597 | Commercial International Bank Egypt SAE, GDR | 28,409 | ||||
|
| |||||
Hong Kong — 1.72% | ||||||
9,500 | Kingboard Chemical Holdings Ltd. | 43,920 | ||||
41,000 | Lee & Man Paper Manufacturing Ltd. | 43,779 | ||||
|
| |||||
87,699 | ||||||
|
| |||||
Hungary — 1.55% | ||||||
3,773 | MOL Hungarian Oil & Gas Plc | 41,166 | ||||
836 | OTP Bank Plc | 37,563 | ||||
|
| |||||
78,729 | ||||||
|
| |||||
Indonesia — 2.07% | ||||||
57,800 | Bank Negara Indonesia Persero Tbk PT | 36,605 |
28 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Value Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
| ||||||
137,100 | Bank Tabungan Negara Persero Tbk PT | $ | 37,963 | |||
143,800 | Bukit Asam Tbk PT | 30,913 | ||||
|
| |||||
105,481 | ||||||
|
| |||||
Korea — 14.78% | ||||||
173 | Com2uSCorp | 30,302 | ||||
242 | E-MART, Inc. | 62,095 | ||||
1,002 | GS Retail Co. Ltd. | 30,693 | ||||
771 | Hana Financial Group, Inc. | 33,092 | ||||
1,105 | ING Life Insurance Korea Ltd.(a) | 46,288 | ||||
228 | LG Chem Ltd. | 82,460 | ||||
344 | Mando Corp. | 74,874 | ||||
112 | Samsung Electronics Co. Ltd. | 258,591 | ||||
232 | SK Holdings Co. Ltd. | 64,426 | ||||
902 | SK Hynix, Inc. | 68,799 | ||||
|
| |||||
751,620 | ||||||
|
| |||||
Luxembourg — 1.15% | ||||||
1,800 | Ternium SA, ADR | 58,482 | ||||
|
| |||||
Mexico — 2.48% | ||||||
14,700 | Grupo Mexico SAB de CV, Series B | 48,959 | ||||
46,300 | PLA Administradora Industrial S de RL de CV, REIT | 77,014 | ||||
|
| |||||
125,973 | ||||||
|
| |||||
Nigeria — 0.73% | ||||||
298,762 | Guaranty Trust Bank Plc | 37,207 | ||||
|
| |||||
Pakistan — 1.02% | ||||||
28,600 | Habib Bank Ltd. | 51,615 | ||||
|
| |||||
Philippines — 0.52% | ||||||
213,100 | Vista Land & Lifescapes, Inc. | 26,568 | ||||
|
| |||||
Poland — 0.86% | ||||||
2,038 | Alior Bank SA* | 43,887 | ||||
|
| |||||
Russia — 7.67% | ||||||
632,000 | Inter RAO UES PJSC | 42,143 | ||||
1,362 | LUKOIL PJSC, ADR | 94,037 | ||||
351 | Magnit PJSC | 28,674 | ||||
2,911 | PhosAgro PJSC, GDR | 42,535 | ||||
4,795 | Sberbank of Russia PJSC, ADR | 89,558 | ||||
334,000 | Sistema PJSFC | 69,089 | ||||
724 | X5 Retail Group NV, GDR* | 24,280 | ||||
|
| |||||
390,316 | ||||||
|
|
29 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Value Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
| ||||||
South Africa — 6.03% | ||||||
1,773 | Foschini Group Ltd. (The) | $ | 33,443 | |||
5,961 | Lewis Group Ltd. | 21,239 | ||||
3,154 | MTN Group Ltd. | 31,723 | ||||
603 | Naspers Ltd., N Shares | 147,562 | ||||
3,943 | Standard Bank Group Ltd. | 72,861 | ||||
|
| |||||
306,828 | ||||||
|
| |||||
Taiwan — 11.02% | ||||||
8,000 | Accton Technology Corp. | 26,505 | ||||
29,000 | Advanced Semiconductor Engineering, Inc. | 41,774 | ||||
20,000 | Chipbond Technology Corp. | 46,027 | ||||
28,000 | Hon Hai Precision Industry Co. Ltd. | 84,988 | ||||
34,000 | Macronix International* | 62,037 | ||||
14,000 | Primax Electronics Ltd. | 30,010 | ||||
14,000 | Sercomm Corp. | 39,421 | ||||
18,000 | Taiwan Semiconductor Manufacturing Co. Ltd. | 152,793 | ||||
11,000 | Tripod Technology Corp. | 36,972 | ||||
15,000 | Wistron NeWeb Corp. | 39,973 | ||||
|
| |||||
560,500 | ||||||
|
| |||||
Thailand — 1.01% | ||||||
84,700 | Krung Thai Bank Public Co. Ltd., FOR | 51,194 | ||||
|
| |||||
Turkey — 2.71% | ||||||
11,246 | TAV Havalimanlari Holding AS | 67,748 | ||||
29,812 | Trakya Cam Sanayii AS | 38,700 | ||||
1,116 | Tupras Turkiye Petrol Rafinerileri AS | 31,172 | ||||
|
| |||||
137,620 | ||||||
|
| |||||
Total Common Stocks | 4,445,341 | |||||
|
| |||||
(Cost $4,352,813) | ||||||
Exchange Traded Funds — 6.51% | ||||||
United States — 6.51% | ||||||
9,700 | iShares MSCI India | 331,061 | ||||
|
| |||||
Total Exchange Traded Funds (Cost $344,910) | 331,061 | |||||
|
| |||||
Preferred Stocks — 5.27% | ||||||
Brazil — 4.62% | ||||||
8,800 | Alpargatas SA | 44,647 | ||||
5,200 | Banco do Estado do Rio Grande do Sul SA, Class B | 31,927 | ||||
6,000 | Centrais Eletricas Brasileiras SA, Class B | 43,745 | ||||
9,300 | Cia Energetica de Minas Gerais | 24,000 | ||||
14,000 | Petroleo Brasileiro SA* | 90,790 | ||||
|
| |||||
235,109 | ||||||
|
|
30 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Value Equity Fund (cont.)
March 31, 2018
Shares | Value | |||||
Colombia — 0.65% | ||||||
3,057 | Banco Davivienda SA | $ | 32,954 | |||
|
| |||||
Total Preferred Stocks | 268,063 | |||||
|
| |||||
(Cost $264,298) | ||||||
Rights/Warrants — 0.50% | ||||||
Vietnam — 0.50% | ||||||
$9,530 | Hoa Phat Group JSC, Warrants, Expire 11/20/20* | 25,403 | ||||
|
| |||||
Total Rights/Warrants (Cost $25,695) | 25,403 | |||||
|
| |||||
Total Investments (Cost $4,987,716)(b) — 99.68% | $ | 5,069,868 | ||||
Other assets in excess of liabilities — 0.32% | 16,138 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 5,086,006 | ||||
|
|
(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) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
* | Non-income producing security. |
Abbreviations used are defined below:
ADR - American Depositary Receipt
FOR - Foreign Ownership Receipt
GDR - Global Depositary Receipt
REIT - Real Estate Investment Trust
31 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Emerging Markets Value Equity Fund (cont.)
March 31, 2018
Portfolio Diversification (Unaudited) | |||||
Industries | Percentage of Net Assets | ||||
Financials | 25.54 | % | |||
Information Technology | 23.56 | % | |||
Energy | 8.19 | % | |||
Materials | 8.03 | % | |||
Consumer Discretionary | 7.68 | % | |||
Industrials | 5.92 | % | |||
Consumer Staples | 4.17 | % | |||
Real Estate | 3.64 | % | |||
Telecommunication Services | 2.88 | % | |||
Utilities | 2.16 | % | |||
Health Care | 0.90 | % | |||
Other* | 7.33 | % | |||
|
| ||||
100.00 | % | ||||
|
|
* | Includes cash, exchange traded funds, interest and dividend receivable, pending trades and Fund share transactions, warrants, and accrued expenses payable. |
See Notes to the Financial Statements.
32 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund
March 31, 2018
Shares | Value | |||||
Common Stocks — 97.95% | ||||||
Belgium — 2.89% | ||||||
2,956 | Anheuser-Busch InBev NV | $ | 325,003 | |||
|
| |||||
Germany — 3.19% | ||||||
8,196 | Deutsche Post AG | 358,980 | ||||
|
| |||||
Hong Kong — 2.54% | ||||||
33,399 | AIA Group Ltd. | 285,517 | ||||
|
| |||||
India — 4.39% | ||||||
5,000 | HDFC Bank Ltd., ADR | 493,850 | ||||
|
| |||||
Ireland — 1.95% | ||||||
2,140 | Paddy Power Betfair Plc | 219,219 | ||||
|
| |||||
Japan — 4.50% | ||||||
4,400 | MISUMI Group, Inc. | 120,788 | ||||
2,499 | Nidec Corp. | 384,931 | ||||
|
| |||||
505,719 | ||||||
|
| |||||
South Africa — 2.50% | ||||||
1,148 | Naspers Ltd., N Shares | 280,931 | ||||
|
| |||||
Switzerland — 4.57% | ||||||
2,240 | Roche Holding AG | 513,849 | ||||
|
| |||||
Taiwan — 3.34% | ||||||
8,600 | Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 376,336 | ||||
|
| |||||
United Kingdom — 11.47% | ||||||
3,787 | Croda International Plc | 243,282 | ||||
5,228 | InterContinental Hotels Group Plc | 313,222 | ||||
2,594 | Rio Tinto Plc | 131,630 | ||||
12,509 | St. James’s Place Plc | 190,710 | ||||
7,300 | Unilever NV | 412,052 | ||||
|
| |||||
1,290,896 | ||||||
|
| |||||
United States — 56.61% | ||||||
278 | Alphabet, Inc., Class A* | 288,325 | ||||
230 | Amazon.com, Inc.* | 332,888 | ||||
10,800 | Blackstone Group LP (The), MLP | 345,060 | ||||
1,600 | Citigroup, Inc. | 108,000 | ||||
4,000 | Danaher Corp. | 391,640 | ||||
4,900 | EOG Resources, Inc. | 515,823 | ||||
3,412 | Estee Lauder Cos, Inc. (The), Class A | 510,845 |
33 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund (cont.)
March 31, 2018
Shares | Value | |||||
4,400 | First Republic Bank | $ | 407,484 | |||
5,850 | Fortive Corp. | 453,492 | ||||
2,331 | Gartner, Inc.* | 274,172 | ||||
2,100 | Incyte Corp.* | 174,993 | ||||
2,462 | Intuit, Inc. | 426,788 | ||||
1,100 | MarketAxess Holdings, Inc. | 239,184 | ||||
3,600 | Microsoft Corp. | 328,572 | ||||
1,200 | Mohawk Industries, Inc.* | 278,664 | ||||
1,500 | SVB Financial Group* | 360,015 | ||||
5,400 | TJX Cos, Inc. (The) | 440,424 | ||||
2,300 | UnitedHealth Group, Inc. | 492,200 | ||||
|
| |||||
6,368,569 | ||||||
|
| |||||
Total Common Stocks | 11,018,869 | |||||
|
| |||||
(Cost $8,869,084) | ||||||
Investment Company — 2.08% | ||||||
234,335 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | 234,335 | ||||
|
| |||||
Total Investment Company | 234,335 | |||||
|
| |||||
(Cost $234,335) | ||||||
Total Investments | $ | 11,253,204 | ||||
(Cost $9,103,419)(a) — 100.03% | ||||||
Liabilities in excess of other assets — (0.03)% | (3,479) | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 11,249,725 | ||||
|
|
(a) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
* | Non-income producing security. |
Abbreviations used are defined below:
ADR - American Depositary Receipt
MLP - Master Limited Partnership
34 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Global Opportunities Fund (cont.)
March 31, 2018
Portfolio Diversification (Unaudited) | |||||
Industries | Percentage of Net Assets | ||||
Financials | 21.60 | % | |||
Consumer Discretionary | 16.58 | % | |||
Information Technology | 15.06 | % | |||
Health Care | 13.98 | % | |||
Industrials | 11.72 | % | |||
Consumer Staples | 11.09 | % | |||
Energy | 4.59 | % | |||
Materials | 3.33 | % | |||
Other* | 2.05 | % | |||
|
| ||||
100.00 | % | ||||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to the Financial Statements.
35 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund
March 31, 2018
Shares | Value | |||||
Common Stocks — 98.77% | ||||||
Australia — 4.48% | ||||||
87,218 | Amcor Ltd. | $ | 955,066 | |||
355,630 | Oil Search Ltd. | 1,975,422 | ||||
|
| |||||
2,930,488 | ||||||
|
| |||||
Belgium — 4.73% | ||||||
28,107 | Anheuser-Busch InBev NV | 3,090,277 | ||||
|
| |||||
Canada — 3.35% | ||||||
11,340 | Enbridge, Inc. | 356,655 | ||||
103,600 | Encana Corp. | 1,139,451 | ||||
49,500 | First Quantum Minerals Ltd. | 695,040 | ||||
|
| |||||
2,191,146 | ||||||
|
| |||||
China — 1.63% | ||||||
3,800 | NetEase, Inc., ADR | 1,065,482 | ||||
|
| |||||
Denmark — 1.79% | ||||||
23,757 | Novo Nordisk A/S, Class B | 1,168,508 | ||||
|
| |||||
France — 3.52% | ||||||
21,664 | Safran SA | 2,299,195 | ||||
|
| |||||
Germany — 6.36% | ||||||
75,193 | Deutsche Post AG | 3,293,405 | ||||
4,082 | Linde AG* | 862,566 | ||||
|
| |||||
4,155,971 | ||||||
|
| |||||
Hong Kong — 4.76% | ||||||
364,400 | AIA Group Ltd. | 3,115,138 | ||||
|
| |||||
India — 4.74% | ||||||
31,383 | HDFC Bank Ltd., ADR | 3,099,699 | ||||
|
| |||||
Ireland — 4.26% | ||||||
28,884 | CRH Plc | 978,358 | ||||
17,652 | Paddy Power Betfair Plc | 1,808,251 | ||||
|
| |||||
2,786,609 | ||||||
|
| |||||
Japan — 16.45% | ||||||
132,700 | Astellas Pharma, Inc. | 2,012,855 | ||||
68,400 | Komatsu Ltd. | 2,280,107 | ||||
25,800 | MISUMI Group, Inc. | 708,254 | ||||
22,900 | Nidec Corp. | 3,527,381 |
36 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund (cont.)
March 31, 2018
Shares | Value | |||||
11,400 | Shin-Etsu Chemical Co. Ltd.* | $ | 1,179,052 | |||
39,600 | Tokyo Gas Co. Ltd. | 1,050,058 | ||||
|
| |||||
10,757,707 | ||||||
|
| |||||
Korea — 1.01% | ||||||
1,825 | LG Chem Ltd. | 660,041 | ||||
|
| |||||
Netherlands — 3.70% | ||||||
3,809 | ASML Holding NV | 755,301 | ||||
98,501 | ING Groep NV | 1,662,227 | ||||
|
| |||||
2,417,528 | ||||||
|
| |||||
South Africa — 3.99% | ||||||
10,671 | Naspers Ltd., N Shares | 2,611,333 | ||||
|
| |||||
Switzerland — 8.41% | ||||||
3,232 | Partners Group Holding AG | 2,405,011 | ||||
13,490 | Roche Holding AG | 3,094,567 | ||||
|
| |||||
5,499,578 | ||||||
|
| |||||
Taiwan — 4.97% | ||||||
74,318 | Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 3,252,156 | ||||
|
| |||||
Thailand — 2.15% | ||||||
207,000 | Kasikornbank Pcl | 1,403,390 | ||||
|
| |||||
United Kingdom — 18.47% | ||||||
30,360 | Croda International Plc | 1,950,363 | ||||
53,456 | InterContinental Hotels Group Plc | 3,202,681 | ||||
677,652 | Lloyds Banking Group Plc | 616,409 | ||||
13,081 | Rio Tinto Plc | 663,781 | ||||
151,991 | St. James’s Place Plc | 2,317,230 | ||||
58,939 | Unilever NV | 3,326,841 | ||||
|
| |||||
12,077,305 | ||||||
|
| |||||
Total Common Stocks | 64,581,551 | |||||
|
| |||||
(Cost $58,320,570) |
37 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC International Opportunities Fund (cont.)
March 31, 2018
Shares | Value | |||||
Investment Company — 2.07% | ||||||
1,349,173 | Invesco Short-Term Investments Trust Government & Agency Portfolio - Institutional Shares | $ | 1,349,173 | |||
|
| |||||
Total Investment Company | 1,349,173 | |||||
|
| |||||
(Cost $1,349,173) | ||||||
Total Investments (Cost $59,669,743)(a) — 100.84% | $ | 65,930,724 | ||||
Liabilities in excess of other assets — (0.84)% | (546,197 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 65,384,527 | ||||
|
|
(a) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
* | Non-income producing security. |
Abbreviations used are defined below:
ADR - American Depositary Receipt
Portfolio Diversification (Unaudited) | |||||
Industries | Percentage of Net Assets | ||||
Financials | 22.36 | % | |||
Industrials | 18.52 | % | |||
Materials | 12.15 | % | |||
Consumer Discretionary | 11.66 | % | |||
Consumer Staples | 9.81 | % | |||
Health Care | 9.60 | % | |||
Information Technology | 7.76 | % | |||
Energy | 5.31 | % | |||
Utilities | 1.60 | % | |||
Other* | 1.23 | % | |||
|
| ||||
100.00 | % | ||||
|
|
* | Includes cash, Investment Company, interest and dividend receivable, pending trades and Fund share transactions, and accrued expenses payable. |
See Notes to the Financial Statements.
38 |
|
Statements of Assets and Liabilities
March 31, 2018
RBC Emerging Markets Equity Fund | RBC Emerging Markets Small Cap Equity Fund | RBC Emerging Markets Value Equity Fund | ||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments, at value (cost $613,080,240, $5,634,381 and $4,987,716, respectively) | $ | 668,287,794 | $ | 6,805,986 | $ | 5,069,868 | ||||||||||||||||||
Cash | — | — | 6,833 | |||||||||||||||||||||
Foreign currency, at value (cost $0, $0 and $2,218, respectively) | — | — | 2,375 | |||||||||||||||||||||
Interest and dividend receivable | 2,110,467 | 17,733 | 11,849 | |||||||||||||||||||||
Receivable from advisor | — | 6,768 | 51,534 | |||||||||||||||||||||
Receivable from affiliate | 1,035,862 | — | — | |||||||||||||||||||||
Receivable for capital shares issued | 1,042,823 | — | — | |||||||||||||||||||||
Receivable for investments sold | 21,619,611 | 71,652 | 126,833 | |||||||||||||||||||||
Prepaid expenses and other assets | 44,711 | 20,327 | 2,434 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Assets | 694,141,268 | 6,922,466 | 5,271,726 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Foreign currency overdraft, at value (cost $20,577,127, $0 and $0) | 20,575,976 | — | — | |||||||||||||||||||||
Cash overdraft | 28 | 2,193 | — | |||||||||||||||||||||
Foreign withholding tax payable | 820,542 | 23,340 | 3,944 | |||||||||||||||||||||
Payable for capital shares redeemed | 437,543 | — | — | |||||||||||||||||||||
Payable for investments purchased | 22,248,979 | 2,188 | 128,381 | |||||||||||||||||||||
Accrued expenses and other payables: | ||||||||||||||||||||||||
Investment advisory fees | 209,791 | — | — | |||||||||||||||||||||
Accounting fees | 18,819 | 10,568 | 5,570 | |||||||||||||||||||||
Audit fees | 35,920 | 35,920 | 25,717 | |||||||||||||||||||||
Trustees’ fees | 250 | 4 | 19 | |||||||||||||||||||||
Distribution fees | 14,209 | 3,986 | — | |||||||||||||||||||||
Custodian fees | 49,533 | 1,902 | 5,752 | |||||||||||||||||||||
Shareholder reports | 14,926 | 173 | 86 | |||||||||||||||||||||
Transfer agent fees | 65,601 | 1,895 | 2,199 | |||||||||||||||||||||
Other | 8,042 | 5,017 | 14,052 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Liabilities | 44,500,159 | 87,186 | 185,720 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Assets | $ | 649,641,109 | $ | 6,835,280 | $ | 5,086,006 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Assets Consists of: | ||||||||||||||||||||||||
Capital | $ | 555,545,012 | $ | 5,899,797 | $ | 4,989,305 | ||||||||||||||||||
Undistributed/(distributions in excess of) net investment income | 1,014,432 | (98,717 | ) | 6,288 | ||||||||||||||||||||
Accumulated net realized gains/(losses) from investment transactions and foreign currency | 38,793,778 | (121,015 | ) | 8,072 | ||||||||||||||||||||
Net unrealized appreciation on investments and foreign currency | 54,287,887 | 1,155,215 | 82,341 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Assets | $ | 649,641,109 | $ | 6,835,280 | $ | 5,086,006 | ||||||||||||||||||
|
|
|
|
|
|
39 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2018
RBC Emerging Markets Equity Fund | RBC Emerging Markets Small Cap Equity Fund | RBC Emerging Markets Value Equity Fund | ||||||||||||||||||||||
Net Assets | ||||||||||||||||||||||||
Class A | $ | 48,234,740 | $ | 3,069,587 | $ | N/A | ||||||||||||||||||
Class I | 556,822,105 | 3,765,693 | 2,542,922 | |||||||||||||||||||||
Class R6 | 44,584,264 | N/A | 2,543,084 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total | $ | 649,641,109 | $ | 6,835,280 | $ | 5,086,006 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Shares Outstanding (Unlimited number of shares authorized, no par value): | ||||||||||||||||||||||||
Class A | 3,696,118 | 267,281 | N/A | |||||||||||||||||||||
Class I | 42,008,089 | 327,771 | 250,000 | |||||||||||||||||||||
Class R6 | 3,348,986 | N/A | 250,000 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total | 49,053,193 | 595,052 | 500,000 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Asset Values and Redemption Prices Per Share: | ||||||||||||||||||||||||
Class A(a) | $ | 13.05 | $ | 11.48 | $ | N/A | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Class I | $ | 13.26 | $ | 11.49 | $ | 10.17 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Class R6 | $ | 13.31 | $ | N/A | $ | 10.17 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Maximum Offering Price Per Share: | ||||||||||||||||||||||||
Class A | $ | 13.85 | $ | 12.18 | $ | N/A | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Maximum Sales Charge - Class A | 5.75 | % | 5.75 | % | 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. |
40 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2018
RBC Global Opportunities Fund | RBC International Opportunities Fund | |||||||||||||||
Assets: | ||||||||||||||||
Investments, at value (cost $9,103,419 and $59,669,743, respectively) | $ | 11,253,204 | $ | 65,930,724 | ||||||||||||
Cash | 4,501 | — | ||||||||||||||
Foreign currency, at value (cost $0 and $32,163, respectively) | — | 26,744 | ||||||||||||||
Interest and dividend receivable | 20,693 | 198,201 | ||||||||||||||
Receivable from advisor | 11,234 | 7,213 | ||||||||||||||
Receivable for capital shares issued | 20,000 | 3,000 | ||||||||||||||
Receivable for investments sold | 45,545 | 1,167,314 | ||||||||||||||
Prepaid expenses and other assets | 8,998 | 9,024 | ||||||||||||||
|
|
|
| |||||||||||||
Total Assets | 11,364,175 | 67,342,220 | ||||||||||||||
|
|
|
| |||||||||||||
Liabilities: | ||||||||||||||||
Cash overdraft | — | 24,609 | ||||||||||||||
Foreign withholding tax payable | 3,150 | 4,370 | ||||||||||||||
Payable for capital shares redeemed | 935 | — | ||||||||||||||
Payable for investments purchased | 57,036 | 1,844,511 | ||||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Accounting fees | 10,621 | 11,279 | ||||||||||||||
Audit fees | 35,920 | 35,920 | ||||||||||||||
Trustees’ fees | 5 | 13 | ||||||||||||||
Custodian fees | 2,616 | 5,688 | ||||||||||||||
Shareholder reports | 232 | 1,038 | ||||||||||||||
Transfer agent fees | 2,029 | 26,524 | ||||||||||||||
Other | 1,906 | 3,741 | ||||||||||||||
|
|
|
| |||||||||||||
Total Liabilities | 114,450 | 1,957,693 | ||||||||||||||
|
|
|
| |||||||||||||
Net Assets | $ | 11,249,725 | $ | 65,384,527 | ||||||||||||
|
|
|
| |||||||||||||
Net Assets Consists of: | ||||||||||||||||
Capital | $ | 8,906,355 | $ | 57,595,208 | ||||||||||||
Distributions in excess of net investment income | (10,241 | ) | (108,144 | ) | ||||||||||||
Accumulated net realized gains from investment transactions and foreign currency | 203,450 | 1,640,436 | ||||||||||||||
Net unrealized appreciation on investments and foreign currency | 2,150,161 | 6,257,027 | ||||||||||||||
|
|
|
| |||||||||||||
Net Assets | $ | 11,249,725 | $ | 65,384,527 | ||||||||||||
|
|
|
|
41 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2018
RBC Global Opportunities Fund | RBC International Opportunities Fund | |||||||||||||||
Net Assets | ||||||||||||||||
Class I | $ | 11,235,976 | $ | 65,371,624 | ||||||||||||
Class R6 | 13,749 | 12,903 | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 11,249,725 | $ | 65,384,527 | ||||||||||||
|
|
|
| |||||||||||||
Shares Outstanding (Unlimited number of shares authorized, no par value): | ||||||||||||||||
Class I | 820,691 | 5,738,572 | ||||||||||||||
Class R6 | 999 | 1,128 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 821,690 | 5,739,700 | ||||||||||||||
|
|
|
| |||||||||||||
Net Asset Values and Redemption Prices Per Share: | ||||||||||||||||
Class I | $ | 13.69 | $ | 11.39 | ||||||||||||
|
|
|
| |||||||||||||
Class R6(a) | $ | 13.77 | $ | 11.44 | ||||||||||||
|
|
|
|
(a) | Net asset value for Global Opportunities Fund is calculated using unrounded net assets of $13,749.20 divided by the unrounded shares outstanding of 998.659 |
See Notes to the Financial Statements.
42 |
FINANCIAL STATEMENTS |
For the Year Ended March 31, 2018
RBC Emerging Markets Equity Fund | RBC Emerging Markets Small Cap Equity Fund | RBC Emerging Markets Value Equity Fund | ||||||||||||||||||||||
Investment Income: | ||||||||||||||||||||||||
Dividend income | $ | 10,867,274 | $ | 156,831 | $ | 21,555 | ||||||||||||||||||
Foreign tax withholding | (1,092,029 | ) | (15,249 | ) | (2,568 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Investment Income | 9,775,245 | 141,582 | 18,987 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Investment advisory fees | 4,745,917 | 75,969 | 6,311 | |||||||||||||||||||||
Distribution fees–Class A | 96,778 | 7,096 | — | |||||||||||||||||||||
Accounting fees | 88,432 | 58,214 | 7,888 | |||||||||||||||||||||
Audit fees | 34,920 | 34,920 | 25,717 | |||||||||||||||||||||
Custodian fees | 307,075 | 31,272 | 6,052 | |||||||||||||||||||||
Insurance fees | 5,102 | 4,039 | — | |||||||||||||||||||||
Legal fees | 47,283 | 782 | 309 | |||||||||||||||||||||
Registrations and filing fees | 57,948 | 35,697 | 1,023 | |||||||||||||||||||||
Shareholder reports | 51,832 | 294 | 386 | |||||||||||||||||||||
Transfer agent fees–Class A | 84,008 | 3,800 | — | |||||||||||||||||||||
Transfer agent fees–Class I | 396,203 | 5,018 | 1,732 | |||||||||||||||||||||
Transfer agent fees–Class R6 | 3,699 | — | 466 | |||||||||||||||||||||
Trustees’ fees and expenses | 40,203 | 511 | 68 | |||||||||||||||||||||
Tax expense | 15,625 | 13,719 | 3,944 | |||||||||||||||||||||
Offering fees | — | — | 10,695 | |||||||||||||||||||||
Other fees | 21,656 | 4,523 | 461 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total expenses before fee waiver/reimbursement | 5,996,681 | 275,854 | 65,052 | |||||||||||||||||||||
Expenses waived/reimbursed by: | ||||||||||||||||||||||||
Advisor | (2,019,686 | ) | (176,300 | ) | (57,844 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net expenses | 3,976,995 | 99,554 | 7,208 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Investment Income | 5,798,250 | 42,028 | 11,779 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Realized/Unrealized Gains/(Losses): | ||||||||||||||||||||||||
Net realized gains/(losses) on: | ||||||||||||||||||||||||
Investment transactions | 40,210,312 | 71,448 | 8,072 | |||||||||||||||||||||
Foreign currency transactions | (818,309 | ) | (4,269 | ) | (16,186 | ) | ||||||||||||||||||
Foreign tax | (183,069 | ) | (895 | ) | — | |||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net realized gains/(losses) | 39,208,934 | 66,284 | (8,114 | ) | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net change in unrealized appreciation/(depreciation) on: | ||||||||||||||||||||||||
Investments | 32,795,894 | 776,591 | 82,152 | |||||||||||||||||||||
Foreign currency | (159,019 | ) | (809 | ) | 189 | |||||||||||||||||||
Foreign tax | (490,354 | ) | 26,016 | — | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net unrealized gains | 32,146,521 | 801,798 | 82,341 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Change in net assets resulting from operations | $ | 77,153,705 | $ | 910,110 | $ | 86,006 | ||||||||||||||||||
|
|
|
|
|
|
43 |
FINANCIAL STATEMENTS |
Statements of Operations (cont.)
For the Year Ended March 31, 2018
RBC Global Opportunities Fund | RBC International Opportunities Fund | |||||||||||||||
Investment Income: | ||||||||||||||||
Dividend income | $ | 137,227 | $ | 1,115,546 | ||||||||||||
Foreign tax withholding | (6,671 | ) | (100,096 | ) | ||||||||||||
|
|
|
| |||||||||||||
Total Investment Income | 130,556 | 1,015,450 | ||||||||||||||
|
|
|
| |||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 72,156 | 412,443 | ||||||||||||||
Accounting fees | 48,245 | 55,929 | ||||||||||||||
Audit fees | 34,920 | 34,920 | ||||||||||||||
Custodian fees | 12,302 | 29,617 | ||||||||||||||
Insurance fees | 4,039 | 4,039 | ||||||||||||||
Legal fees | 1,001 | 5,564 | ||||||||||||||
Registrations and filing fees | 37,753 | 39,401 | ||||||||||||||
Shareholder reports | 405 | 2,828 | ||||||||||||||
Transfer agent fees–Class I | 7,121 | 80,215 | ||||||||||||||
Transfer agent fees–Class R6 | 3,549 | 3,556 | ||||||||||||||
Trustees’ fees and expenses | 740 | 4,237 | ||||||||||||||
Tax expense | 4,470 | 5,080 | ||||||||||||||
Other fees | 4,562 | 5,189 | ||||||||||||||
|
|
|
| |||||||||||||
Total expenses before fee waiver/reimbursement | 231,263 | 683,018 | ||||||||||||||
Expenses waived/reimbursed by: | ||||||||||||||||
Advisor | (146,186 | ) | (199,478 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net expenses | 85,077 | 483,540 | ||||||||||||||
|
|
|
| |||||||||||||
Net Investment Income | 45,479 | 531,910 | ||||||||||||||
|
|
|
| |||||||||||||
Realized/Unrealized Gains/(Losses): | ||||||||||||||||
Net realized gains/(losses) on: | ||||||||||||||||
Investment transactions | 645,572 | 2,994,694 | ||||||||||||||
Foreign currency transactions | (4,054 | ) | (66,055 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net realized gains | 641,518 | 2,928,639 | ||||||||||||||
|
|
|
| |||||||||||||
Net change in unrealized appreciation/ (depreciation) on: | ||||||||||||||||
Investments | 1,236,089 | 5,072,910 | ||||||||||||||
Foreign currency | 630 | (4,201 | ) | |||||||||||||
|
|
|
| |||||||||||||
Net unrealized gains | 1,236,719 | 5,068,709 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | $ | 1,923,716 | $ | 8,529,258 | ||||||||||||
|
|
|
|
See Notes to the Financial Statements.
44 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Emerging Markets Equity Fund | ||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||
From Investment Activities | ||||||||
Operations: | ||||||||
Net investment income | $ | 5,798,250 | $ | 1,593,508 | ||||
Net realized gains/(losses) from investments and foreign currency | 39,208,934 | (405,312 | ) | |||||
Net change in unrealized appreciation on investments and foreign currency | 32,146,521 | 20,304,129 | ||||||
|
|
|
| |||||
Change in net assets resulting from operations | 77,153,705 | 21,492,325 | ||||||
|
|
|
| |||||
Distributions to Class A Shareholders: | ||||||||
From net investment income | (394,944 | ) | (20,021 | ) | ||||
From net realized gains from investment transactions | (16,510 | ) | (10,581 | ) | ||||
Distributions to Class I Shareholders: | ||||||||
From net investment income | (4,395,030 | ) | (976,592 | ) | ||||
From net realized gains from investment transactions | (143,402 | ) | (454,934 | ) | ||||
Distributions to Class R6 Shareholders: | ||||||||
From net investment income | (374,473 | ) | (71,273 | ) | ||||
From net realized gains from investment transactions | (11,998 | ) | (77,763 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from shareholder distributions | (5,336,357 | ) | (1,611,164 | ) | ||||
|
|
|
| |||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 428,669,638 | 168,350,107 | ||||||
Distributions reinvested | 4,689,862 | 1,290,708 | ||||||
Cost of shares redeemed | (108,881,276 | ) | (15,002,769 | ) | ||||
|
|
|
| |||||
Change in net assets resulting from capital transactions | 324,478,224 | 154,638,046 | ||||||
|
|
|
| |||||
Payment by an affiliate | 1,035,862 | — | ||||||
|
|
|
| |||||
Net increase in net assets | 397,331,434 | 174,519,207 | ||||||
Net Assets: | ||||||||
Beginning of year | 252,309,675 | 77,790,468 | ||||||
|
|
|
| |||||
End of year | $ | 649,641,109 | $ | 252,309,675 | ||||
|
|
|
| |||||
Undistributed net investment income | $ | 1,014,432 | $ | 128,741 | ||||
|
|
|
| |||||
Share Transactions: | ||||||||
Issued | 34,084,020 | 16,265,912 | ||||||
Reinvested | 365,021 | 127,634 | ||||||
Redeemed | (8,177,330 | ) | (1,432,507 | ) | ||||
|
|
|
| |||||
Change in shares resulting from capital transactions | 26,271,711 | 14,961,039 | ||||||
|
|
|
|
See Notes to the Financial Statements.
45 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Emerging Markets Small Cap Equity Fund | ||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||
From Investment Activities | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 42,028 | $ | 35,677 | ||||||||||||
Net realized gains/(losses) from investments and foreign currency | 66,284 | (289 | ) | |||||||||||||
Net change in unrealized appreciation on investments and foreign currency | 801,798 | 622,700 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 910,110 | 658,088 | ||||||||||||||
|
|
|
| |||||||||||||
Distributions to Class A Shareholders: | ||||||||||||||||
From net investment income | (68,748 | ) | (99,845 | ) | ||||||||||||
From net realized gains from investment transactions | (3,753 | ) | — | |||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (84,303 | ) | (106,882 | ) | ||||||||||||
From net realized gains from investment transactions | (4,214 | ) | — | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (161,018 | ) | (206,727 | ) | ||||||||||||
|
|
|
| |||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 534,128 | 317,698 | ||||||||||||||
Distributions reinvested | 161,018 | 206,727 | ||||||||||||||
Cost of shares redeemed | (140,779 | ) | (109,741 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 554,367 | 414,684 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 1,303,459 | 866,045 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 5,531,821 | 4,665,776 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 6,835,280 | $ | 5,531,821 | ||||||||||||
|
|
|
| |||||||||||||
Distributions in excess of net investment income | $ | (98,717 | ) | $ | (109,854 | ) | ||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 47,802 | 34,795 | ||||||||||||||
Reinvested | 14,965 | 22,217 | ||||||||||||||
Redeemed | (12,785 | ) | (10,829 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 49,982 | 46,183 | ||||||||||||||
|
|
|
|
See Notes to the Financial Statements.
46 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Emerging Markets Value Equity Fund | ||||||||
For the Period Ended March 31, 2018(a) | ||||||||
From Investment Activities | ||||||||
Operations: | ||||||||
Net investment income | $ | 11,779 | ||||||
Net realized losses from investments and foreign currency | (8,114 | ) | ||||||
Net change in unrealized appreciation on investments and foreign currency | 82,341 | |||||||
|
| |||||||
Change in net assets resulting from operations | 86,006 | |||||||
|
| |||||||
Capital Transactions: | ||||||||
Proceeds from shares issued | 5,000,000 | |||||||
Distributions reinvested | — | |||||||
Cost of shares redeemed | — | |||||||
|
| |||||||
Change in net assets resulting from capital transactions | 5,000,000 | |||||||
|
| |||||||
Net increase in net assets | 5,086,006 | |||||||
Net Assets: | ||||||||
Beginning of period | — | |||||||
|
| |||||||
End of period | $ | 5,086,006 | ||||||
|
| |||||||
Undistributed net investment income | $ | 6,288 | ||||||
|
| |||||||
Share Transactions: | ||||||||
Issued | 500,000 | |||||||
Reinvested | — | |||||||
Redeemed | — | |||||||
|
| |||||||
Change in shares resulting from capital transactions | 500,000 | |||||||
|
|
(a) | For the period from February 9, 2018 (commencement of operations) to March 31, 2018. |
See Notes to the Financial Statements.
47 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Global Opportunities Fund | ||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||
From Investment Activities | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 45,479 | $ | 37,000 | ||||||||||||
Net realized gains/(losses) from investments and foreign currency | 641,518 | (37,308 | ) | |||||||||||||
Net change in unrealized appreciation on investments and foreign currency | 1,236,719 | 719,218 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 1,923,716 | 718,910 | ||||||||||||||
|
|
|
| |||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (57,890 | ) | (42,516 | ) | ||||||||||||
From net realized gains from investment transactions | (309,612 | ) | — | |||||||||||||
Distributions to Class R6 Shareholders: | ||||||||||||||||
From net investment income | (106 | ) | — | |||||||||||||
From net realized gains from investment transactions | (414 | ) | — | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (368,022 | ) | (42,516 | ) | ||||||||||||
|
|
|
| |||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 2,299,847 | 1,207,391 | ||||||||||||||
Distributions reinvested | 367,078 | 42,516 | ||||||||||||||
Cost of shares redeemed | (85,339 | ) | (10,645 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 2,581,586 | 1,239,262 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 4,137,280 | 1,915,656 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 7,112,445 | 5,196,789 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 11,249,725 | $ | 7,112,445 | ||||||||||||
|
|
|
| |||||||||||||
Distributions in excess of net investment income | $ | (10,241 | ) | $ | (170 | ) | ||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 171,786 | 112,152 | ||||||||||||||
Reinvested | 27,599 | 4,000 | ||||||||||||||
Redeemed | (6,347 | ) | (1,007 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 193,038 | 115,145 | ||||||||||||||
|
|
|
|
See Notes to the Financial Statements.
48 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC International Opportunities Fund | ||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||
From Investment Activities | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 531,910 | $ | 176,855 | ||||||||||||
Net realized gains/(losses) from investments and foreign currency | 2,928,639 | (455,387 | ) | |||||||||||||
Net change in unrealized appreciation on investments and foreign currency | 5,068,709 | 1,303,710 | ||||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 8,529,258 | 1,025,178 | ||||||||||||||
|
|
|
| |||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (573,719 | ) | (110,936 | ) | ||||||||||||
From net realized gains from investment transactions | (807,197 | ) | — | |||||||||||||
Distributions to Class R6 Shareholders: | ||||||||||||||||
From net investment income | (151 | ) | (4 | ) | ||||||||||||
From net realized gains from investment transactions | (192 | ) | — | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (1,381,259 | ) | (110,940 | ) | ||||||||||||
|
|
|
| |||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 39,160,594 | 18,913,370 | ||||||||||||||
Distributions reinvested | 1,367,841 | 110,939 | ||||||||||||||
Cost of shares redeemed | (7,448,076 | ) | (265,440 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 33,080,359 | 18,758,869 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 40,228,358 | 19,673,107 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 25,156,169 | 5,483,062 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 65,384,527 | $ | 25,156,169 | ||||||||||||
|
|
|
| |||||||||||||
Distributions in excess of net investment income | $ | (108,144 | ) | $ | (20,373 | ) | ||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 3,708,633 | 2,032,728 | ||||||||||||||
Reinvested | 119,671 | 12,205 | ||||||||||||||
Redeemed | (683,755 | ) | (29,014 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 3,144,549 | 2,015,919 | ||||||||||||||
|
|
|
|
See Notes to the Financial Statements.
49 |
|
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net Asset Value, | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Year | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $10.91 | 0.10 | 2.13 | 2.23 | (0.09) | —(b) | (0.09) | $13.05 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 9.81 | 0.11 | 1.10 | 1.21 | (0.07) | (0.04) | (0.11) | 10.91 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 10.99 | 0.07 | (1.11) | (1.04) | (0.10) | (0.04) | (0.14) | 9.81 | ||||||||||||||||||||||||
Year Ended 3/31/15 | 10.20 | 0.07 | 1.05 | 1.12 | (0.22) | (0.11) | (0.33) | 10.99 | ||||||||||||||||||||||||
Period Ended 3/31/14(c) | 10.00 | — | 0.20 | 0.20 | — | — | — | 10.20 | ||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $11.07 | 0.15 | 2.16 | 2.31 | (0.12) | —(b) | (0.12) | $13.26 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 9.95 | 0.12 | 1.12 | 1.24 | (0.08) | (0.04) | (0.12) | 11.07 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 11.01 | 0.06 | (1.07) | (1.01) | (0.01) | (0.04) | (0.05) | 9.95 | ||||||||||||||||||||||||
Year Ended 3/31/15 | 10.21 | 0.09 | 1.05 | 1.14 | (0.23) | (0.11) | (0.34) | 11.01 | ||||||||||||||||||||||||
Period Ended 3/31/14(c) | 10.00 | 0.01 | 0.20 | 0.21 | — | — | — | 10.21 | ||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $11.13 | 0.15 | 2.15 | 2.30 | (0.12) | —(b) | (0.12) | $13.31 | ||||||||||||||||||||||||
Period Ended 3/31/17(d) | 10.08 | 0.04 | 1.08 | 1.12 | (0.03) | (0.04) | (0.07) | 11.13 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | Less than $0.01 or $(0.01) per share. |
(c) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(d) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
50 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets |
Ratio of Net Investment | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Year Ended 3/31/18 | 20.42%(b) | $ | 48,235 | 1.03%(c) | 0.76% | 1.55% | 42% | |||||||||||||||||
Year Ended 3/31/17 | 12.42% | 5,115 | 0.98% | 1.09% | 1.80% | 19% | ||||||||||||||||||
Year Ended 3/31/16 | (9.39)% | 2,540 | 1.14%(d) | 0.71% | 2.74% | 19% | ||||||||||||||||||
Year Ended 3/31/15 | 11.17% | 2,849 | 1.45% | 0.64% | 4.96% | 37% | ||||||||||||||||||
Period Ended 3/31/14(e) | 2.00%(f) | 2,550 | 1.45%(g) | 0.04%(g) | 8.77%(g) | 11% | ||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 20.81%(b) | $ | 556,822 | 0.78%(c) | 1.20% | 1.18% | 42% | |||||||||||||||||
Year Ended 3/31/17 | 12.56% | 223,971 | 0.73% | 1.18% | 1.30% | 19% | ||||||||||||||||||
Year Ended 3/31/16 | (9.18)% | 75,250 | 0.75%(d) | 0.62% | 1.89% | 19% | ||||||||||||||||||
Year Ended 3/31/15 | 11.38% | 4,017 | 1.20% | 0.87% | 4.65% | 37% | ||||||||||||||||||
Period Ended 3/31/14(e) | 2.10%(f) | 2,551 | 1.20%(g) | 0.29%(g) | 8.52%(g) | 11% | ||||||||||||||||||
Class R6 | ||||||||||||||||||||||||
Year Ended 3/31/18 | 20.63%(b) | $ | 44,584 | 0.77%(c) | 1.16% | 1.09% | 42% | |||||||||||||||||
Period Ended 3/31/17(h) | 11.20%(f) | 23,224 | 0.73%(g) | 0.95%(g) | 1.28%(g) | 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) | 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. |
(b) | Includes a payment made by the sub-advisor (see Note 3). The impact of the payment to total returns for each class is 0.17%. |
(c) | Beginning January 2, 2018, the net operating expenses were contractually limited to 1.13%, 0.88% and 0.88% of average daily net assets for Class A, Class I and Class R6, respectively. The ratio of net expenses to average net assets represents a blended percentage for the period ended March 31, 2018. |
(d) | Beginning August 3, 2015, the net operating expenses were contractually limited to 0.975% and 0.725% of average daily net assets for Class A and Class I respectively. The ratio of net expenses to average net assets represents a blended percentage for the year ended March 31, 2016. |
51 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
(e) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
See Notes to the Financial Statements.
52 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Small Cap Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net Asset Value, | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Year | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $10.15 | 0.06 | 1.54 | 1.60 | (0.26) | (0.01) | (0.27) | $11.48 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 9.35 | 0.06 | 1.14 | 1.20 | (0.40) | — | (0.40) | 10.15 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 10.49 | 0.12 | (1.16) | (1.04) | (0.02) | (0.08) | (0.10) | 9.35 | ||||||||||||||||||||||||
Year Ended 3/31/15 | 10.37 | 0.03 | 0.44 | 0.47 | (0.20) | (0.15) | (0.35) | 10.49 | ||||||||||||||||||||||||
Period Ended 3/31/14(b) | 10.00 | 0.04 | 0.33 | 0.37 | — | — | — | 10.37 | ||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $10.15 | 0.09 | 1.55 | 1.64 | (0.29) | (0.01) | (0.30) | $11.49 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 9.35 | 0.08 | 1.15 | 1.23 | (0.43) | — | (0.43) | 10.15 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 10.49 | 0.14 | (1.15) | (1.01) | (0.05) | (0.08) | (0.13) | 9.35 | ||||||||||||||||||||||||
Year Ended 3/31/15 | 10.37 | 0.06 | 0.44 | 0.50 | (0.23) | (0.15) | (0.38) | 10.49 | ||||||||||||||||||||||||
Period Ended 3/31/14(b) | 10.00 | 0.05 | 0.32 | 0.37 | — | — | — | 10.37 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
53 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Small Cap Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets |
Ratio of Net Investment | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Year Ended 3/31/18 | 16.53% | $3,070 | 1.77%(b) | 0.55% | 4.66% | 26% | ||||||||||||||||||
Year Ended 3/31/17 | 13.24% | 2,625 | 1.85% | 0.57% | 5.02% | 38% | ||||||||||||||||||
Year Ended 3/31/16 | (9.86)% | 2,319 | 1.85% | 1.25% | 5.42% | 34% | ||||||||||||||||||
Year Ended 3/31/15 | 4.64% | 2,719 | 1.85% | 0.31% | 5.58% | 32% | ||||||||||||||||||
Period Ended 3/31/14(c) | 3.70%(d) | 2,592 | 1.85%(e) | 1.49%(e) | 8.96%(e) | 19% | ||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 16.89% | $3,766 | 1.52%(b) | 0.81% | 4.43% | 26% | ||||||||||||||||||
Year Ended 3/31/17 | 13.53% | 2,907 | 1.60% | 0.84% | 4.76% | 38% | ||||||||||||||||||
Year Ended 3/31/16 | (9.60)% | 2,347 | 1.60% | 1.50% | 5.17% | 34% | ||||||||||||||||||
Year Ended 3/31/15 | 4.93% | 2,724 | 1.60% | 0.56% | 5.32% | 32% | ||||||||||||||||||
Period Ended 3/31/14(c) | 3.70%(d) | 2,594 | 1.60%(e) | 1.74%(e) | 8.71%(e) | 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) | 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. |
(b) | Beginning October 2, 2017, the net operating expenses were contractually limited to 1.70% and 1.45% of average daily net assets for Class A and Class I, respectively. The ratio of net expenses to average net assets represents a blended percentage for the period ended March 31, 2018. |
(c) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
(d) | Not annualized. |
(e) | Annualized. |
See Notes to the Financial Statements.
54 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Value Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||
Net Asset Value, | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Asset Value, End of Year | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
Period Ended 3/31/18(b) | $10.00 | 0.02 | 0.15 | 0.17 | — | $10.17 | ||||||||||||||||||
Class R6 | ||||||||||||||||||||||||
Period Ended 3/31/18(b) | $10.00 | 0.02 | 0.15 | 0.17 | — | $10.17 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | For the period from February 9, 2018 (commencement of operations) to March 31, 2018. |
55 |
FINANCIAL HIGHLIGHTS
|
RBC Emerging Markets Value Equity Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets |
Ratio of Net Investment | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
Period Ended 3/31/18(b) | 1.90%(c) | $2,543 | 1.11%(d) | 1.75%(d) | 9.98%(d) | 27% | ||||||||||||||||||
Class R6 | ||||||||||||||||||||||||
Period Ended 3/31/18(b) | 1.90%(c) | $2,543 | 1.06%(d) | 1.80%(d) | 9.60%(d) | 27% |
* | 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) | 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. |
(b) | For the period from February 9, 2018 (commencement of operations) to March 31, 2018. |
(c) | Not annualized. |
(d) | Annualized. |
See Notes to the Financial Statements.
56 |
FINANCIAL HIGHLIGHTS
|
RBC Global Opportunities Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net Asset Value, | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Year | |||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $11.31 | 0.07 | 2.82 | 2.89 | (0.08) | (0.43) | (0.51) | $13.69 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 10.12 | 0.07 | 1.20 | 1.27 | (0.08) | — | (0.08) | 11.31 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 10.31 | 0.05 | (0.12) | (0.07) | (0.12) | — | (0.12) | 10.12 | ||||||||||||||||||||||||
Period Ended 3/31/15(b) | 10.00 | 0.01 | 0.30 | 0.31 | —(c) | — | —(c) | 10.31 | ||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $11.39 | 0.07 | 2.85 | 2.92 | (0.11) | (0.43) | (0.54) | $13.77 | ||||||||||||||||||||||||
Period Ended 3/31/17(d) | 10.42 | —(c) | 0.97 | 0.97 | — | — | — | 11.39 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
57 |
FINANCIAL HIGHLIGHTS
|
RBC Global Opportunities Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets |
Ratio of Net Investment | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 25.71% | $11,236 | 0.94%(b) | 0.50% | 2.52% | 30% | ||||||||||||||||||
Year Ended 3/31/17 | 12.58% | 7,102 | 1.05% | 0.65% | 3.26% | 36% | ||||||||||||||||||
Year Ended 3/31/16 | (0.63)% | 5,197 | 1.05% | 0.48% | 3.97% | 34% | ||||||||||||||||||
Period Ended 3/31/15(c) | 3.13%(d) | 5,155 | 1.05%(e) | 0.19%(e) | 3.46%(e) | 11% | ||||||||||||||||||
Class R6 | ||||||||||||||||||||||||
Year Ended 3/31/18 | 25.80% | $ 14 | 0.90%(b) | 0.56% | 30.59% | 30% | ||||||||||||||||||
Period Ended 3/31/17(f) | 9.31%(d) | 11 | 1.00%(e) | 0.10%(e) | 77.25%(e) | 36% |
* | 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) | 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. |
(b) | Beginning October 2, 2017, the net operating expenses were contractually limited to 0.86% and 0.81% of average daily net assets for Class I and Class R6, respectively. The ratio of net expenses to average net assets represents a blended percentage for the period ended March 31, 2018. |
(c) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
See Notes to the Financial Statements.
58 |
FINANCIAL HIGHLIGHTS
|
RBC International Opportunities Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net Asset Value, | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Year | |||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ 9.69 | 0.11 | 1.88 | 1.99 | (0.12) | (0.17) | (0.29) | $11.39 | ||||||||||||||||||||||||
Year Ended 3/31/17 | 9.47 | 0.09 | 0.18 | 0.27 | (0.05) | — | (0.05) | 9.69 | ||||||||||||||||||||||||
Year Ended 3/31/16 | 10.21 | 0.12 | (0.69) | (0.57) | (0.17) | — | (0.17) | 9.47 | ||||||||||||||||||||||||
Period Ended 3/31/15(b) | 10.00 | 0.02 | 0.19 | 0.21 | —(c) | — | —(c) | 10.21 | ||||||||||||||||||||||||
Class R6 | ||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ 9.74 | 0.13 | 1.88 | 2.01 | (0.14) | (0.17) | (0.31) | $11.44 | ||||||||||||||||||||||||
Period Ended 3/31/17(d) | 9.11 | 0.02 | 0.61 | 0.63 | —(c) | — | —(c) | 9.74 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(c) | Less than $0.01 or $(0.01) per share. |
(d) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
59 |
FINANCIAL HIGHLIGHTS
|
RBC International Opportunities Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets |
Ratio of Net Investment | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 20.82% | $65,372 | 0.94%(b) | 1.03% | 1.32% | 45% | ||||||||||||||||||
Year Ended 3/31/17 | 2.85% | 25,145 | 1.00% | 0.99% | 1.84% | 38% | ||||||||||||||||||
Year Ended 3/31/16 | (5.52)% | 5,483 | 1.00% | 1.23% | 3.92% | 35% | ||||||||||||||||||
Period Ended 3/31/15(c) | 2.12%(d) | 5,308 | 1.00%(e) | 0.59%(e) | 3.50%(e) | 8% | ||||||||||||||||||
Class R6 | ||||||||||||||||||||||||
Year Ended 3/31/18 | 20.75% | $ 13 | 0.89%(b) | 1.14% | 30.23% | 45% | ||||||||||||||||||
Period Ended 3/31/17(f) | 6.96%(d) | 11 | 0.95%(e) | 0.46%(e) | 77.08%(e) | 38% |
* | 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) | 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. |
(b) | Beginning October 2, 2017, the net operating expenses were contractually limited to 0.89% and 0.84% of average daily net assets for Class I and Class R6, respectively. The ratio of net expenses to average net assets represents a blended percentage for the period ended March 31, 2018. |
(c) | For the period from December 3, 2014 (commencement of operations) to March 31, 2015. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | For the period from November 22, 2016 (commencement of operations) to March 31, 2017. |
See Notes to the Financial Statements.
60 |
|
March 31, 2018
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 18 portfolios. Overall responsibility for the management of the Trust is vested in its Board of Trustees (the “Board”). This report includes the following five 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 Emerging Markets Value Equity Fund (“Emerging Markets Value 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 and Class I shares.
Emerging Markets Small Cap Equity Fund offers two share classes: Class A and Class I shares. Emerging Markets Value Equity Fund, Global Opportunities Fund and International Opportunities Fund each offer two share classes: Class I and Class R6 shares. 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 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 (“U.S. 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 March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in the ASU shorten the amortization period for certain callable debt securities, held at a premium, to be amortized to the earliest call date. The ASU does not require an accounting change for securities held at a discount; which continues to be amortized to maturity. The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Management is currently evaluating the impact, if any, of applying this provision.
Security Valuation:
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.
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
61 |
NOTES TO FINANCIAL STATEMENTS |
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 generally be 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 (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.
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 or other assets and liabilities. 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 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,
62 |
NOTES TO FINANCIAL STATEMENTS |
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 Funds’ 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 spreads, 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 the Funds’ investments as of March 31, 2018 is as follows:
63 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||
Emerging Markets Equity Fund Assets: | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Argentina | $ | 8,877,600 | $ | — | $— | $ | 8,877,600 | |||||||||
Bangladesh | — | 5,221,423 | — | 5,221,423 | ||||||||||||
Brazil | 39,099,873 | — | — | 39,099,873 | ||||||||||||
Chile | — | 19,245,131 | — | 19,245,131 | ||||||||||||
China | 67,759,914 | 32,137,711 | — | 99,897,625 | ||||||||||||
Hong Kong | — | 26,548,776 | — | 26,548,776 | ||||||||||||
India | 13,264,719 | 65,883,324 | — | 79,148,043 | ||||||||||||
Indonesia | — | 23,470,422 | — | 23,470,422 | ||||||||||||
Japan | 6,649,594 | — | — | 6,649,594 | ||||||||||||
Korea | 45,469,294 | — | — | 45,469,294 | ||||||||||||
Luxembourg | 6,035,732 | — | — | 6,035,732 | ||||||||||||
Malaysia | 7,562,978 | — | — | 7,562,978 | ||||||||||||
Mexico | 5,774,030 | — | — | 5,774,030 | ||||||||||||
Nigeria | — | 5,599,193 | — | 5,599,193 | ||||||||||||
Peru | 16,701,062 | — | — | 16,701,062 | ||||||||||||
Philippines | — | 16,641,768 | — | 16,641,768 | ||||||||||||
South Africa | — | 87,191,764 | — | 87,191,764 | ||||||||||||
Taiwan | 80,913,435 | — | — | 80,913,435 | ||||||||||||
Thailand | 16,683,748 | — | — | 16,683,748 | ||||||||||||
Turkey | — | 10,838,005 | — | 10,838,005 | ||||||||||||
United Kingdom | — | 21,959,072 | — | 21,959,072 | ||||||||||||
United States | — | 10,261,809 | — | 10,261,809 | ||||||||||||
Investment Company | 25,928,195 | — | — | 25,928,195 | ||||||||||||
Preferred Stocks | — | 2,569,222 | — | 2,569,222 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total Assets | $ | 340,720,174 | $ | 327,567,620 | $— | $ | 668,287,794 | |||||||||
|
|
|
|
|
|
64 |
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 Assets: | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Equity Linked Security | $ | 151,480 | $ | — | $— | $ | 151,480 | |||||||||
Common Stocks | ||||||||||||||||
Bangladesh | — | 97,475 | — | 97,475 | ||||||||||||
Brazil | 452,385 | 106,450 | — | 558,835 | ||||||||||||
Chile | 369,611 | — | — | 369,611 | ||||||||||||
China | 211,913 | 222,110 | — | 434,023 | ||||||||||||
Egypt | 74,372 | — | — | 74,372 | ||||||||||||
Hong Kong | — | 57,796 | — | 57,796 | ||||||||||||
India | — | 1,308,901 | — | 1,308,901 | ||||||||||||
Indonesia | — | 158,961 | — | 158,961 | ||||||||||||
Korea | 623,025 | — | — | 623,025 | ||||||||||||
Malaysia | 134,863 | — | — | 134,863 | ||||||||||||
Mexico | 251,566 | — | — | 251,566 | ||||||||||||
Nigeria | — | 51,853 | — | 51,853 | ||||||||||||
Pakistan | — | 45,227 | — | 45,227 | ||||||||||||
Philippines | — | 362,248 | — | 362,248 | ||||||||||||
South Africa | — | 410,262 | — | 410,262 | ||||||||||||
Sri Lanka | — | 69,334 | — | 69,334 | ||||||||||||
Taiwan | 758,414 | — | — | 758,414 | ||||||||||||
Thailand | 516,726 | — | — | 516,726 | ||||||||||||
United States | — | 155,967 | — | 155,967 | ||||||||||||
Investment Company | 82,676 | — | — | 82,676 | ||||||||||||
Preferred Stocks | — | 132,260 | 111 | 132,371 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total Assets | $ | 3,627,031 | $ | 3,178,844 | $111 | $ | 6,805,986 | |||||||||
|
|
|
|
|
|
65 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||
Emerging Markets Value Equity Fund Assets: | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Rights/Warrants | $ | — | $ | 25,403 | $— | $ | 25,403 | |||||||||
Common Stocks | ||||||||||||||||
Argentina | 43,188 | — | — | 43,188 | ||||||||||||
Bangladesh | — | 36,229 | — | 36,229 | ||||||||||||
Brazil | 289,964 | — | — | 289,964 | ||||||||||||
China | 927,332 | 306,500 | — | 1,233,832 | ||||||||||||
Egypt | — | 28,409 | — | 28,409 | ||||||||||||
Hong Kong | — | 87,699 | — | 87,699 | ||||||||||||
Hungary | — | 78,729 | — | 78,729 | ||||||||||||
Indonesia | — | 105,481 | — | 105,481 | ||||||||||||
Korea | 751,620 | — | — | 751,620 | ||||||||||||
Luxembourg | 58,482 | — | — | 58,482 | ||||||||||||
Mexico | 125,973 | — | — | 125,973 | ||||||||||||
Nigeria | — | 37,207 | — | 37,207 | ||||||||||||
Pakistan | — | 51,615 | — | 51,615 | ||||||||||||
Philippines | — | 26,568 | — | 26,568 | ||||||||||||
Poland | — | 43,887 | — | 43,887 | ||||||||||||
Russia | 366,036 | 24,280 | — | 390,316 | ||||||||||||
South Africa | — | 306,828 | — | 306,828 | ||||||||||||
Taiwan | 560,500 | — | — | 560,500 | ||||||||||||
Thailand | 51,194 | — | — | 51,194 | ||||||||||||
Turkey | — | 137,620 | — | 137,620 | ||||||||||||
Exchange Traded Funds | 331,061 | — | — | 331,061 | ||||||||||||
Preferred Stocks | 268,063 | — | — | 268,063 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total Assets | $ | 3,773,413 | $ | 1,296,455 | $— | $ | 5,069,868 | |||||||||
|
|
|
|
|
| |||||||||||
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||
Global Opportunities Fund Assets: | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Belgium | $ | — | $ | 325,003 | $— | $ | 325,003 | |||||||||
Germany | — | 358,980 | — | 358,980 | ||||||||||||
Hong Kong | — | 285,517 | — | 285,517 | ||||||||||||
India | 493,850 | — | — | 493,850 | ||||||||||||
Ireland | — | 219,219 | — | 219,219 | ||||||||||||
Japan | 505,719 | — | — | 505,719 | ||||||||||||
South Africa | — | 280,931 | — | 280,931 | ||||||||||||
Switzerland | — | 513,849 | — | 513,849 | ||||||||||||
Taiwan | 376,336 | — | — | 376,336 | ||||||||||||
United Kingdom | — | 1,290,896 | — | 1,290,896 | ||||||||||||
United States | 6,368,569 | — | — | 6,368,569 | ||||||||||||
Investment Company | 234,335 | — | — | 234,335 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total Assets | $ | 7,978,809 | $ | 3,274,395 | $— | $ | 11,253,204 | |||||||||
|
|
|
|
|
|
66 |
NOTES TO FINANCIAL STATEMENTS |
Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | |||||||||||||
International Opportunities Fund Assets: | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | — | $ | 2,930,488 | $— | $ | 2,930,488 | |||||||||
Belgium | — | 3,090,277 | — | 3,090,277 | ||||||||||||
Canada | 2,191,146 | — | — | 2,191,146 | ||||||||||||
China | 1,065,482 | — | — | 1,065,482 | ||||||||||||
Denmark | — | 1,168,508 | — | 1,168,508 | ||||||||||||
France | — | 2,299,195 | — | 2,299,195 | ||||||||||||
Germany | — | 4,155,971 | — | 4,155,971 | ||||||||||||
Hong Kong | — | 3,115,138 | — | 3,115,138 | ||||||||||||
India | 3,099,699 | — | — | 3,099,699 | ||||||||||||
Ireland | — | 2,786,609 | — | 2,786,609 | ||||||||||||
Japan | 10,757,707 | — | — | 10,757,707 | ||||||||||||
Korea | 660,041 | — | — | 660,041 | ||||||||||||
Netherlands | — | 2,417,528 | — | 2,417,528 | ||||||||||||
South Africa | — | 2,611,333 | — | 2,611,333 | ||||||||||||
Switzerland | — | 5,499,578 | — | 5,499,578 | ||||||||||||
Taiwan | 3,252,156 | — | — | 3,252,156 | ||||||||||||
Thailand | 1,403,390 | — | — | 1,403,390 | ||||||||||||
United Kingdom | — | 12,077,305 | — | 12,077,305 | ||||||||||||
Investment Company | 1,349,173 | — | — | 1,349,173 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total Assets | $ | 23,778,794 | $ | 42,151,930 | $— | $ | 65,930,724 | |||||||||
|
|
|
|
|
|
The Funds did not have any liabilities that were measured at fair value on a recurring basis at March 31, 2018.
During the period ended March 31, 2018, for Emerging Markets Small Cap Equity Fund, transfers to Level 2 from Level 1 in the amount of $69,739 were due to the absence of an active trading market for the securities on March 31, 2018; securities were transferred from Level 2 to Level 1 in the amount of $58,275,016, $1,885,062, $152,807 and $2,937,389 for the Emerging Markets Equity Fund, Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and International Opportunities Fund since the trading market became active for the securities. There were no transfers for the Emerging Markets Value Equity Fund. The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the period utilizing fair value at the beginning of the period.
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 Stocks– (Philippines) | ||||
Balance as of 3/31/17(value) | $116 | |||
Change in unrealized appreciation (depreciation)* | (5 | ) | ||
Balance as of 3/31/18(value) | $111 |
* | Net change in unrealized appreciation/(depreciation) in Level 3 securities still held at March 31, 2018 |
67 |
NOTES TO FINANCIAL STATEMENTS |
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.
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 by the dealers 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 market value of the repurchase agreement in the event of a default.
There were no repurchase agreements held during the year ended March 31, 2018.
Investment Transactions and Income:
Investment transactions are recorded on 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,
68 |
NOTES TO FINANCIAL STATEMENTS |
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, 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, 2018, reclassifications for permanent differences were as follows:
Increase/(Decrease) Paid in Capital | Increase/(Decrease) Undistributed Net Investment Income/(Loss) | Increase/(Decrease) Accumulated Realized Gain/(Loss) | ||||||||||
Emerging Markets Equity Fund | $(1,045,951) | $251,888 | $794,063 | |||||||||
Emerging Markets Small Cap Equity Fund | (294) | 122,160 | (121,866) | |||||||||
Emerging Markets Value Equity Fund | (10,695) | (5,491 | ) | 16,186 | ||||||||
Global Opportunities Fund | (76) | 2,446 | (2,370) | |||||||||
International Opportunities Fund | (108) | (45,811 | ) | 45,919 |
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 Funds’ 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 agreement, 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 Market Equity Fund | 0.95% | |||
Emerging Markets Small Cap Equity Fund | 1.25% | |||
Emerging Markets Value Equity Fund | 0.95% | |||
Global Opportunities Fund* | 0.76% | |||
International Opportunities Fund | 0.80% |
* Prior to October 2, 2017, the annual rate for Global Opportunities Fund for advisory fee was 0.85% 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* | 1.13% | 0.88% | 0.88% | |||||||||
Emerging Markets Small Cap Equity Fund** | 1.70% | 1.45% | N/A | |||||||||
Emerging Markets Value Equity Fund | N/A | 1.11% | 1.06% | |||||||||
Global Opportunities Fund*** | N/A | 0.86% | 0.81% | |||||||||
International Opportunities Fund**** | N/A | 0.89% | 0.84% |
* Prior to January 2, 2018, the annual rate for Emerging Markets Equity Fund under the expense limitation agreement was 0.975% for Class A, 0.725% for Class I and 0.725% for Class R6.
** Prior to October 2, 2017, the annual rate for Emerging Markets Small Cap Equity Fund under the expense limitation agreement was 1.85% for Class A, and 1.60% for Class I.
69 |
NOTES TO FINANCIAL STATEMENTS |
*** Prior to October 2, 2017, the annual rate for Global Opportunities Fund under the expense limitation agreement was 1.05% for Class I, and 1.00% for Class R6.
**** Prior to October 2, 2017, the annual rate for International Opportunities Fund under the expense limitation agreement was 1.00% for Class I, and 0.95% for Class R6.
This expense limitation agreement is in place until July 31, 2019 (September 30, 2018 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.
At March 31, 2018, the amounts subject to possible recoupment under the expense limitation agreement were:
FYE 3/31/16 | FYE 3/31/17 | FYE 3/31/18 | Total | |||||||||||||
Emerging Markets Equity Fund | $ | 338,439 | $ | 785,515 | $ | 2,019,686 | $ | 3,143,640 | ||||||||
Emerging Markets Small Cap Equity Fund | 171,048 | 159,332 | 176,300 | 506,680 | ||||||||||||
Emerging Markets Value Equity Fund | — | — | 57,844 | 57,844 | ||||||||||||
Global Opportunities Fund | 150,126 | 129,225 | 146,186 | 425,537 | ||||||||||||
International Opportunities Fund | 159,942 | 152,817 | 199,478 | 512,237 |
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, 2018.
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 in part 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 $54,000 ($49,000 prior to October 1, 2017). 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 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, 2018, 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.
70 |
NOTES TO FINANCIAL STATEMENTS |
Net Assets | Shares held by Advisor | % of Fund Net Assets | ||||||||||
Emerging Markets Small Cap Equity Fund | $ | 6,835,280 | 532,287 | 89.5 | % | |||||||
Emerging Markets Value Equity Fund | $ | 5,086,006 | 500,000 | 100.0 | % | |||||||
Global Opportunities Fund | $ | 11,249,725 | 530,737 | 64.6 | % | |||||||
International Opportunities Fund | $ | 65,384,527 | 968,915 | 16.9 | % |
On March 29, 2018, the Sub-Advisor agreed to make a capital contribution to Emerging Markets Equtiy Fund in the amount of $1,035,862 to reimburse the Fund for losses incurred resulting from a trade processing error. The payment was made on April 23, 2018.
4. Fund Distribution:
Each of the Funds that offers Class A shares 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 and Class R6. The following chart shows the current Plan fee rate for Class A.
Class A | ||
12b-1 Plan Fee | 0.25%* |
* Under the 12b-1 plan, the maximum fee rate for Class A shares is 0.50%. Currently the Board 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 the Plan fee voluntarily, in whole or in part. For the year ended March 31, 2018, there were no fees waived by the Distributor.
For the year ended March 31, 2018, the Distributor received commissions of $3,109 front-end sales charges of Class A shares, of the Funds, of which $677 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 or Class C shares of the Funds during the year ended March 31, 2018.
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, 2018 were as follows:
Purchases | Sales | |||||||
Emerging Markets Equity Fund | $ | 536,285,370 | $ | 204,892,073 | ||||
Emerging Markets Small Cap Equity Fund | 1,930,197 | 1,579,257 | ||||||
Emerging Markets Value Equity Fund | 5,912,537 | 932,892 | ||||||
Global Opportunities Fund | 5,042,102 | 2,690,906 | ||||||
International Opportunities Fund | 54,388,843 | 22,715,591 |
71 |
NOTES TO FINANCIAL STATEMENTS |
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 on the following pages:
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | |||||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||
Class A | ||||||||||||||||||||
Proceeds from shares issued | $ | 57,250,786 | $ | 5,165,315 | $ | 29,740 | $ | 5,000 | ||||||||||||
Distributions reinvested | 406,738 | 29,023 | 72,501 | 99,845 | ||||||||||||||||
Cost of shares redeemed | (19,744,150 | ) | (3,042,950 | ) | (9,734 | ) | (5,267 | ) | ||||||||||||
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Change in Class A | $ | 37,913,374 | $ | 2,151,388 | $ | 92,507 | $ | 99,578 | ||||||||||||
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Class I | ||||||||||||||||||||
Proceeds from shares issued | $ | 355,734,610 | $ | 142,074,792 | $ | 504,388 | $ | 312,698 | ||||||||||||
Distributions reinvested | 3,896,653 | 1,112,649 | 88,517 | 106,882 | ||||||||||||||||
Cost of shares redeemed | (89,008,238 | ) | (11,949,468 | ) | (131,045 | ) | (104,474 | ) | ||||||||||||
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Change in Class I | $ | 270,623,025 | $ | 131,237,973 | $ | 461,860 | $ | 315,106 | ||||||||||||
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Class R6 | ||||||||||||||||||||
Proceeds from shares issued | $ | 15,684,242 | $ | 21,110,000 | $ | — | $ | — | ||||||||||||
Distributions reinvested | 386,471 | 149,036 | — | — | ||||||||||||||||
Cost of shares redeemed | (128,888 | ) | (10,351 | ) | — | — | ||||||||||||||
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| |||||||||||||
Change in Class R6 | $ | 15,941,825 | $ | 21,248,685 | $ | — | $ | — | ||||||||||||
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| |||||||||||||
Change in net assets resulting from capital transactions | $ | 324,478,224 | $ | 154,638,046 | $ | 554,367 | $ | 414,684 | ||||||||||||
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72 |
NOTES TO FINANCIAL STATEMENTS |
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | |||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||
Class A | ||||||||||||||||
Issued | 4,714,431 | 490,807 | 2,717 | 546 | ||||||||||||
Reinvested | 32,102 | 2,910 | 6,738 | 10,724 | ||||||||||||
Redeemed | (1,519,205 | ) | (283,934 | ) | (860 | ) | (569 | ) | ||||||||
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| |||||||||
Change in Class A | 3,227,328 | 209,783 | 8,595 | 10,701 | ||||||||||||
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Class I | ||||||||||||||||
Issued | 28,127,728 | 13,701,422 | 45,085 | 34,249 | ||||||||||||
Reinvested | 303,006 | 110,055 | 8,227 | 11,493 | ||||||||||||
Redeemed | (6,647,984 | ) | (1,147,574 | ) | (11,925 | ) | (10,260 | ) | ||||||||
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Change in Class I | 21,782,750 | 12,663,903 | 41,387 | 35,482 | ||||||||||||
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Class R6 | ||||||||||||||||
Issued | 1,241,861 | 2,073,683 | — | — | ||||||||||||
Reinvested | 29,913 | 14,669 | — | — | ||||||||||||
Redeemed | (10,141 | ) | (999 | ) | — | — | ||||||||||
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Change in Class R6 | 1,261,633 | 2,087,353 | — | — | ||||||||||||
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Change in shares resulting from capital transactions | 26,271,711 | 14,961,039 | 49,982 | 46,183 | ||||||||||||
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Emerging Markets Value Equity Fund | Global Opportunities Fund | |||||||||||||
For the Period Ended March 31, 2018(a) | For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | ||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||
Class I | ||||||||||||||
Proceeds from shares issued | $ | 2,500,000 | $ | 2,299,847 | $ | 1,197,391 | ||||||||
Distributions reinvested | — | 366,557 | 42,516 | |||||||||||
Cost of shares redeemed | — | (85,339 | ) | (10,645 | ) | |||||||||
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Change in Class I | $ | 2,500,000 | $ | 2,581,065 | $ | 1,229,262 | ||||||||
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Class R6 | ||||||||||||||
Proceeds from shares issued | $ | 2,500,000 | $ | — | $ | 10,000 | ||||||||
Distributions reinvested | — | 521 | — | |||||||||||
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Change in Class R6 | $ | 2,500,000 | $ | 521 | $ | 10,000 | ||||||||
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Change in net assets resulting from capital transactions | $ | 5,000,000 | $ | 2,581,586 | $ | 1,239,262 | ||||||||
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73 |
NOTES TO FINANCIAL STATEMENTS |
Emerging Markets Value Equity Fund | Global Opportunities Fund | |||||||||||||||||||||||
For the Period Ended March 31, 2018(a) | For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | ||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||
Issued | 250,000 | 171,786 | 111,192 | |||||||||||||||||||||
Reinvested | — | 27,560 | 4,000 | |||||||||||||||||||||
Redeemed | — | (6,347 | ) | (1,007 | ) | |||||||||||||||||||
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Change in Class I | 250,000 | 192,999 | 114,185 | |||||||||||||||||||||
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Class R6 | ||||||||||||||||||||||||
Issued | 250,000 | — | 960 | |||||||||||||||||||||
Reinvested | — | 39 | — | |||||||||||||||||||||
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Change in Class R6 | 250,000 | 39 | 960 | |||||||||||||||||||||
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Change in shares resulting from capital transactions | 500,000 | 193,038 | 115,145 | |||||||||||||||||||||
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(a)For the period from February 9, 2018 (commencement of operations) to March 31, 2018.
International Opportunities Fund | ||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||
Class I | ||||||||||||
Proceeds from shares issued | $ | 39,160,594 | $ | 18,903,370 | ||||||||
Distributions reinvested | 1,367,498 | 110,935 | ||||||||||
Cost of shares redeemed | (7,448,076 | ) | (265,440 | ) | ||||||||
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Change in Class I | $ | 33,080,016 | $ | 18,748,865 | ||||||||
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Class R6 | ||||||||||||
Proceeds from shares issued | $ | — | $ | 10,000 | ||||||||
Distributions reinvested | 343 | 4 | ||||||||||
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Change in Class R6 | $ | 343 | $ | 10,004 | ||||||||
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Change in net assets resulting from capital transactions | $ | 33,080,359 | $ | 18,758,869 | ||||||||
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74 |
NOTES TO FINANCIAL STATEMENTS |
International Opportunities Fund | ||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||
SHARE TRANSACTIONS: | ||||||||||||
Class I | ||||||||||||
Issued | 3,708,633 | 2,031,630 | ||||||||||
Reinvested | 119,641 | 12,205 | ||||||||||
Redeemed | (683,755 | ) | (29,014 | ) | ||||||||
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Change in Class I | 3,144,519 | 2,014,821 | ||||||||||
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Class R6 | ||||||||||||
Issued | — | 1,098 | ||||||||||
Reinvested | 30 | — | ||||||||||
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Change in Class R6 | 30 | 1,098 | ||||||||||
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Change in shares resulting from capital transactions | 3,144,549 | 2,015,919 | ||||||||||
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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 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 2016 , 2017 and 2018 for Emerging Markets Equity Fund, Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and International Opportunities Fund and for the period ending March 31, 2018 for the Emerging Markets Value Equity 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 and during the year ended March 31, 2018, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended March 31, 2018, the Funds did not incur any interest or penalties.
As of March 31, 2018, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for each Fund was as follows:
Tax Cost Of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | |||||||||||||
Emerging Markets Equity Fund | $ | 615,991,963 | $ | 75,263,355 | $ | (22,967,524 | ) | $ | 52,295,831 | |||||||
Emerging Markets Small Cap Equity Fund | 5,846,181 | 1,573,966 | (614,161 | ) | 959,805 | |||||||||||
Emerging Markets Value Equity Fund | 5,002,028 | 220,162 | (152,322 | ) | 67,840 | |||||||||||
Global Opportunities Fund | 9,173,743 | 2,394,739 | (315,278 | ) | 2,079,461 | |||||||||||
International Opportunities Fund | 60,112,306 | 8,164,740 | (2,346,322 | ) | 5,818,418 |
75 |
NOTES TO FINANCIAL STATEMENTS |
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, 2018 were as follows:
Distributions Paid From | ||||||||||||||||
Ordinary Income | Net Long Term Capital Gains | Total Taxable Distributions | Total Distributions Paid | |||||||||||||
Emerging Markets Equity Fund | $ | 5,164,447 | $ | 171,910 | $ | 5,336,357 | $ | 5,336,357 | ||||||||
Emerging Markets Small Cap Equity Fund | 153,053 | 7,965 | 161,018 | 161,018 | ||||||||||||
Emerging Markets Value Equity Fund | — | — | — | — | ||||||||||||
Global Opportunities Fund | 245,284 | 122,738 | 368,022 | 368,022 | ||||||||||||
International Opportunities Fund | 784,018 | 597,241 | 1,381,259 | 1,381,259 |
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 Taxable Distributions | Total Distributions Paid | |||||||||||||
Emerging Markets Equity Fund | $1,369,659 | $241,505 | $1,611,164 | $1,611,164 | ||||||||||||
Emerging Markets Small Cap Equity Fund | 206,727 | — | 206,727 | 206,727 | ||||||||||||
Global Opportunities Fund | 42,516 | — | 42,516 | 42,516 | ||||||||||||
International Opportunities Fund | 110,940 | — | 110,940 | 110,940 |
As of March 31, 2018, the components of accumulated earnings/(losses) on a tax basis were as follows:
Emerging Markets Equity Fund | Emerging Markets Small Cap Equity Fund | Emerging Markets Value Equity Fund | Global Opportunities Fund | International Opportunities Fund | ||||||||||||||||
Undistributed ordinary income | $ | 5,911,520 | $ | 5,979 | $ | 28,575 | $ | 75,386 | $ | 656,569 | ||||||||||
Undistributed long term gain | 36,808,413 | — | — | 188,147 | 1,318,286 | |||||||||||||||
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| |||||||||||
Accumulated earnings | 42,719,933 | 5,979 | 28,575 | 263,533 | 1,974,855 | |||||||||||||||
Unrealized appreciation | 51,376,164 | 943,415 | 68,126 | 2,079,837 | 5,814,464 | |||||||||||||||
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| |||||||||||
Total Accumulated Earnings | $ | 94,096,097 | $ | 949,394 | $ | 96,701 | $ | 2,343,370 | $ | 7,789,319 | ||||||||||
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76 |
NOTES TO FINANCIAL STATEMENTS |
During the year ended March 31, 2018, the Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and the International Opportunities Fund utilized capital losses in the amount of $55,578, $41,327 and $381,286, respectively.
As of March 31, 2018, the Funds did not have any capital loss carryforwards for federal income tax purposes.
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 Small Cap Fund deferred long-term qualified late-year capital losses of $(4,893) and short-term qualified late-year capital losses of $18,804 which will be treated as arising on the first business day of the year ended March 31, 2019.
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 the shares redeemed or exchanged within 30 days of purchase, in addition to limiting 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 cases where, for example, 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, 2018, redemption fees were collected by the Emerging Markets Equity Fund, Emerging Markets Small Cap Equity Fund and Global Opportunities Fund in the amount of $7,967, $11 and $3, 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.
9. Significant Risks
Shareholder concentration risk:
As of March 31, 2018, the Funds had omnibus accounts which owned more than 10% of a Fund’s outstanding shares as shown below:
# of Non-Affiliated Omnibus Accounts | % of Fund | |||||||
Emerging Markets Equity Fund | 2 | 58.4% | ||||||
Global Opportunities Fund | 2 | 28.0% | ||||||
International Opportunities Fund | 1 | 79.4% |
Significant transactions by these shareholders may impact the Funds’ performance.
Industry and sector focus risk:
At times the Funds may increase the relative emphasis of its investments in a particular industry or sector. The prices of securities of issuers in a particular industry or sector may be more susceptible to fluctuations due to changes in economic or business conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry or sector more than securities of issuers in other industries and sectors. To the extent that the Fund increases the relative emphasis of its investments in a particular industry or sector, its shares’ values may fluctuate in response to events affecting that industry or sector.
10. 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.
77 |
|
To the Board of Trustees of RBC Funds Trust and Shareholders of RBC Emerging Markets Equity Fund, RBC Emerging Markets Small Cap Equity Fund, RBC Emerging Markets Value Equity Fund, RBC Global Opportunities Fund, and RBC International Opportunities Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of each of the funds listed in the table below (five of the funds constituting RBC Funds Trust, hereafter collectively referred to as the “Funds”) as of March 31, 2018, the related statements of operations for each of the periods indicated in the table below, the statements of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2018, the results of each of their operations for each of the periods indicated in the table below, the changes in each of their net assets for each of the periods indicated in the table below and each of the financial highlights for each of the periods indicated in the table below in conformity with accounting principles generally accepted in the United States of America.
RBC Emerging Markets Equity Fund (2) | RBC Global Opportunities Fund (3) | |
RBC Emerging Markets Small Cap Equity Fund (1) | RBC International Opportunities Fund (3) | |
RBC Emerging Markets Value Equity Fund (4) | ||
(1) Statement of operations for the year ended March 31, 2018, statement of changes in net assets for each of the two years in the period ended March 31, 2018 and financial highlights for each of the two years in the period ended March 31, 2018 | ||
(2) Statement of operations for the year ended March 31, 2018, statement of changes in net assets for each of the two years in the period ended March 31, 2018 and financial highlights for Class A and Class I for each of the two years in the period ended March 31, 2018 and for Class R6 for the year ended March 31, 2018 and for the period November 22, 2016 (commencement of operations) through March 31, 2017 | ||
(3) Statement of operations for the year ended March 31, 2018, statement of changes in net assets for each of the two years in the period ended March 31, 2018 and financial highlights for Class I for each of the two years in the period ended March 31, 2018 and for Class R6 for the year ended March 31, 2018 and for the period November 22, 2016 (commencement of operations) through March 31, 2017 | ||
(4) Statements of operations and changes in net assets and financial highlights for the period February 9, 2018 (commencement of operations) through March 31, 2018 |
The financial statements of RBC Emerging Markets Equity Fund, RBC Emerging Markets Small Cap Equity Fund, RBC Global Opportunities Fund, and RBC International Opportunities Fund as of and for the year ended March 31, 2016 and the financial highlights for each of the periods ended on or prior to March 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated May 24, 2016 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
78 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2018 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
May 25, 2018
We have served as the auditor of one or more investment companies in the RBC Funds since 2016.
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For the year ended March 31, 2018, 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 2018 Form 1099-DIV.
For the year ended March 31, 2018, the following Funds had a qualified dividend income percentage of:
Qualified | ||||
Dividend | ||||
Income | ||||
Emerging Markets Equity Fund | 60.66% | |||
Emerging Markets Small Cap Equity Fund | 53.56% | |||
Emerging Markets Value Equity Fund | 48.24% | |||
Global Opportunities Fund | 43.09% | |||
International Opportunities Fund | 70.90% |
For corporate shareholders, the following percentage of the total ordinary income distributions paid during the fiscal year ended March 31, 2018 qualify for the corporate dividends received deduction:
Dividends | ||||
Received | ||||
Deduction | ||||
Emerging Markets Equity Fund | 0.00% | |||
Emerging Markets Small Cap Equity Fund | 0.00% | |||
Emerging Markets Value Equity Fund | 0.00% | |||
Global Opportunities Fund | 16.55% | |||
International Opportunities Fund | 0.00% |
For the year ended March 31, 2018, the following Funds had a qualified interest income percentage of:
Qualified | ||||
Interest | ||||
Income | ||||
Emerging Markets Equity Fund | 1.62% | |||
Emerging Markets Small Cap Equity Fund | 0.51% | |||
Emerging Markets Value Equity Fund | 0.00% | |||
Global Opportunities Fund | 1.53% | |||
International Opportunities Fund | 0.92% |
For the year ended March 31, 2018, the following Funds had a qualified short term gains percentage of:
Qualified | ||||
Short-Term | ||||
Gains | ||||
Emerging Markets Equity Fund | 84.41% | |||
Emerging Markets Small Cap Equity Fund | 0.00% |
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OTHER FEDERAL INCOME TAX INFORMATION (UNAUDITED) |
Qualified | ||||
Short-Term | ||||
Gains | ||||
Emerging Markets Value Equity Fund | 100.00% | |||
Global Opportunities Fund | 97.78% | |||
International Opportunities Fund | 92.20% |
For the year ended March 31, 2018, 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 | 100.00% | |||
Emerging Markets Value Equity Fund | 100.00% | |||
Global Opportunities Fund | 0.00% | |||
International Opportunities Fund | 93.27% |
The Funds have elected to pass through to their shareholders the foreign taxes paid for the year ended March 31, 2018 as follows:
Foreign Taxes Paid | Foreign Source Income | |||||||
Emerging Markets Equity Fund | $857,291 | $10,796,964 | ||||||
Emerging Markets Small Cap Equity Fund | 8,573 | 155,893 | ||||||
Emerging Markets Value Equity Fund | 2,132 | 21,341 | ||||||
Global Opportunities Fund | 0 | 0 | ||||||
International Opportunities Fund | 81,668 | 1,119,482 |
Pursuant to Internal Revenue Code Section 852(b)(3), Emerging Markets Equity Fund, Emerging Markets Small Cap Equity Fund, Global Opportunities Fund and International Opportunities Fund reported $36,980,323, $7,965, $310,885 and $1,915,527 respectively as long-term capital gain distributions for the year ended March 31, 2018.
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 above, 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 (66)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Franklin Street Partners (2014 to present); BioSignia (2006 to 2010).
Leslie H. Garner Jr. (67)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Ronald James (67)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Bremer Financial Corporation (2004 to present); Best Buy Co. Inc. (2004 to 2013)
John A. MacDonald (69)
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: 18
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 (65)
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); Chartered Financial Analyst (1987 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Sooner Holdings (formerly Syntroleum Corporation) (1988 to 2015); Brookdale Senior Living Inc. (2008 to present)
William B. Taylor (72)
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: 18
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 2017); Balance Innovations LLC (2014 to present); Kansas City Symphony (1995 to present); Kansas University Endowment Association (2010 to present); Nelson Atkins Museum of Art (2017 to present); Breckenridge Music Festival (2017 to present)
Interested Trustees(1)(2)(3)
Kathleen A. Gorman (54)(5)
Position, Term of Office and Length of Time Served with the Trust: Trustee 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)
Number of Portfolios in Fund Complex Overseen by Trustee: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
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MANAGEMENT (UNAUDITED) |
Executive Officers(1)(3)(4)
Kathleen A. Gorman (54)
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 (51)
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)
Christina M. Weber (49)
Position, Term of Office and Length of Time Served with the Trust: Chief Compliance Officer since December 2012 and Secretary since September 2017
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)
(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 Fund’s 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 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 upfront 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.
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Shareholder Expense Examples
As a shareholder of the the RBC Funds, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management 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, 2017 through March 31, 2018, except for Emerging Markets Value Equity Fund, which is for the period of February 9, 2018 (commencement of operations) through March 31, 2018.
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 10/1/17 | Ending Account Value 3/31/18 | Expenses Paid During Period* 10/1/17–3/31/18 | Annualized Expense Ratio During Period 10/1/17–3/31/18 | |||||||||||||||||
Emerging Markets Equity Fund | ||||||||||||||||||||
Class A | $1,000.00 | $1,058.60 | $5.36 | 1.05% | ||||||||||||||||
Class I | 1,000.00 | 1,060.60 | 4.14 | 0.81% | ||||||||||||||||
Class R6 | 1,000.00 | 1,059.70 | 4.11 | 0.80% | ||||||||||||||||
Emerging Markets Small Cap Equity Fund | ||||||||||||||||||||
Class A | 1,000.00 | 1,100.30 | 8.85 | 1.70% | ||||||||||||||||
Class I | 1,000.00 | 1,102.60 | 7.56 | 1.45% | ||||||||||||||||
Emerging Markets Value Equity Fund** |
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Class I | 1,000.00 | 1,019.00 | 1.44 | 1.11% | ||||||||||||||||
Class R6 | 1,000.00 | 1,019.00 | 1.38 | 1.06% | ||||||||||||||||
Global Opportunities Fund | ||||||||||||||||||||
Class I | 1,000.00 | 1,087.00 | 4.45 | 0.86% | ||||||||||||||||
Class R6 | 1,000.00 | 1,087.20 | 4.19 | 0.81% | ||||||||||||||||
International Opportunities Fund | ||||||||||||||||||||
Class I | 1,000.00 | 1,051.00 | 4.53 | 0.89% | ||||||||||||||||
Class R6 | 1,000.00 | 1,050.10 | 4.27 | 0.84% |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 181/365 (to reflect one half-year period).
**Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 47/365 (to reflect February 9, 2018 (commencement of operations) through March 31, 2018).
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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 10/1/17 | Ending Account Value 3/31/18 | Expenses Paid During Period* 10/1/17-3/31/18 | Annualized Expense Ratio During Period 10/1/17-3/31/18 | ||||||||||||||||
Emerging Markets Equity Fund | ||||||||||||||||||||
Class A | $1,000.00 | $1,019.59 | $5.26 | 1.05% | ||||||||||||||||
Class I | 1,000.00 | 1,020.77 | 4.06 | 0.81% | ||||||||||||||||
Class R6 | 1,000.00 | 1,020.81 | 4.03 | 0.80% | ||||||||||||||||
Emerging Markets Small Cap Equity Fund | ||||||||||||||||||||
Class A | 1,000.00 | 1,016.36 | 8.50 | 1.70% | ||||||||||||||||
Class I | 1,000.00 | 1,017.60 | 7.25 | 1.45% | ||||||||||||||||
Emerging Markets Value Equity Fund** |
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Class I | 1,000.00 | 1,005.01 | 1.43 | 1.11% | ||||||||||||||||
Class R6 | 1,000.00 | 1,005.07 | 1.37 | 1.06% | ||||||||||||||||
Global Opportunities Fund | ||||||||||||||||||||
Class I | 1,000.00 | 1,020.53 | 4.31 | 0.86% | ||||||||||||||||
Class R6 | 1,000.00 | 1,020.78 | 4.06 | 0.81% | ||||||||||||||||
International Opportunities Fund | ||||||||||||||||||||
Class I | 1,000.00 | 1,020.38 | 4.46 | 0.89% | ||||||||||||||||
Class R6 | 1,000.00 | 1,020.63 | 4.21 | 0.84% |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 181/365 (to reflect one half-year period).
**Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 47/365 (to reflect February 9, 2018 (commencement of operations) through March 31, 2018).
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APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED) |
Information Regarding the Approval of Investment Advisory and Sub-Advisory Agreements
This section provides information regarding the approval of the investment advisory and sub advisory agreements for the RBC Emerging Markets Value Equity Fund (the “Fund”), which commenced operations on February 9, 2018. RBC Global Asset Management (U.S.) Inc. (the “Advisor”) serves as the Fund’s investment advisor and RBC Global Asset Management (UK) Limited (the “Sub-Advisor”) serves as the Fund’s sub-advisor.
The Board of Trustees of RBC Funds Trust (the “Trust”) created the Fund following a 2017 strategic review of the RBC Funds family in order to respond to market demand and provide investors with access to the Sub-Advisor’s emerging markets value equity investing capabilities. During meetings in August and September of 2017, the Board met with representatives from the Advisor’s senior management team and the Sub-Advisor’s investment team to discuss relevant information regarding the Fund and the proposed management of the Fund by the Advisor and Sub-Advisor. In addition to considering information specifically requested and presented in connection with the meetings regarding the capabilities of the Advisor and Sub-Advisor and their planned management of the Fund, the Trustees also considered information presented in connection with renewals of investment advisory and sub-advisory agreements with the Advisor and Sub-Advisor for other similar RBC Funds managed by the same investment team, as well as information provided at regular quarterly Board and Committee meetings throughout the year. In connection with their deliberations, the independent Trustees were advised by independent legal counsel with regard to the information and materials considered, the Trustees’ responsibilities with regard to the information and materials, and the Trustees’ responsibilities under relevant laws and regulations.
As part of their review of the advisory agreements, the independent Trustees requested and considered information regarding the advisory services to be performed for the Fund by the Advisor and Sub-Advisor, the staffing and qualifications of the personnel responsible for operating and managing the Fund, and the relevant experience of the Advisor and Sub-Advisor. The Trustees focused their consideration of the advisory agreements on reviewing the nature, quality, and extent of the services to be provided under the agreements and the performance of the Advisor and Sub-Advisor in managing products in a similar style to the Fund. In this regard, the Trustees considered the performance record of the Sub-Advisor in managing the RBC Emerging Markets Equity Fund and the RBC Emerging Markets Small Cap Equity Fund, as well as the historical performance of a composite of accounts managed by the Sub-Advisor in a style similar to that of the Fund. The Trustees expressed confidence in the Advisor’s management team and the Sub-Advisor’s investment team, recognizing the strong research and fundamental analysis capabilities and significant portfolio management experience of the Sub-Advisor.
The Trustees also reviewed information regarding the anticipated expense structure of the Fund, along with comparative information on the services to be rendered to, and fees to be paid by, the Fund. Although the Advisor indicated that it was premature to impose contractual advisory fee breakpoints, the Trustees noted that the Board and Advisor would evaluate fee and expense levels and breakpoints going forward as profitability and economy of scale information for the Fund is developed over time. The Trustees viewed favorably the Advisor’s agreement to contractually limit the annual expenses of the Fund through at least July 31, 2019. The Trustees concluded that the Fund’s advisory fee was fair and reasonable in light of the level and quality of the services to be provided under all of the circumstances and was within the range of what might have been negotiated at arms’ length.
Based upon their review, the Trustees determined that they were satisfied with the nature, extent, and quality of the services expected to be provided by the Advisor and Sub-Advisor and it was in the interest of the Fund and its shareholders for the Trustees to approve the advisory and sub- advisory agreements. In arriving at their collective decision to approve the agreements, the Trustees did not assign relative weights to the factors discussed above or deem any one or group of them to be controlling in and of itself.
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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, 2018.
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.
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 03-18
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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 is 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 is 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 Chief Investment Officer | 1 | ||||||||||
Portfolio Managers | 3 | |||||||||||
Performance Summary (Unaudited) | 4 | |||||||||||
Management Discussion and Analysis (Unaudited) | ||||||||||||
- RBC Short Duration Fixed Income Fund | 6 | |||||||||||
- RBC Ultra-Short Fixed Income Fund | 8 | |||||||||||
Schedule of Portfolio Investments | 10 | |||||||||||
Financial Statements | ||||||||||||
- Statements of Assets and Liabilities | 24 | |||||||||||
- Statements of Operations | 26 | |||||||||||
- Statements of Changes in Net Assets | 27 | |||||||||||
Financial Highlights | 29 | |||||||||||
Notes to Financial Statements | 33 | |||||||||||
Report of Independent Registered Public Accounting Firm | 45 | |||||||||||
Other Federal Income Tax Information (Unaudited) | 46 | |||||||||||
Management (Unaudited) | 47 | |||||||||||
Share Class Information (Unaudited) | 50 | |||||||||||
Supplemental Information (Unaudited)
| 51 |
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Dear Shareholder:
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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 have three-year track records of delivering what we believe are high quality, diversified fixed income vehicles to clients seeking shorter duration investment solutions.
For the 12-month period ended March 31, 2018, the Funds outperformed their benchmarks. The RBC Short Duration Fixed Income Fund had a net total return of 0.78% (Class I shares) compared to a return of 0.27% for the ICE BofAML 1-3 Year US Corporate & Government Index. The RBC Ultra-Short Fixed Income Fund had a net total return of 1.42% (Class I shares) compared to a return of 0.78% for the ICE BofAML US 1-Year Treasury Bill Index.
During the last year, U.S. Treasury rates increased across the yield curve, with short-term interest rates rising the most. This caused a flattening in the yield curve, as long-term interest rates remained somewhat anchored. The increase in interest rates was largely due to improved U.S. economic performance, growing inflation expectations, and a less accommodative Federal Reserve (the Fed). Over the course of the year (from March 2017 to March 2018), the Fed increased its target federal funds rate four times and also began reducing its balance sheet assets. Going forward, we expect the Fed to continue tightening at a slow and measured pace and will look for possibly two more rates hikes in 2018.
In the corporate sector, option adjusted spreads, a measure of a security’s risk, continued their tightening and strong spread performance for most of 2017. This trend, however, reversed during the first quarter of 2018 as volatility entered back into the market and supply demand dynamics turned unfavorable, causing credit spreads to widen. The Funds were able to take advantage of the positive environment for tightening credit spreads during 2017 as allocations to both financials and industrials helped drive the Funds’ performance over the last year.
Looking forward, we will continue to seek opportunities to positively impact performance by focusing on well researched security selection opportunities and maintaining a diversified portfolio of higher quality bonds. Thank you for your confidence and trust in the RBC Funds.
Michael Lee, CFA CEO, President and Chief Investment Officer RBC Global Asset Management (U.S.) Inc.
Past performance does not guarantee 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 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 Funds invest 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, |
1 |
LETTER FROM THE CHIEF INVESTMENT OFFICER | ||||||||
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 Funds 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 ICE BofAML 1-3 Year US Corporate & Government 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 ICE BofAML US 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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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 Managing Director, 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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3 |
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1 Year | 3 Year | Since Inception(a) | Net Expense Ratio(b)(c) | Gross Expense Ratio(b)(c) | ||||||||||||||||||||
Average Annual Total Returns as of March 31, 2018 (Unaudited) | ||||||||||||||||||||||||
RBC Short Duration Fixed Income Fund | ||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||
- At Net Asset Value | 0.78% | 1.40% | 1.45% | 0.45% | 1.71% | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
- At Net Asset Value | 0.78% | 1.46% | 1.52% | 0.35% | 0.99% | |||||||||||||||||||
ICE BofAML 1-3 | 0.27% | 0.67% | 0.80% | |||||||||||||||||||||
RBC Ultra-Short Fixed Income Fund | ||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||
- At Net Asset Value | 1.21% | 1.40% | 1.19% | 0.39% | 1.54% | |||||||||||||||||||
Class I | ||||||||||||||||||||||||
- At Net Asset Value | 1.42% | 1.47% | 1.26% | 0.29% | 1.08% | |||||||||||||||||||
ICE BofAML U.S. | 0.78% | 0.64% | 0.52% | |||||||||||||||||||||
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.For performance data current to the most recent month-end go to www.rbcgam.us. Please see footnotes below.
(a) The inception date (commencement date) is March 3, 2014 for Class A shares and December 30, 2013 for Class I shares. The performance in the table for the Class A shares prior to March 3, 2014 reflects the performance of the Class I shares since the Fund’s inception.
(b) 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 for Short Duration Fixed Income Fund and until July 31, 2019, for Ultra-Short Fixed Income Fund. For Ultra-Short Fixed Income Fund, effective October 2, 2017, the annual rate under the expense limitation agreement is 0.38% for Class A and 0.28% for Class I. The ratio of net expenses to average net assets represents a blended percentage for the year ended March 31, 2018.
(c) The Fund’s expenses reflect the most recent year end (March 31, 2018).
(d) 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 ICE BofAML 1-3 Year U.S. Corporate/Government Bond Index is an unmanaged index that tracks the performance of U.S. dollar denominated investment grade debt publicly issued in the U.S. domestic market with a remaining term to final maturity less than 3 years, including U.S. Treasury, U.S. agency, foreign government, supranational and corporate securities.
The ICE BofAML 1-Year U.S. Treasury Bill Index is an unmanaged index tracking U.S. government securities with 1 year remaining to maturity.
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5 |
6 |
MANAGEMENT DISCUSSION AND ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||
RBC Short Duration Fixed Income Fund
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Current income consistent with preservation of capital.
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Investment
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ICE BofAML 1-3 Year US Corporate & Government Index |
Benchmark
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Asset Allocation as of 3/31/18 (% of Fund’s investments) | ||||||||||||||||||||||||||||||
JPMorgan Chase & Co., MTN, 2.30%, 8/15/21 |
|
1.50 |
% |
CarMax Auto Owner Trust, Series 2015-4, Class D, 3.00%, 5/16/22 |
|
1.15 |
% | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||||||
Verizon Communications, Inc., 3.00%, 11/1/21 | 1.34 | % | Bank of America Corp., (LIBOR USD 3-Month + 0.630%), MTN, 2.33%, 10/1/21 | 1.13 | % | |||||||||||||||||||||||||||
World Omni Auto Receivables Trust, Series 2016-B, Class B, 1.73%, 7/15/23 | 1.31 | % | Drive Auto Receivables Trust, Series 2017-BA, Class D, 3.72%, 10/17/22 | 1.10 | % | |||||||||||||||||||||||||||
AT&T, Inc., 5.20%, 3/15/20 | 1.22 | % | Ford Credit Auto Owner Trust, Series 2014-1, Class B, 2.41%, 11/15/25 | 1.09 | % | |||||||||||||||||||||||||||
American Tower Corp., REIT, 3.30%, 2/15/21 | 1.15 | % | ||||||||||||||||||||||||||||||
Cooperatieve Rabobank UA, (LIBOR USD 3-Month + 0.480%), 2.19%, 1/10/23 | 1.15 | % | ||||||||||||||||||||||||||||||
*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, 2018 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
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Current income consistent with preservation of capital. |
Investment
| |||||||||||||||||||||||||||
ICE BofAML US 1-Year Treasury Bill Index |
| Benchmark | ||||||||||||||||||||||||||
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Asset Allocation as of 3/31/18 (% of Fund’s investments) | ||||||||||||||||||||||||||
Santander Drive Auto Receivables Trust, Series 2017-1, Class B, 2.10%, 6/15/21 |
|
1.47 |
% |
National Australia Bank Ltd., (LIBOR USD 3-Month + 0.890%), 2.60%, 1/10/22 |
|
1.08 |
% | Top Ten Holdings (excluding investment companies) (as of 3/31/18) (% of Fund’s net assets) | ||||||||||||||||||||
AmeriCredit Automobile Receivables Trust, Series 2015-3, Class C, 2.73%, 3/8/21 | 1.30 | % | Santander Drive Auto Receivables Trust, Series 2015-5, Class D, 3.65%, 12/15/21 | 1.07 | % | |||||||||||||||||||||||
Ford Motor Credit Co. LLC, 2.34%, 11/2/20 | 1.24 | % | Westpac Banking Corp., (LIBOR USD 3-Month + 0.710%), 3.00%, 6/28/22 | 1.07 | % | |||||||||||||||||||||||
AT&T, Inc., (LIBOR USD 3-Month + 0.890%), 2.72%, 2/14/23 | 1.18 | % | Australia & New Zealand Banking Group Ltd., (LIBOR USD 3-Month + 0.710%), 2.59%, 5/19/22 | 1.07 | % | |||||||||||||||||||||||
Williams Partners LP, 5.25%, 3/15/20 | 1.10 | % | ||||||||||||||||||||||||||
Freddie Mac, Series 2011-K10, Class B, 4.62%, 11/1/49 | 1.09 | % | ||||||||||||||||||||||||||
*A listing of all portfolio holdings can be found beginning on page 17 |
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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, 2018 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, 2018
Principal Amount | Value | |||||
| ||||||
Corporate Bonds — 68.60% | ||||||
Basic Materials — 1.15% | ||||||
$100,000 | LyondellBasell Industries NV, 5.00%, 4/15/19 | $ | 101,515 | |||
200,000 | Sherwin-Williams Co. (The), 2.25%, 5/15/20 | 196,680 | ||||
|
| |||||
298,195 | ||||||
|
| |||||
Communications — 4.16% | ||||||
175,000 | AT&T, Inc., (LIBOR USD 3-Month + 0.890%), 2.72%, 2/14/23(a) | 177,429 | ||||
305,000 | AT&T, Inc., 5.20%, 3/15/20 | 316,889 | ||||
250,000 | Discovery Communications LLC, 2.95%, 3/20/23 | 240,908 | ||||
350,000 | Verizon Communications, Inc., 3.00%, 11/1/21 | 347,288 | ||||
|
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1,082,514 | ||||||
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Consumer, Cyclical — 9.96% | ||||||
250,000 | CVS Health Corp., 2.13%, 6/1/21 | 241,526 | ||||
225,000 | Delta Air Lines, Inc., 2.88%, 3/13/20 | 223,534 | ||||
200,000 | Ford Motor Credit Co. LLC, 2.02%, 5/3/19 | 197,863 | ||||
250,000 | Ford Motor Credit Co. LLC, 3.20%, 1/15/21 | 247,941 | ||||
200,000 | Ford Motor Credit Co. LLC, 5.75%, 2/1/21 | 211,579 | ||||
100,000 | �� | General Motors Financial Co., Inc., 3.10%, 1/15/19 | 100,107 | |||
200,000 | General Motors Financial Co., Inc., 3.20%, 7/6/21 | 198,269 | ||||
100,000 | General Motors Financial Co., Inc., 3.45%, 1/14/22 | 99,645 | ||||
250,000 | Hyundai Capital America, MTN, 2.50%, 3/18/19(b) | 248,468 | ||||
250,000 | Newell Brands, Inc., 3.15%, 4/1/21 | 247,393 | ||||
250,000 | Nissan Motor Acceptance Corp., (LIBOR USD 3-Month + 0.690%), MTN, 2.98%, 9/28/22(a),(b) | 250,253 | ||||
75,000 | Royal Caribbean Cruises Ltd., 2.65%, 11/28/20 | 73,879 | ||||
250,000 | Walgreens Boots Alliance, Inc., 3.30%, 11/18/21 | 248,904 | ||||
|
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2,589,361 | ||||||
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Consumer, Non-cyclical — 12.59% | ||||||
100,000 | Allergan Funding SCS, 3.00%, 3/12/20 | 99,484 | ||||
100,000 | Allergan Funding SCS, 3.45%, 3/15/22 | 99,145 | ||||
200,000 | Amgen, Inc., 2.65%, 5/11/22 | 195,144 | ||||
250,000 | Baxalta, Inc., 2.88%, 6/23/20 | 248,242 | ||||
250,000 | Becton Dickinson and Co., 2.89%, 6/6/22 | 242,565 | ||||
125,000 | Becton Dickinson and Co., (LIBOR USD 3-Month + 1.030%), 3.06%, 6/6/22(a) | 125,386 | ||||
150,000 | Cardinal Health, Inc., 2.62%, 6/15/22 | 145,005 | ||||
200,000 | Celgene Corp., 2.88%, 2/19/21 | 198,583 | ||||
250,000 | CVS Health Corp., 3.35%, 3/9/21 | 251,361 | ||||
100,000 | Kraft Heinz Foods Co., 2.80%, 7/2/20 | 99,308 | ||||
150,000 | Kraft Heinz Foods Co., 5.38%, 2/10/20 | 156,139 | ||||
250,000 | Molson Coors Brewing Co., 2.10%, 7/15/21 | 239,885 | ||||
250,000 | Mylan NV, 3.00%, 12/15/18 | 249,996 | ||||
100,000 | Mylan NV, 3.15%, 6/15/21 | 98,605 | ||||
250,000 | Shire Acquisitions Investments Ireland DAC, 2.40%, 9/23/21 | 241,381 | ||||
250,000 | Thermo Fisher Scientific, Inc., 3.30%, 2/15/22 | 249,497 |
10 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$135,000 | Tyson Foods, Inc., (LIBOR USD 3-Month + 0.550%), 2.57%, 6/2/20(a) | $ | 135,294 | |||
200,000 | Tyson Foods, Inc., 2.65%, 8/15/19 | 198,868 | ||||
|
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3,273,888 | ||||||
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Energy — 7.15% | ||||||
200,000 | Anadarko Petroleum Corp., 8.70%, 3/15/19 | 210,426 | ||||
200,000 | Enbridge Energy Partners LP, 4.20%, 9/15/21 | 203,454 | ||||
200,000 | Enterprise Products Operating LLC, 2.80%, 2/15/21 | 197,819 | ||||
100,000 | Enterprise Products Operating LLC, 2.85%, 4/15/21 | 98,836 | ||||
200,000 | EOG Resources, Inc., 4.40%, 6/1/20 | 205,494 | ||||
200,000 | Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 | 212,465 | ||||
110,000 | Magellan Midstream Partners LP, 4.25%, 2/1/21 | 112,407 | ||||
200,000 | ONEOK, Inc., 4.25%, 2/1/22 | 204,440 | ||||
200,000 | Spectra Energy Partners LP, 4.60%, 6/15/21 | 206,352 | ||||
200,000 | Williams Partners LP, 5.25%, 3/15/20 | 207,241 | ||||
|
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1,858,934 | ||||||
|
| |||||
Financial — 24.06% | ||||||
275,000 | Ally Financial, Inc., 3.50%, 1/27/19 | 275,344 | ||||
300,000 | American Tower Corp., REIT, 3.30%, 2/15/21 | 299,930 | ||||
250,000 | Australia & New Zealand Banking Group Ltd., (LIBOR USD 3-Month + 0.710%), 2.59%, 5/19/22(a),(b) | 251,834 | ||||
150,000 | Bank of America Corp., MTN, 2.15%, 11/9/20 | 147,042 | ||||
300,000 | Bank of America Corp., (LIBOR USD 3-Month + 0.630%), MTN, 2.33%, 10/1/21(a) | 293,365 | ||||
250,000 | Bank of Nova Scotia (The), (LIBOR USD 3-Month + 0.620%), 2.80%, 9/19/22(a) | 250,450 | ||||
250,000 | Barclays Plc, 2.75%, 11/8/19 | 247,985 | ||||
200,000 | BNP Paribas SA, MTN, 2.95%, 5/23/22(b) | 196,036 | ||||
150,000 | Citigroup, Inc., 2.65%, 10/26/20 | 148,208 | ||||
200,000 | Citigroup, Inc., 2.70%, 3/30/21 | 197,147 | ||||
150,000 | Citigroup, Inc., (LIBOR USD 3-Month + 1.190%), 2.97%, 8/2/21(a) | 152,677 | ||||
300,000 | Cooperatieve Rabobank UA, (LIBOR USD 3-Month + 0.480%), 2.19%, 1/10/23(a) | 299,448 | ||||
250,000 | Cooperatieve Rabobank UA, 3.95%, 11/9/22 | 252,625 | ||||
200,000 | Credit Suisse Group Funding Guernsey Ltd., 3.13%, 12/10/20 | 198,887 | ||||
250,000 | Goldman Sachs Group, Inc. (The), 2.88%, 2/25/21 | 247,443 | ||||
150,000 | Goldman Sachs Group, Inc. (The), GMTN, 5.38%, 3/15/20 | 156,405 | ||||
250,000 | HSBC Holdings Plc, (LIBOR USD 3-Month + 1.660%), 3.60%, 5/25/21(a) | 258,493 | ||||
200,000 | ING Groep NV, 3.15%, 3/29/22 | 197,292 | ||||
400,000 | JPMorgan Chase & Co., MTN, 2.30%, 8/15/21 | 388,915 | ||||
200,000 | Morgan Stanley, (LIBOR USD 3-Month + 0.930%), MTN, 2.67%, 7/22/22(a) | 200,758 | ||||
250,000 | Morgan Stanley, MTN, 2.75%, 5/19/22 | 243,805 | ||||
250,000 | National Australia Bank Ltd., (LIBOR USD 3-Month + 0.890%), 2.60%, 1/10/22(a),(b) | 253,472 |
11 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$100,000 | Regions Financial Corp., 2.75%, 8/14/22 | $ | 97,166 | |||
250,000 | Santander UK Group Holdings Plc, 2.88%, 10/16/20 | 247,644 | ||||
250,000 | Svenska Handelsbanken AB, (LIBOR USD 3-Month + 1.150%), MTN, 3.46%, 3/30/21(a) | 255,966 | ||||
250,000 | Westpac Banking Corp., 2.65%, 1/25/21 | 247,177 | ||||
250,000 | Westpac Banking Corp., (LIBOR USD 3-Month + 0.710%), 3.00%, 6/28/22(a) | 251,921 | ||||
|
| |||||
6,257,435 | ||||||
|
| |||||
Industrial — 1.91% | ||||||
100,000 | Caterpillar Financial Services Corp., (LIBOR USD 3-Month + 0.590%), MTN, 2.62%, 6/6/22(a) | 100,705 | ||||
200,000 | General Electric Co., (LIBOR USD 3-Month + 1.000%), 3.12%, 3/15/23(a) | 199,611 | ||||
100,000 | Rockwell Collins, Inc., 2.80%, 3/15/22 | 97,485 | ||||
100,000 | Roper Technologies, Inc., 2.80%, 12/15/21 | 98,370 | ||||
|
| |||||
496,171 | ||||||
|
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Technology — 3.18% | ||||||
225,000 | Dell International LLC / EMC Corp., 3.48%, 6/1/19(b) | 226,018 | ||||
100,000 | Dell International LLC / EMC Corp., 4.42%, 6/15/21(b) | 102,577 | ||||
200,000 | DXC Technology Co., 2.88%, 3/27/20 | 198,886 | ||||
200,000 | Hewlett Packard Enterprise Co., 3.60%, 10/15/20 | 201,850 | ||||
100,000 | LAM Research Corp., 2.80%, 6/15/21 | 98,681 | ||||
|
| |||||
828,012 | ||||||
|
| |||||
Utilities — 4.44% | ||||||
250,000 | Exelon Corp., 2.45%, 4/15/21 | 244,337 | ||||
150,000 | Mississippi Power Co., (LIBOR USD 3-Month + 0.650%), 2.94%, 3/27/20(a) | 150,052 | ||||
255,000 | Puget Energy, Inc., 6.50%, 12/15/20 | 275,058 | ||||
250,000 | Sempra Energy, 2.90%, 2/1/23 | 244,559 | ||||
250,000 | Southern Co. (The), 2.35%, 7/1/21 | 242,261 | ||||
|
| |||||
1,156,267 | ||||||
|
| |||||
Total Corporate Bonds | 17,840,777 | |||||
|
| |||||
(Cost $18,081,669) | ||||||
Asset Backed Securities — 25.96% | ||||||
205,000 | Ally Auto Receivables Trust, Series 2016-3, Class C, 2.32%, 10/15/21 | 203,294 | ||||
117,828 | AmeriCredit Automobile Receivables Trust, Series 2014-2, Class C, 2.18%, 6/8/20 | 117,661 | ||||
250,000 | AmeriCredit Automobile Receivables Trust, Series 2014-3, Class C, 2.58%, 9/8/20 | 249,956 | ||||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-4, Class C, 2.47%, 11/9/20 | 149,964 | ||||
175,000 | AmeriCredit Automobile Receivables Trust, Series 2015-2, Class C, 2.40%, 1/8/21 | 174,377 |
12 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$150,000 | AmeriCredit Automobile Receivables Trust, Series 2016-1, Class D, 3.59%, 2/8/22 | $ | 151,375 | |||
275,000 | AmeriCredit Automobile Receivables Trust, Series 2016-2, Class B, 2.21%, 5/10/21 | 273,461 | ||||
225,000 | AmeriCredit Automobile Receivables Trust, Series 2017-1, Class B, 2.30%, 2/18/22 | 221,824 | ||||
75,000 | CarMax Auto Owner Trust, Series 2014-2, Class D, 2.58%, 11/16/20 | 74,992 | ||||
170,000 | CarMax Auto Owner Trust, Series 2014-4, Class B, 2.20%, 9/15/20 | 169,458 | ||||
250,000 | CarMax Auto Owner Trust, Series 2015-4, Class B, 2.16%, 8/16/21 | 247,356 | ||||
300,000 | CarMax Auto Owner Trust, Series 2015-4, Class D, 3.00%, 5/16/22 | 298,952 | ||||
250,000 | CarMax Auto Owner Trust, Series 2016-2, Class C, 2.56%, 2/15/22 | 248,032 | ||||
190,000 | CNH Equipment Trust, Series 2015-C, Class B, 2.40%, 2/15/23 | 188,691 | ||||
165,000 | CNH Equipment Trust, Series 2016-B, Class B, 2.20%, 10/15/23 | 162,649 | ||||
8,352 | Credit-Based Asset Servicing & Securitization LLC, Series 2005-CB2, Class M1, (LIBOR USD 1-Month + 0.660%), 2.53%, 4/25/36(a) | 8,364 | ||||
250,000 | Drive Auto Receivables Trust, Series 2016-CA, Class D, 4.18%, 3/15/24(b) | 254,096 | ||||
225,000 | Drive Auto Receivables Trust, Series 2017-3, Class B, 2.30%, 5/17/21 | 224,000 | ||||
250,000 | Drive Auto Receivables Trust, Series 2017-AA, Class C, 2.98%, 1/18/22(b) | 250,081 | ||||
250,000 | Drive Auto Receivables Trust, Series 2017-AA, Class D, 4.16%, 5/15/24(b) | 254,091 | ||||
285,000 | Drive Auto Receivables Trust, Series 2017-BA, Class D, 3.72%, 10/17/22(b) | 287,226 | ||||
285,000 | Ford Credit Auto Owner Trust, Series 2014-1, Class B, 2.41%, 11/15/25(b) | 283,573 | ||||
90,000 | Ford Credit Auto Owner Trust, Series 2016-A, Class B, 1.94%, 7/15/21 | 89,003 | ||||
170,000 | GM Financial Automobile Leasing Trust, Series 2015-3, Class C, 2.98%, 11/20/19 | 170,225 | ||||
125,000 | GM Financial Automobile Leasing Trust, Series 2016-3, Class B, 1.97%, 5/20/20 | 123,832 | ||||
31,604 | RASC Series Trust, Series 2005-KS9, Class M2, (LIBOR USD 1-Month + 0.430%), 2.30%, 10/25/35(a) | 31,618 | ||||
22,198 | Santander Drive Auto Receivables Trust, Series 2014-2, Class C, 2.33%, 11/15/19 | 22,196 | ||||
10,735 | Santander Drive Auto Receivables Trust, Series 2014-3, Class C, 2.13%, 8/17/20 | 10,734 | ||||
200,000 | Santander Drive Auto Receivables Trust, Series 2015-1, Class D, 3.24%, 4/15/21 | 200,953 | ||||
250,000 | Santander Drive Auto Receivables Trust, Series 2015-4, Class C, 2.97%, 3/15/21 | 250,436 | ||||
100,000 | Santander Drive Auto Receivables Trust, Series 2015-5, Class C, 2.74%, 12/15/21 | 100,092 |
13 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$250,000 | Santander Drive Auto Receivables Trust, Series 2015-5, Class D, 3.65%, 12/15/21 | $ | 252,351 | |||
81,784 | Santander Drive Auto Receivables Trust, Series 2016-1, Class B, 2.47%, 12/15/20 | 81,755 | ||||
235,000 | Santander Drive Auto Receivables Trust, Series 2016-2, Class D, 3.39%, 4/15/22 | 236,462 | ||||
150,000 | Santander Drive Auto Receivables Trust, Series 2016-3, Class B, 1.89%, 6/15/21 | 149,257 | ||||
200,000 | Tesla Auto Lease Trust, Series 2018-A, Class C, 2.97%, 4/20/20(b) | 199,462 | ||||
350,000 | World Omni Auto Receivables Trust, Series 2016-B, Class B, 1.73%, 7/15/23 | 340,599 | ||||
|
| |||||
Total Asset Backed Securities | 6,752,448 | |||||
|
| |||||
(Cost $6,799,635) | ||||||
U.S. Government Agency Backed Mortgages — 3.22% | ||||||
Fannie Mae — 0.12% | ||||||
5,230 | Series 2001-70, Class OF, (LIBOR USD 1-Month + 0.950%), 2.82%, 10/25/31(a) | 5,339 | ||||
6,133 | Series 2005-68, Class BC, 5.25%, 6/1/35 | 6,252 | ||||
3,813 | Series 2009-87, Class FX, (LIBOR USD 1-Month + 0.750%), 2.62%, 11/25/39(a) | 3,865 | ||||
17,137 | Series 2012-3, Class EA, 3.50%, 10/1/29 | 17,265 | ||||
|
| |||||
32,721 | ||||||
|
| |||||
Freddie Mac — 3.10% | ||||||
200,000 | Series 2010-K7, Class B, 5.50%, 4/1/20(b),(c) | 208,483 | ||||
255,000 | Series 2011-K13, Class B, 4.61%, 1/1/48(b),(c) | 263,225 | ||||
280,000 | Series 2012-K709, Class B, 3.74%, 4/1/45(b),(c) | 281,761 | ||||
3,821 | Series 2448, Class FT, (LIBOR USD 1-Month + 1.000%), 2.78%, 3/15/32(a) | 3,907 | ||||
3,917 | Series 2488, Class FQ, (LIBOR USD 1-Month + 1.000%), 2.78%, 3/15/32(a) | 3,994 | ||||
24,137 | Series 2627, Class MW, 5.00%, 6/1/23 | 25,111 | ||||
292 | Series 3725, Class A, 3.50%, 9/1/24 | 292 | ||||
2,906 | Series 3770, Class FP, (LIBOR USD 1-Month + 0.500%), 2.28%, 11/15/40(a) | 2,919 | ||||
16,503 | Series 4027, Class GD, 2.00%, 10/1/25 | 16,362 | ||||
|
| |||||
806,054 | ||||||
|
| |||||
Total U.S. Government Agency Backed Mortgages | 838,775 | |||||
|
| |||||
(Cost $852,189) | ||||||
Municipal Bonds — 0.98% | ||||||
Connecticut — 0.52% | ||||||
135,000 | City of Bridgeport CT GO, Series D, 2.84%, 7/1/19 | 134,752 | ||||
|
|
14 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
Minnesota — 0.46% | ||||||
$120,000 | Duluth Independent School District No 709 GO, Series A, 3.00%, 2/1/20 | $119,654 | ||||
|
| |||||
Total Municipal Bonds | 254,406 | |||||
|
| |||||
(Cost $256,066) | ||||||
Collateralized Mortgage Obligations — 0.17% | ||||||
44,345 | JP Morgan Resecuritization Trust Series, Series 2014-1, Class 9A3, (LIBOR USD 1-Month + 0.290%), 1.91%, 12/26/35(a),(b) | 43,716 | ||||
|
| |||||
Total Collateralized Mortgage Obligations | 43,716 | |||||
|
| |||||
(Cost $43,535) |
Shares | ||||||
Investment Company — 0.52% | ||||||
134,403 | U.S. Government Money Market Fund, RBC Institutional Class 1(d) | 134,403 | ||||
|
| |||||
Total Investment Company | 134,403 | |||||
|
| |||||
(Cost $134,403) | ||||||
Total Investments | $ | 25,864,525 | ||||
(Cost $26,167,497)(e) — 99.45% | ||||||
Other assets in excess of liabilities — 0.55% | 143,531 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 26,008,056 | ||||
|
|
(a) | Variable rate security. The rate reflected in the Schedule of Portfolio Investments is the rate in effect on March 31, 2018. |
(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) | Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(d) | Affiliated investment. |
(e) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
15 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Short Duration Fixed Income Fund (cont.)
March 31, 2018
Financial futures contracts as of March 31, 2018:
Long Position | Number of Contracts | Expiration Date | Value/Unrealized Appreciation | Notional Value | Clearinghouse | |||||||||||||||||
Two Year U.S. Treasury Note | 14 | June 2018 | $1,710 | USD | $2,974,821 | Barclays Plc | ||||||||||||||||
Total | $1,710 | |||||||||||||||||||||
Short Position | Number of Contracts | Expiration Date | Value/Unrealized Depreciation | Notional Value | Clearinghouse | |||||||||||||||||
Five Year U.S. Treasury Note | 13 | June 2018 | $(7,171) | USD | $1,480,743 | Barclays Plc | ||||||||||||||||
Total | $(7,171) |
Abbreviations used are defined below:
GMTN - Global Medium Term Note
GO - General Obligations
LIBOR - London Interbank Offered Rate
MTN - Medium Term Note
REIT - Real Estate Investment Trust
USD - United States Dollar
See Notes to the Financial Statements.
16 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund
March 31, 2018
Principal Amount | Value | |||||
| ||||||
Corporate Bonds — 66.41% | ||||||
Basic Materials — 1.49% | ||||||
$123,000 | LyondellBasell Industries NV, 5.00%, 4/15/19 | $ | 124,863 | |||
230,000 | Sherwin-Williams Co. (The), 2.25%, 5/15/20 | 226,183 | ||||
|
| |||||
351,046 | ||||||
|
| |||||
Communications — 3.74% | ||||||
100,000 | AT&T, Inc., (LIBOR USD 3-Month + 0.950%), 2.67%, 7/15/21(a) | 101,058 | ||||
275,000 | AT&T, Inc., (LIBOR USD 3-Month + 0.890%), 2.72%, 2/14/23(a) | 278,816 | ||||
100,000 | AT&T, Inc., 5.20%, 3/15/20 | 103,898 | ||||
250,000 | Discovery Communications LLC, 2.20%, 9/20/19 | 247,443 | ||||
150,000 | Verizon Communications, Inc., (LIBOR USD 3-Month + 0.550%), 2.45%, 5/22/20(a) | 150,643 | ||||
|
| |||||
881,858 | ||||||
|
| |||||
Consumer, Cyclical — 9.10% | ||||||
50,000 | American Honda Finance Corp., (LIBOR USD 3-Month + 0.610%), MTN, 2.67%, 9/9/21(a) | 50,393 | ||||
225,000 | Delta Air Lines, Inc., 2.88%, 3/13/20 | 223,534 | ||||
200,000 | Ford Motor Credit Co. LLC, 2.02%, 5/3/19 | 197,863 | ||||
300,000 | Ford Motor Credit Co. LLC, 2.34%, 11/2/20 | 292,114 | ||||
200,000 | General Motors Financial Co., Inc., 2.40%, 5/9/19 | 198,992 | ||||
250,000 | General Motors Financial Co., Inc., 3.10%, 1/15/19 | 250,269 | ||||
250,000 | Hyundai Capital America, MTN, 2.50%, 3/18/19(b) | 248,468 | ||||
170,000 | Newell Brands, Inc., 2.60%, 3/29/19 | 169,230 | ||||
250,000 | Nissan Motor Acceptance Corp., (LIBOR USD 3-Month + 0.690%), MTN, 2.98%, 9/28/22(a),(b) | 250,253 | ||||
65,000 | Royal Caribbean Cruises Ltd., 2.65%, 11/28/20 | 64,028 | ||||
200,000 | Walgreens Boots Alliance, Inc., 2.70%, 11/18/19 | 199,027 | ||||
|
| |||||
2,144,171 | ||||||
|
| |||||
Consumer, Non-cyclical — 11.10% | ||||||
200,000 | Allergan Funding SCS, 3.00%, 3/12/20 | 198,969 | ||||
120,000 | Amgen, Inc., 2.20%, 5/11/20 | 118,307 | ||||
100,000 | Anthem, Inc., 2.50%, 11/21/20 | 98,305 | ||||
200,000 | Becton Dickinson and Co., 2.68%, 12/15/19 | 198,844 | ||||
100,000 | Becton Dickinson and Co., (LIBOR USD 3-Month + 0.875%), 2.94%, 12/29/20(a) | 100,106 | ||||
125,000 | Becton Dickinson and Co., (LIBOR USD 3-Month + 1.030%), 3.06%, 6/6/22(a) | 125,386 | ||||
175,000 | Cardinal Health, Inc., 1.95%, 6/14/19 | 173,102 | ||||
150,000 | Celgene Corp., 2.88%, 2/19/21 | 148,937 | ||||
150,000 | Church & Dwight Co., Inc., (LIBOR USD 3-Month + 0.150%), 1.90%, 1/25/19(a) | 150,000 | ||||
250,000 | CVS Health Corp., 2.80%, 7/20/20 | 248,216 | ||||
250,000 | CVS Health Corp., 3.35%, 3/9/21 | 251,361 | ||||
150,000 | Kraft Heinz Foods Co., 5.38%, 2/10/20 | 156,139 | ||||
150,000 | McKesson Corp., 2.28%, 3/15/19 | 149,193 | ||||
75,000 | Mylan NV, 3.00%, 12/15/18 | 74,999 |
17 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$225,000 | Shire Acquisitions Investments Ireland DAC, 1.90%, 9/23/19 | $ | 221,286 | |||
200,000 | Tyson Foods, Inc., (LIBOR USD 3-Month + 0.550%), 2.57%, 6/2/20(a) | 200,436 | ||||
|
| |||||
2,613,586 | ||||||
|
| |||||
Energy — 5.96% | ||||||
25,000 | Anadarko Petroleum Corp., 6.95%, 6/15/19 | 26,146 | ||||
150,000 | ConocoPhillips Co., (LIBOR USD 3-Month + 0.900%), 2.74%, 5/15/22(a) | 152,863 | ||||
175,000 | Enterprise Products Operating LLC, 2.80%, 2/15/21 | 173,091 | ||||
150,000 | Enterprise Products Operating LLC, 6.50%, 1/31/19 | 154,329 | ||||
223,000 | EOG Resources, Inc., 4.40%, 6/1/20 | 229,126 | ||||
200,000 | Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 | 212,465 | ||||
200,000 | Marathon Oil Corp., 2.70%, 6/1/20 | 197,041 | ||||
250,000 | Williams Partners LP, 5.25%, 3/15/20 | 259,052 | ||||
|
| |||||
1,404,113 | ||||||
|
| |||||
Financial — 24.97% | ||||||
100,000 | Ally Financial, Inc., 3.50%, 1/27/19 | 100,125 | ||||
200,000 | Ally Financial, Inc., 4.75%, 9/10/18 | 201,540 | ||||
227,000 | American Tower Corp., REIT, 3.40%, 2/15/19 | 227,810 | ||||
250,000 | Australia & New Zealand Banking Group Ltd., (LIBOR USD 3-Month + 0.710%), 2.59%, 5/19/22(a),(b) | 251,834 | ||||
200,000 | Bank of America Corp., (LIBOR USD 3-Month + 0.660%), GMTN, 2.40%, 7/21/21(a) | 200,643 | ||||
100,000 | Bank of Montreal, (LIBOR USD 3-Month + 0.790%), MTN, 2.75%, 8/27/21(a) | 100,935 | ||||
150,000 | Bank of Nova Scotia (The), 2.50%, 1/8/21 | 147,755 | ||||
250,000 | Bank of Nova Scotia (The), (LIBOR USD 3-Month + 0.620%), 2.80%, 9/19/22(a) | 250,450 | ||||
200,000 | Barclays Plc, 2.75%, 11/8/19 | 198,388 | ||||
250,000 | Citibank NA, (LIBOR USD 3-Month + 0.500%), 2.57%, 6/12/20(a) | 251,360 | ||||
100,000 | Citigroup, Inc., (LIBOR USD 3-Month + 1.070%), 3.12%, 12/8/21(a) | 101,403 | ||||
250,000 | Cooperatieve Rabobank UA, (LIBOR USD 3-Month + 0.480%), 2.19%, 1/10/23(a) | 249,540 | ||||
250,000 | Credit Suisse Group Funding Guernsey Ltd., 3.13%, 12/10/20 | 248,608 | ||||
100,000 | Goldman Sachs Group, Inc. (The), 2.55%, 10/23/19 | 99,457 | ||||
150,000 | Goldman Sachs Group, Inc. (The), (LIBOR USD 3-Month + 0.750%), 2.56%, 2/23/23(a) | 149,415 | ||||
200,000 | HSBC Holdings Plc, (LIBOR USD 3-Month + 1.660%), 3.60%, 5/25/21(a) | 206,795 | ||||
250,000 | JPMorgan Chase & Co., (LIBOR USD 3-Month + 0.550%), 2.61%, 3/9/21(a) | 250,622 | ||||
73,000 | JPMorgan Chase & Co., (LIBOR USD 3-Month + 0.680%), 2.69%, 6/1/21(a) | 73,401 | ||||
200,000 | JPMorgan Chase & Co., 4.95%, 3/25/20 | 207,594 | ||||
50,000 | Metropolitan Life Global Funding I, 2.05%, 6/12/20(b) | 49,054 |
18 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$ 75,000 | Morgan Stanley, (LIBOR USD 3-Month + 0.550%), GMTN, 2.29%, 2/10/21(a) | $ | 75,041 | |||
25,000 | Morgan Stanley, GMTN, 2.45%, 2/1/19 | 24,949 | ||||
200,000 | Morgan Stanley, (LIBOR USD 3-Month + 0.930%), MTN, 2.67%, 7/22/22(a) | 200,758 | ||||
150,000 | Morgan Stanley, GMTN, 5.50%, 7/24/20 | 157,561 | ||||
250,000 | National Australia Bank Ltd., (LIBOR USD 3-Month + 0.890%), 2.60%, 1/10/22(a),(b) | 253,472 | ||||
200,000 | Santander UK Group Holdings Plc, 2.88%, 10/16/20 | 198,115 | ||||
200,000 | Swedbank AB, (LIBOR USD 3-Month + 0.700%), 2.81%, 3/14/22(a),(b) | 202,153 | ||||
200,000 | Toronto-Dominion Bank (The), (LIBOR USD 3-Month + 1.000%), MTN, 2.70%, 4/7/21(a) | 203,677 | ||||
250,000 | Wells Fargo & Co., (LIBOR USD 3-Month + 0.930%), 2.74%, 2/11/22(a) | 251,565 | ||||
250,000 | Wells Fargo Bank NA, 2.60%, 1/15/21 | 246,512 | ||||
250,000 | Westpac Banking Corp., (LIBOR USD 3-Month + 0.570%), 2.11%, 1/11/23(a) | 249,135 | ||||
250,000 | Westpac Banking Corp., (LIBOR USD 3-Month + 0.710%), 3.00%, 6/28/22(a) | 251,921 | ||||
|
| |||||
5,881,588 | ||||||
|
| |||||
Industrial — 5.21% | ||||||
250,000 | Caterpillar Financial Services Corp., (LIBOR USD 3-Month + 0.590%), MTN, 2.62%, 6/6/22(a) | 251,761 | ||||
200,000 | General Electric Co., (LIBOR USD 3-Month + 1.000%), 3.12%, 3/15/23(a) | 199,611 | ||||
200,000 | Ingersoll-Rand Global Holding Co. Ltd., 2.90%, 2/21/21 | 199,495 | ||||
250,000 | John Deere Capital Corp., (LIBOR USD 3-Month + 0.480%), MTN, 2.53%, 9/8/22(a) | 250,804 | ||||
125,000 | Northrop Grumman Corp., 2.08%, 10/15/20 | 122,319 | ||||
205,000 | Packaging Corp. of America, 2.45%, 12/15/20 | 201,761 | ||||
|
| |||||
1,225,751 | ||||||
|
| |||||
Technology — 2.69% | ||||||
225,000 | Dell International LLC / EMC Corp., 3.48%, 6/1/19(b) | 226,018 | ||||
200,000 | DXC Technology Co., 2.88%, 3/27/20 | 198,886 | ||||
200,000 | Hewlett Packard Enterprise Co., 3.60%, 10/15/20 | 201,850 | ||||
7,000 | Oracle Corp., (LIBOR USD 3-Month + 0.580%), 2.30%, 1/15/19(a) | 7,025 | ||||
|
| |||||
633,779 | ||||||
|
| |||||
Utilities — 2.15% | ||||||
200,000 | Exelon Generation Co. LLC, 5.20%, 10/1/19 | 206,114 |
19 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$150,000 | Mississippi Power Co., (LIBOR USD 3-Month + 0.650%), 2.94%, 3/27/20(a) | $ | 150,052 | |||
150,000 | Sempra Energy, (LIBOR USD 3-Month + 0.500%), 2.21%, 1/15/21(a) | 150,110 | ||||
|
| |||||
506,276 | ||||||
|
| |||||
Total Corporate Bonds | 15,642,168 | |||||
|
| |||||
(Cost $15,724,221) | ||||||
Asset Backed Securities — 22.56% | ||||||
60,000 | Ally Auto Receivables Trust, Series 2014-2, Class D, 2.99%, 6/15/21 | 60,104 | ||||
175,000 | Ally Auto Receivables Trust, Series 2014-3, Class C, 2.14%, 7/15/20 | 174,525 | ||||
185,000 | AmeriCredit Automobile Receivables Trust, Series 2014-2, Class E, 3.37%, 11/8/21(b) | 185,745 | ||||
150,000 | AmeriCredit Automobile Receivables Trust, Series 2014-4, Class C, 2.47%, 11/9/20 | 149,964 | ||||
210,000 | AmeriCredit Automobile Receivables Trust, Series 2015-1, Class C, 2.51%, 1/8/21 | 209,956 | ||||
230,000 | AmeriCredit Automobile Receivables Trust, Series 2015-2, Class C, 2.40%, 1/8/21 | 229,181 | ||||
199,000 | AmeriCredit Automobile Receivables Trust, Series 2015-2, Class D, 3.00%, 6/8/21 | 198,980 | ||||
305,000 | AmeriCredit Automobile Receivables Trust, Series 2015-3, Class C, 2.73%, 3/8/21 | 305,217 | ||||
175,000 | AmeriCredit Automobile Receivables Trust, Series 2017-1, Class B, 2.30%, 2/18/22 | 172,530 | ||||
145,000 | CarMax Auto Owner Trust, Series 2014-4, Class B, 2.20%, 9/15/20 | 144,538 | ||||
190,000 | CarMax Auto Owner Trust, Series 2016-2, Class C, 2.56%, 2/15/22 | 188,504 | ||||
8,277 | Credit-Based Asset Servicing & Securitization LLC, Series 2005-CB2, Class M1, (LIBOR USD 1-Month + 0.660%), 2.53%, 4/25/36(a) | 8,288 | ||||
225,000 | Drive Auto Receivables Trust, Series 2016-BA, Class C, 3.19%, 7/15/22(b) | 225,571 | ||||
250,000 | Drive Auto Receivables Trust, Series 2017-AA, Class C, 2.98%, 1/18/22(b) | 250,081 | ||||
235,000 | Drive Auto Receivables Trust, Series 2017-BA, Class D, 3.72%, 10/17/22(b) | 236,836 | ||||
215,000 | Ford Credit Auto Owner Trust, Series 2014-1, Class B, 2.41%, 11/15/25(b) | 213,923 | ||||
150,000 | GM Financial Automobile Leasing Trust, Series 2015-3, Class B, 2.32%, 11/20/19 | 149,755 | ||||
180,000 | GM Financial Automobile Leasing Trust, Series 2015-3, Class C, 2.98%, 11/20/19 | 180,238 | ||||
150,000 | GM Financial Automobile Leasing Trust, Series 2016-3, Class B, 1.97%, 5/20/20 | 148,598 |
20 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$ 45,493 | RASC Series Trust, Series 2005-KS9, Class M2, (LIBOR USD 1-Month + 0.430%), 2.30%, 10/25/35(a) | $ | 45,513 | |||
60,000 | Santander Drive Auto Receivables Trust, Series 2014-2, Class D, 2.76%, 2/18/20 | 60,047 | ||||
10,735 | Santander Drive Auto Receivables Trust, Series 2014-3, Class C, 2.13%, 8/17/20 | 10,734 | ||||
221,000 | Santander Drive Auto Receivables Trust, Series 2015-1, Class D, 3.24%, 4/15/21 | 222,053 | ||||
100,000 | Santander Drive Auto Receivables Trust, Series 2015-2, Class D, 3.02%, 4/15/21 | 100,304 | ||||
231,000 | Santander Drive Auto Receivables Trust, Series 2015-4, Class C, 2.97%, 3/15/21 | 231,403 | ||||
250,000 | Santander Drive Auto Receivables Trust, Series 2015-5, Class D, 3.65%, 12/15/21 | 252,351 | ||||
118,587 | Santander Drive Auto Receivables Trust, Series 2016-1, Class B, 2.47%, 12/15/20 | 118,545 | ||||
150,000 | Santander Drive Auto Receivables Trust, Series 2016-3, Class B, 1.89%, 6/15/21 | 149,257 | ||||
347,000 | Santander Drive Auto Receivables Trust, Series 2017-1, Class B, 2.10%, 6/15/21 | 345,402 | ||||
200,000 | Tesla Auto Lease Trust, Series 2018-A, Class C, 2.97%, 4/20/20(b) | 199,462 | ||||
150,000 | World Omni Auto Receivables Trust, Series 2016-B, Class B, 1.73%, 7/15/23 | 145,971 | ||||
|
| |||||
Total Asset Backed Securities | 5,313,576 | |||||
|
| |||||
(Cost $5,342,988) | ||||||
U.S. Government Agency Backed Mortgages — 5.01% | ||||||
Fannie Mae — 0.84% | ||||||
4,973 | Pool #725098, 5.50%, 12/1/18 | 5,002 | ||||
4,243 | Pool #739413, 5.00%, 10/1/18 | 4,265 | ||||
43,796 | Pool #888467, 6.00%, 6/1/22 | 45,799 | ||||
46,013 | Pool #AL0202, 4.00%, 4/1/21 | 47,339 | ||||
4,975 | Series 2003-120, Class BL, 3.50%, 12/1/18 | 4,978 | ||||
16,706 | Series 2003-55, Class CD, 5.00%, 6/1/23 | 17,373 | ||||
3,068 | Series 2004-3, Class BE, 4.00%, 2/1/19 | 3,072 | ||||
3,880 | Series 2011-23, Class AB, 2.75%, 6/1/20 | 3,881 | ||||
65,291 | Series 2012-1, Class GB, 2.00%, 2/1/22 | 64,606 | ||||
|
| |||||
196,315 | ||||||
|
| |||||
Freddie Mac — 4.17% | ||||||
200,000 | Series 2010-K7, Class B, 5.50%, 4/1/20(b),(c) | 208,483 | ||||
250,000 | Series 2011-K10, Class B, 4.62%, 11/1/49(b),(c) | 257,419 | ||||
195,000 | Series 2011-K11, Class B, 4.42%, 12/1/48(b),(c) | 199,904 | ||||
220,000 | Series 2012-K709, Class B, 3.74%, 4/1/45(b),(c) | 221,383 | ||||
1,999 | Series 2649, Class QH, 4.50%, 7/1/18 | 1,999 | ||||
2,707 | Series 2675, Class CK, 4.00%, 9/1/18 | 2,713 | ||||
4,349 | Series 2761, Class CB, 4.00%, 3/1/19 | 4,365 | ||||
24,442 | Series 3710, Class AB, 2.00%, 8/1/20 | 24,347 |
21 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
Principal Amount | Value | |||||
| ||||||
$ 41,127 | Series 3726, Class BA, 2.00%, 8/1/20 | $ | 40,857 | |||
21,813 | Series 3852, Class EA, 4.50%, 12/1/21 | 22,146 | ||||
|
| |||||
983,616 | ||||||
|
| |||||
Total U.S. Government Agency Backed Mortgages | 1,179,931 | |||||
|
| |||||
(Cost $1,189,656) | ||||||
Municipal Bonds — 1.02% | ||||||
Connecticut — 0.51% | ||||||
120,000 | City of Bridgeport CT GO, Series D, 2.84%, 7/1/19 | 119,779 | ||||
|
| |||||
Minnesota — 0.51% | ||||||
120,000 | Duluth Independent School District No 709 GO, Series B, 3.00%, 2/1/20 | 119,655 | ||||
|
| |||||
Total Municipal Bonds | 239,434 | |||||
|
| |||||
(Cost $241,066) | ||||||
U.S. Treasury Obligations — 0.42% | ||||||
U.S. Treasury Notes — 0.42% | ||||||
100,000 | 1.00%, 3/15/19 | 98,937 | ||||
|
| |||||
Total U.S. Treasury Obligations | 98,937 | |||||
|
| |||||
(Cost $99,027) | ||||||
Collateralized Mortgage Obligations — 0.18% | ||||||
44,345 | JP Morgan Resecuritization Trust Series, Series 2014-1, Class 9A3, (LIBOR USD 1-Month + 0.290%), 1.91%, 12/26/35(a),(b) | 43,716 | ||||
|
| |||||
Total Collateralized Mortgage Obligations | 43,716 | |||||
|
| |||||
(Cost $43,535) | ||||||
Shares | ||||||
Investment Company — 1.28% | ||||||
301,590 | U.S. Government Money Market Fund, RBC Institutional Class 1(d) | 301,590 | ||||
|
| |||||
Total Investment Company | 301,590 | |||||
|
| |||||
(Cost $301,590) | ||||||
Total Investments | $ | 22,819,352 | ||||
(Cost $22,942,083)(e) — 96.88% | ||||||
Other assets in excess of liabilities — 3.12% | 734,891 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 23,554,243 | ||||
|
|
22 |
SCHEDULE OF PORTFOLIO INVESTMENTS |
RBC Ultra-Short Fixed Income Fund (cont.)
March 31, 2018
(a) | Variable rate security. The rate reflected in the Schedule of Portfolio Investments is the rate in effect on March 31, 2018. |
(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) | Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
(d) | Affiliated investment. |
(e) | See Notes to Financial Statements for the tax cost of securities and the breakdown of unrealized appreciation (depreciation). |
Financial futures contracts as of March 31, 2018:
Short Position | Number of Contracts | Expiration Date | Value/Unrealized Depreciation | Notional Value | Clearinghouse | |||||||||||||||||
Two Year U.S. Treasury Note | 14 | June 2018 | $(984) | USD | $2,975,507 | Barclays Plc | ||||||||||||||||
Total | $(984) |
Abbreviations used are defined below:
GMTN - Global Medium Term Note
GO - General Obligations
LIBOR - London Interbank Offered Rate
MTN - Medium Term Note
REIT - Real Estate Investment Trust
USD - United States Dollar
See Notes to the Financial Statements.
23 |
|
Statements of Assets and Liabilities
March 31, 2018
RBC Short Duration Fixed Income Fund | RBC Ultra-Short Fixed Income Fund | |||||||||||||||
Assets: | ||||||||||||||||
Investments in securities, at value: | ||||||||||||||||
Unaffiliated investments (cost $26,033,094 and $22,640,493, respectively) | $ | 25,730,122 | $ | 22,517,762 | ||||||||||||
Affiliated investments (cost $134,403 and $301,590, respectively) | 134,403 | 301,590 | ||||||||||||||
Cash | 4,576 | 92 | ||||||||||||||
Cash at broker for financial future contracts | 35,088 | 55,677 | ||||||||||||||
Interest and dividend receivable | 128,772 | 96,809 | ||||||||||||||
Receivable from advisor | 10,992 | 25,103 | ||||||||||||||
Receivable for capital shares issued | — | 595,000 | ||||||||||||||
Unrealized appreciation on futures contracts | 1,710 | — | ||||||||||||||
Prepaid expenses and other assets | 22,912 | 25,633 | ||||||||||||||
|
|
|
| |||||||||||||
Total Assets | 26,068,575 | 23,617,666 | ||||||||||||||
|
|
|
| |||||||||||||
Liabilities: | ||||||||||||||||
Payable for capital shares redeemed | 552 | 7,499 | ||||||||||||||
Unrealized depreciation on futures contracts | 7,171 | 984 | ||||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Accounting fees | 6,419 | 6,353 | ||||||||||||||
Audit fees | 37,980 | 37,980 | ||||||||||||||
Trustees’ fees | 14 | 11 | ||||||||||||||
Custodian fees | 501 | 497 | ||||||||||||||
Shareholder reports | 4,543 | 4,006 | ||||||||||||||
Transfer agent fees | 1,990 | 2,801 | ||||||||||||||
Other | 1,349 | 3,292 | ||||||||||||||
|
|
|
| |||||||||||||
Total Liabilities | 60,519 | 63,423 | ||||||||||||||
|
|
|
| |||||||||||||
Net Assets | $ | 26,008,056 | $ | 23,554,243 | ||||||||||||
|
|
|
| |||||||||||||
Net Assets Consists of: | ||||||||||||||||
Capital | $ | 26,371,660 | $ | 23,809,604 | ||||||||||||
Undistributed net investment income | 25,729 | 0 | ||||||||||||||
Accumulated net realized losses from investment transactions and futures contracts | (80,900 | ) | (131,646 | ) | ||||||||||||
Net unrealized depreciation on investments and futures contracts | (308,433 | ) | (123,715 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net Assets | $ | 26,008,056 | $ | 23,554,243 | ||||||||||||
|
|
|
|
24 |
FINANCIAL STATEMENTS |
Statements of Assets and Liabilities (cont.)
March 31, 2018
RBC Short Duration Fixed Income Fund | RBC Ultra-Short Fixed Income Fund | |||||||||||||||
Net Assets | ||||||||||||||||
Class A | $ | 526,116 | $ | 1,977,676 | ||||||||||||
Class I | 25,481,940 | 21,576,567 | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 26,008,056 | $ | 23,554,243 | ||||||||||||
|
|
|
| |||||||||||||
Shares Outstanding (Unlimited number of shares authorized, no par value): | ||||||||||||||||
Class A | 53,422 | 200,938 | ||||||||||||||
Class I | 2,588,521 | 2,195,761 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 2,641,943 | 2,396,699 | ||||||||||||||
|
|
|
| |||||||||||||
Net Asset Values and Redemption Prices Per Share: | ||||||||||||||||
Class A | $ | 9.85 | $ | 9.84 | ||||||||||||
|
|
|
| |||||||||||||
Class I | $ | 9.84 | $ | 9.83 | ||||||||||||
|
|
|
|
See Notes to the Financial Statements.
25 |
FINANCIAL STATEMENTS |
For the Year Ended March 31, 2018
RBC Short Duration Fixed Income Fund | RBC Ultra-Short Fixed Income Fund | |||||||||||||||
Investment Income: | ||||||||||||||||
Interest income | $ | 546,259 | $ | 412,464 | ||||||||||||
Dividend income - affiliated | 3,749 | 4,198 | ||||||||||||||
|
|
|
| |||||||||||||
Total Investment Income | 550,008 | 416,662 | ||||||||||||||
|
|
|
| |||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 67,428 | 45,621 | ||||||||||||||
Distribution fees–Class A | 589 | 976 | ||||||||||||||
Accounting fees | 44,437 | 43,738 | ||||||||||||||
Audit fees | 36,980 | 36,980 | ||||||||||||||
Custodian fees | 2,621 | 2,833 | ||||||||||||||
Insurance fees | 4,039 | 4,039 | ||||||||||||||
Legal fees | 2,749 | 2,253 | ||||||||||||||
Registrations and filing fees | 35,985 | 37,032 | ||||||||||||||
Shareholder reports | 11,873 | 12,079 | ||||||||||||||
Transfer agent fees–Class A | 3,801 | 3,638 | ||||||||||||||
Transfer agent fees–Class I | 5,198 | 10,653 | ||||||||||||||
Trustees’ fees and expenses | 1,831 | 1,580 | ||||||||||||||
Tax expense | 3,860 | 3,860 | ||||||||||||||
Other fees | 4,282 | 4,836 | ||||||||||||||
|
|
|
| |||||||||||||
Total expenses before fee waiver/reimbursement | 225,673 | 210,118 | ||||||||||||||
Expenses waived/reimbursed by: | ||||||||||||||||
Advisor | (146,397 | ) | (153,957 | ) | ||||||||||||
|
|
|
| |||||||||||||
Net expenses | 79,276 | 56,161 | ||||||||||||||
|
|
|
| |||||||||||||
Net Investment Income | 470,732 | 360,501 | ||||||||||||||
|
|
|
| |||||||||||||
Realized/Unrealized Gains/(Losses): | ||||||||||||||||
Net realized gains/(losses) on: | ||||||||||||||||
Investment transactions | 31,509 | 13,097 | ||||||||||||||
Futures contracts | (10,996 | ) | 22,923 | |||||||||||||
|
|
|
| |||||||||||||
Net realized gains | 20,513 | 36,020 | ||||||||||||||
|
|
|
| |||||||||||||
Net change in unrealized appreciation/ (depreciation) on: | ||||||||||||||||
Investments | (358,068 | ) | (162,509 | ) | ||||||||||||
Futures contracts | 1,703 | (796 | ) | |||||||||||||
|
|
|
| |||||||||||||
Net unrealized losses | (356,365 | ) | (163,305 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | $ | 134,880 | $ | 233,216 | ||||||||||||
|
|
|
|
See Notes to the Financial Statements.
26 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Short Duration Fixed Income Fund | ||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||
From Investment Activities | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 470,732 | $ | 304,247 | ||||||||||||
Net realized gains from investments and futures contracts | 20,513 | 38,891 | ||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments and futures contracts | (356,365 | ) | 35,986 | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 134,880 | 379,124 | ||||||||||||||
|
|
|
| |||||||||||||
Distributions to Class A Shareholders: | ||||||||||||||||
From net investment income | (11,711 | ) | (20,031 | ) | ||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (460,660 | ) | (290,608 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (472,371 | ) | (310,639 | ) | ||||||||||||
|
|
|
| |||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 10,742,585 | 7,425,479 | ||||||||||||||
Distributions reinvested | 473,759 | 307,941 | ||||||||||||||
Cost of shares redeemed | (3,902,828 | ) | (3,000,632 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 7,313,516 | 4,732,788 | ||||||||||||||
|
|
|
| |||||||||||||
Net increase in net assets | 6,976,025 | 4,801,273 | ||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 19,032,031 | 14,230,758 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 26,008,056 | $ | 19,032,031 | ||||||||||||
|
|
|
| |||||||||||||
Undistributed net investment income | $ | 25,729 | $ | 25,740 | ||||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 1,077,703 | 744,665 | ||||||||||||||
Reinvested | 47,627 | 30,866 | ||||||||||||||
Redeemed | (392,493 | ) | (300,867 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 732,837 | 474,664 | ||||||||||||||
|
|
|
|
See Notes to the Financial Statements.
27 |
FINANCIAL STATEMENTS |
Statements of Changes in Net Assets
RBC Ultra-Short Fixed Income Fund | ||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||
From Investment Activities | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 360,501 | $ | 235,978 | ||||||||||||
Net realized gains from investments and futures contracts | 36,020 | 20,833 | ||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments and futures contracts | (163,305 | ) | 40,998 | |||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from operations | 233,216 | 297,809 | ||||||||||||||
|
|
|
| |||||||||||||
Distributions to Class A Shareholders: | ||||||||||||||||
From net investment income | (18,140 | ) | (34,635 | ) | ||||||||||||
Distributions to Class I Shareholders: | ||||||||||||||||
From net investment income | (348,417 | ) | (224,396 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from shareholder distributions | (366,557 | ) | (259,031 | ) | ||||||||||||
|
|
|
| |||||||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 17,017,207 | 3,700,065 | ||||||||||||||
Distributions reinvested | 367,105 | 258,897 | ||||||||||||||
Cost of shares redeemed | (8,374,669 | ) | (7,196,923 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in net assets resulting from capital transactions | 9,009,643 | (3,237,961 | ) | |||||||||||||
|
|
|
| |||||||||||||
Net increase/(decrease) in net assets | 8,876,302 | (3,199,183 | ) | |||||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 14,677,941 | 17,877,124 | ||||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 23,554,243 | $ | 14,677,941 | ||||||||||||
|
|
|
| |||||||||||||
Distributions in excess of net investment income | $ | — | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||
Share Transactions: | ||||||||||||||||
Issued | 1,722,286 | 374,203 | ||||||||||||||
Reinvested | 37,162 | 26,171 | ||||||||||||||
Redeemed | (847,556 | ) | (727,480 | ) | ||||||||||||
|
|
|
| |||||||||||||
Change in shares resulting from capital transactions | 911,892 | (327,106 | ) | |||||||||||||
|
|
|
|
See Notes to the Financial Statements.
28 |
|
RBC Short Duration Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Year | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Year | ||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ | 9.97 | 0.20 | (0.12) | 0.08 | (0.20) | — | — | (0.20) | $ | 9.85 | |||||||||||||||||||||||||
Year Ended 3/31/17 | 9.92 | 0.17 | 0.05 | 0.22 | (0.17) | — | — | (0.17) | 9.97 | |||||||||||||||||||||||||||
Year Ended 3/31/16 | 9.97 | 0.16 | (0.04) | 0.12 | (0.17) | — | — | (0.17) | 9.92 | |||||||||||||||||||||||||||
Year Ended 3/31/15 | 10.02 | 0.14 | —(b) | 0.14 | (0.18) | (0.01) | — | (0.19) | 9.97 | |||||||||||||||||||||||||||
Period Ended 3/31/14(c) | 10.04 | 0.01 | (0.02) | (0.01) | (0.01) | — | — | (0.01) | 10.02 | |||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ | 9.97 | 0.21 | (0.13) | 0.08 | (0.21) | — | — | (0.21) | $ | 9.84 | |||||||||||||||||||||||||
Year Ended 3/31/17 | 9.92 | 0.18 | 0.05 | 0.23 | (0.18) | — | — | (0.18) | 9.97 | |||||||||||||||||||||||||||
Year Ended 3/31/16 | 9.97 | 0.17 | (0.04) | 0.13 | (0.18) | — | — | (0.18) | 9.92 | |||||||||||||||||||||||||||
Year Ended 3/31/15 | 10.02 | 0.15 | —(b) | 0.15 | (0.19) | (0.01) | — | (0.20) | 9.97 | |||||||||||||||||||||||||||
Period Ended 3/31/14(c) | 10.00 | 0.04 | 0.02 | 0.06 | (0.04) | — | — | (0.04) | 10.02 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | Less than $0.01 or $(0.01) per share. |
(c) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
29 |
FINANCIAL HIGHLIGHTS |
RBC Short Duration Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Year Ended 3/31/18 | 0.78% | $ | 526 | 0.45% | 1.98% | 1.71% | 55% | |||||||||||||||||
Year Ended 3/31/17 | 2.23% | 666 | 0.45% | 1.69% | 1.53% | 37% | ||||||||||||||||||
Year Ended 3/31/16 | 1.18% | 1,305 | 0.45% | 1.60% | 1.70% | 50% | ||||||||||||||||||
Year Ended 3/31/15 | 1.42% | 1,934 | 0.45% | 1.45% | 2.07% | 57% | ||||||||||||||||||
Period Ended 3/31/14(b) | (0.08)%(c) | 10 | 0.45%(d) | 1.33%(d) | 43.21%(d) | 46% | ||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 0.78% | $ | 25,482 | 0.35% | 2.10% | 0.99% | 55% | |||||||||||||||||
Year Ended 3/31/17 | 2.33% | 18,366 | 0.35% | 1.78% | 1.12% | 37% | ||||||||||||||||||
Year Ended 3/31/16 | 1.28% | 12,925 | 0.35% | 1.70% | 1.37% | 50% | ||||||||||||||||||
Year Ended 3/31/15 | 1.51% | 12,344 | 0.35% | 1.55% | 1.68% | 57% | ||||||||||||||||||
Period Ended 3/31/14(b) | 0.57%(c) | 10,436 | 0.35%(d) | 1.41%(d) | 3.66%(d) | 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) | 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. |
(b) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
(c) | Not annualized. |
(d) | Annualized. |
See Notes to the Financial Statements.
30 |
FINANCIAL HIGHLIGHTS |
RBC Ultra-Short Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
Investment Activities | Distributions | |||||||||||||||||||||||||||
Net Asset Value, Beginning of Year | Net Investment Income(a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Year | ||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ 9.90 | 0.18 | (0.06 | ) | 0.12 | (0.18 | ) | (0.18 | ) | $9.84 | ||||||||||||||||||
Year Ended 3/31/17 | 9.87 | 0.14 | 0.04 | 0.18 | (0.15 | ) | (0.15 | ) | 9.90 | |||||||||||||||||||
Year Ended 3/31/16 | 9.89 | 0.11 | — | 0.11 | (0.13 | ) | (0.13 | ) | 9.87 | |||||||||||||||||||
Year Ended 3/31/15 | 9.99 | 0.08 | (0.02 | ) | 0.06 | (0.16 | ) | (0.16 | ) | 9.89 | ||||||||||||||||||
Period Ended 3/31/14(b) | 9.98 | — | 0.02 | 0.02 | (0.01 | ) | (0.01 | ) | 9.99 | |||||||||||||||||||
Class I | ||||||||||||||||||||||||||||
Year Ended 3/31/18 | $ 9.88 | 0.19 | (0.05 | ) | 0.14 | (0.19 | ) | (0.19 | ) | $9.83 | ||||||||||||||||||
Year Ended 3/31/17 | 9.87 | 0.15 | 0.02 | 0.17 | (0.16 | ) | (0.16 | ) | 9.88 | |||||||||||||||||||
Year Ended 3/31/16 | 9.89 | 0.12 | — | 0.12 | (0.14 | ) | (0.14 | ) | 9.87 | |||||||||||||||||||
Year Ended 3/31/15 | 9.98 | 0.10 | (0.02 | ) | 0.08 | (0.17 | ) | (0.17 | ) | 9.89 | ||||||||||||||||||
Period Ended 3/31/14(c) | 10.00 | 0.02 | (0.01 | ) | 0.01 | (0.03 | ) | (0.03 | ) | 9.98 |
(a) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(b) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
(c) | For the period from December 20, 2013 (commencement of operations) to March 31, 2014. |
31 |
FINANCIAL HIGHLIGHTS |
RBC Ultra-Short Fixed Income Fund
(Selected data for a share outstanding throughout the periods indicated)
Ratios/Supplemental Data | ||||||||||||||||||||||||
Total Return(a) | Net Assets, End of Year (000’s) | Ratio of Net Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses to Average Net Assets* | Portfolio Turnover Rate** | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Year Ended 3/31/18 | 1.21% | $ 1,978 | 0.39%(b) | 1.83% | 1.54% | 68% | ||||||||||||||||||
Year Ended 3/31/17 | 1.84% | 667 | 0.40% | 1.41% | 1.30% | 52% | ||||||||||||||||||
Year Ended 3/31/16 | 1.16% | 4,395 | 0.40% | 1.09% | 1.25% | 41% | ||||||||||||||||||
Year Ended 3/31/15 | 0.62% | 608 | 0.40% | 0.78% | 3.04% | 63% | ||||||||||||||||||
Period Ended 3/31/14(c) | 0.21%(d) | 10 | 0.40%(e) | (0.08)%(e) | 43.18%(e) | 41% | ||||||||||||||||||
Class I | ||||||||||||||||||||||||
Year Ended 3/31/18 | 1.42% | $21,577 | 0.29%(b) | 1.89% | 1.08% | 68% | ||||||||||||||||||
Year Ended 3/31/17 | 1.74% | 14,011 | 0.30% | 1.47% | 1.14% | 52% | ||||||||||||||||||
Year Ended 3/31/16 | 1.24% | 13,482 | 0.30% | 1.22% | 1.13% | 41% | ||||||||||||||||||
Year Ended 3/31/15 | 0.83% | 13,922 | 0.30% | 1.03% | 1.65% | 63% | ||||||||||||||||||
Period Ended 3/31/14(c) | 0.14%(d) | 10,158 | 0.30%(e) | 0.88%(e) | 3.70%(e) | 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) | 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. |
(b) | Beginning October 2, 2017, the net operating expenses were contractually limited to 0.38% and 0.28% of average daily net assets for Class A and Class I, respectively. The ratio of net expenses to average net assets represents a blended percentage for the period ended March 31, 2018. |
(c) | For the period from March 3, 2014 (commencement of operations) to March 31, 2014. |
(d) | Not annualized. |
(e) | Annualized. |
See Notes to the Financial Statements.
32 |
|
March 31, 2018
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 18 portfolios. Overall responsibility for the management of the Trust is vested in its Board of Trustees (the “Board”). 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 A (formerly Class F) and Class I shares. Class A 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 (“U.S. 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 March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in the ASU shorten the amortization period for certain callable debt securities, held at a premium, to be amortized to the earliest call date. The ASU does not require an accounting change for securities held at a discount; which continues to be amortized to maturity. The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Management is currently evaluating the impact, if any, of applying this provision.
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.
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.
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
33 |
NOTES TO FINANCIAL STATEMENTS |
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 or other assets and liabilities. 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 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 Funds’ 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.
34 |
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 spreads, 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 the Funds’ investments as of March 31, 2018 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 | ||||||||||||||||||||||||||||||||
Corporate Bonds | $ | — | $ | 17,840,777 | $ | — | $ | 17,840,777 | ||||||||||||||||||||||||
Asset Backed Securities | — | 6,752,448 | — | 6,752,448 | ||||||||||||||||||||||||||||
Municipal Bonds | — | 254,406 | — | 254,406 | ||||||||||||||||||||||||||||
U.S. Government Agency Backed Mortgages | — | 838,775 | — | 838,775 | ||||||||||||||||||||||||||||
Collateralized Mortgage Obligations | — | 43,716 | — | 43,716 | ||||||||||||||||||||||||||||
Investment Company | 134,403 | — | — | 134,403 | ||||||||||||||||||||||||||||
Other Financial Instruments* | ||||||||||||||||||||||||||||||||
Financial futures contracts | 1,710 | — | — | 1,710 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Assets | $ | 136,113 | $ | 25,730,122 | $ | — | $ | 25,866,235 | ||||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Other Financial Instruments* | ||||||||||||||||||||||||||||||||
Financial futures contracts | $(7,171 | ) | $— | $ | — | $(7,171 | ) |
35 |
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 | ||||||||||||||||||||||||||||||||
Corporate Bonds | $ | — | $ | 15,642,168 | $ | — | $ | 15,642,168 | ||||||||||||||||||||||||
Asset Backed Securities | — | 5,313,576 | — | 5,313,576 | ||||||||||||||||||||||||||||
Municipal Bonds | — | 239,434 | — | 239,434 | ||||||||||||||||||||||||||||
U.S. Government Agency Backed Mortgages | — | 1,179,931 | — | 1,179,931 | ||||||||||||||||||||||||||||
Collateralized Mortgage Obligations | — | 43,716 | — | 43,716 | ||||||||||||||||||||||||||||
U.S. Treasury Obligations | — | 98,937 | — | 98,937 | ||||||||||||||||||||||||||||
Investment Company | 301,590 | — | — | 301,590 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Assets | $ | 301,590 | $ | 22,517,762 | $ | — | $ | 22,819,352 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Other Financial Instruments* | ||||||||||||||||||||||||||||||||
Financial futures contracts | $(984 | ) | $— | $— | $(984 | ) |
*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, 2018, the Funds held no investments categorized as Level 3 in the hierarchy.
During the year ended March 31, 2018, the Funds recognized no transfers to/from Level 1 or 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, 2018, the Funds do not have any 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 their 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 Fund’s 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 a Fund’s 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.
36 |
NOTES TO FINANCIAL STATEMENTS |
Financial Futures Contracts:
The Funds entered into futures contracts in an effort to manage the duration of the portfolio 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.
The Funds entered into U.S. Treasury Notes futures during the year ended March 31, 2018.
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 for financial futures contracts shown on the Statements of Assets and Liabilities at March 31, 2018.
Fair Values of derivative instruments as of March 31, 2018 are as follows:
Fair Values of Derivative Financial Instrument as of March 31, 2018 | ||||||||||||||||
Statement of Assets and Liabilities Location | ||||||||||||||||
Asset Derivatives | ||||||||||||||||
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Interest Rate Risk: | ||||||||||||||||
Unrealized appreciation on futures contracts | $ | 1,710 | $ | — | ||||||||||||
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|
|
| |||||||||||||
Total | $ | 1,710 | $ | — | ||||||||||||
|
|
|
| |||||||||||||
Liability Derivatives | ||||||||||||||||
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Interest Rate Risk: | ||||||||||||||||
Unrealized depreciation on futures contracts | $ | 7,171 | $ | 984 | ||||||||||||
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|
|
| |||||||||||||
Total | $ | 7,171 | $ | 984 | ||||||||||||
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|
|
|
37 |
NOTES TO FINANCIAL STATEMENTS |
The effect of derivative instruments on the Statement of Operations during the year ended March 31, 2018 is as follows:
Derivative Instruments Categorized by Risk Exposure | Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | ||||||||||||||
Net realized Gain/(Loss) From: | ||||||||||||||||
Interest Rate Risk: | ||||||||||||||||
Financial futures contracts | $ | (10,996 | ) | $ | 22,923 | |||||||||||
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|
| |||||||||||||
Total | $ | (10,996 | ) | $ | 22,923 | |||||||||||
|
|
|
|
Derivative Instruments Categorized by Risk Exposure | Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | ||||||||||||||
Net Change in Unrealized Appreciation/(Depreciation) From: | ||||||||||||||||
Interest Rate Risk: | ||||||||||||||||
Financial futures contracts | $ | 1,703 | $ | (796 | ) | |||||||||||
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|
|
| |||||||||||||
Total | $ | 1,703 | $ | (796 | ) | |||||||||||
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|
|
| |||||||||||||
For the year ended March 31, 2018, the average volume of derivative activities based on ending quarterly outstanding amounts are as follows: | ||||||||||||||||
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Futures long position (contracts) | 14 | — | ||||||||||||||
Futures short position (contracts) | 13 | 10 |
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. A Fund’s maximum risk of loss from counterparty credit risk on over-the-counter (“OTC”) 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.
Affiliated Investments:
The Funds invest in other Funds of the Trust (an “Affiliated Fund”). The Funds invest in U.S. Government Money Market Fund-RBC Institutional Class 1 as a cash sweep vehicle. The income earned by the Funds from the Affiliated Fund for the period is disclosed in the Statement of Operations. The table below details the transactions of the Funds in the Affiliated Fund.
38 |
NOTES TO FINANCIAL STATEMENTS |
Value March 31, 2017 | Purchases | Sales | Value March 31, 2018 | Dividends | ||||||||||||||||||||||||||||||||||||
Investments in U.S. Government Money Market Fund—RBC Institutional Class 1 | ||||||||||||||||||||||||||||||||||||||||
Short Duration Fixed Income Fund | $ | 84,885 | $ | 17,238,036 | $ | 17,188,518 | $ | 134,403 | $ | 3,749 | ||||||||||||||||||||||||||||||
Ultra-Short Fixed Income Fund | 624,927 | 29,353,564 | 29,676,901 | 301,590 | 4,198 |
Credit Enhancement:
Certain obligations held by 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.
Investment Transactions and Income:
Investment transactions 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 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. Paydown gains and losses on mortgage- 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 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.
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. 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, 2018, reclassifications for permanent differences were as follows:
Increase/(Decrease) Paid in Capital | Increase/(Decrease) Undistributed Net Investment Income/(Loss) | Increase/(Decrease) Accumulated Realized Gain/(Loss) | ||||||||||
Short Duration Fixed Income Fund | $— | $1,628 | $(1,628) | |||||||||
Ultra-Short Fixed Income Fund | (12 | ) | 6,057 | (6,045) |
39 |
NOTES TO FINANCIAL STATEMENTS |
3. Agreements and Other Transactions with Affiliates:
The Trust has entered into an investment advisory agreement with RBC GAM (US) under which RBC GAM (US) manages each Funds’ assets and furnishes related office facilities, equipment, research and personnel. The agreement requires each Fund to pay RBC GAM (US) a monthly fee based upon average daily net assets. Under the terms of the agreement, 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* | 0.23% |
* Prior to October 2, 2017, the annual rate for Ultra-Short Fixed Income Fund for advisory fee was 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 for Short Duration Fixed Income Fund and July 31, 2019 for Ultra-Short Fixed Income Fund.
Class A Annual Rate | Class I Annual Rate | |||||||
Short Duration Fixed Income Fund | 0.45% | 0.35% | ||||||
Ultra-Short Fixed Income Fund* | 0.38% | 0.28% |
* Prior to October 2, 2017, the annual rate for Ultra-Short Fixed Income Fund under the expense limitation agreement was 0.40% for Class A, and 0.30% for Class I.
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, 2018 were:
FYE 3/31/16 | FYE 3/31/17 | FYE 3/31/18 | Total | |||||||||||||
Short Duration Fixed Income Fund | $136,348 | $136,119 | $145,794 | $418,261 | ||||||||||||
Ultra-Short Fixed Income Fund | 142,691 | 136,853 | 153,278 | 432,822 |
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, 2018, the amounts waived were as follows:
Fees Waived | ||||
Short Duration Fixed Income Fund | $613 | |||
Ultra-Short Fixed Income Fund | 689 |
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.
40 |
NOTES TO FINANCIAL STATEMENTS |
BNY Mellon receives a fee for its services payable by the Funds based in part 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 $54,000 ($49,000 prior to October 1, 2017). 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, 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 A of each Fund to provide the initial assets for that share class. The table below shows, as of March 31, 2018, 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 | ||||||||||
Short Duration Fixed Income Fund | $ | 26,008,056 | 925,027 | 35.0% | ||||||||
Ultra-Short Fixed Income Fund | $ | 23,554,243 | 1,073,076 | 44.8% |
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. The current Plan fee rate for Class A is 0.10%.
Plan fees are based on average daily net assets of Class A. The Distributor, subject to applicable legal requirements, may waive a Plan fee voluntarily, in whole or in part. For the year ended March 31, 2018, 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, 2018 were as follows:
Purchases | Sales | |||||||
Short Duration Fixed Income Fund | $ | 19,279,156 | $ | 12,192,517 | ||||
Ultra-Short Fixed Income Fund | 21,091,796 | 12,723,472 |
41 |
NOTES TO FINANCIAL STATEMENTS |
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 on the following pages:
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||||||||||||||||||
For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | For the Year Ended March 31, 2018 | For the Year Ended March 31, 2017 | |||||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | — | $ | 96 | $ | 1,605,000 | $ | 255,000 | ||||||||||||||||||||||||
Distributions reinvested | 11,743 | 19,934 | 18,254 | 34,635 | ||||||||||||||||||||||||||||
Cost of shares redeemed | (144,285 | ) | (664,036 | ) | (302,427 | ) | (4,031,549 | ) | ||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Change in Class A | $ | (132,542 | ) | $ | (644,006 | ) | $ | 1,320,827 | $ | (3,741,914 | ) | |||||||||||||||||||||
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Class I | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 10,742,585 | $ | 7,425,383 | $ | 15,412,207 | $ | 3,445,065 | ||||||||||||||||||||||||
Distributions reinvested | 462,016 | 288,007 | 348,851 | 224,262 | ||||||||||||||||||||||||||||
Cost of shares redeemed | (3,758,543 | ) | (2,336,596 | ) | (8,072,242 | ) | (3,165,374 | ) | ||||||||||||||||||||||||
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Change in Class I | $ | 7,446,058 | $ | 5,376,794 | $ | 7,688,816 | $ | 503,953 | ||||||||||||||||||||||||
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Change in net assets resulting from capital transactions | $ | 7,313,516 | $ | 4,732,788 | $ | 9,009,643 | $ | (3,237,961 | ) | |||||||||||||||||||||||
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SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Issued | — | — | 162,392 | 25,726 | ||||||||||||||||||||||||||||
Reinvested | 1,179 | 1,998 | 1,847 | 3,499 | ||||||||||||||||||||||||||||
Redeemed | (14,522 | ) | (66,762 | ) | (30,674 | ) | (407,227 | ) | ||||||||||||||||||||||||
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Change in Class A | (13,343 | ) | (64,764 | ) | 133,565 | (378,002 | ) | |||||||||||||||||||||||||
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Class I | ||||||||||||||||||||||||||||||||
Issued | 1,077,703 | 744,665 | 1,559,894 | 348,477 | ||||||||||||||||||||||||||||
Reinvested | 46,448 | 28,868 | 35,315 | 22,672 | ||||||||||||||||||||||||||||
Redeemed | (377,971 | ) | (234,105 | ) | (816,882 | ) | (320,253 | ) | ||||||||||||||||||||||||
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Change in Class I | 746,180 | 539,428 | 778,327 | 50,896 | ||||||||||||||||||||||||||||
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Change in shares resulting from capital transactions | 732,837 | 474,664 | 911,892 | (327,106 | ) | |||||||||||||||||||||||||||
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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, 2016, March 31, 2017 and March 31, 2018) 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.
42 |
NOTES TO FINANCIAL STATEMENTS |
As of and during the year ended March 31, 2018, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended March 31, 2018, the Funds did not incur any interest or penalties.
As of March 31, 2018, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for each Fund was as follows:
Tax Cost Of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||||||||||||
Short Duration Fixed Income Fund | $ | 26,162,036 | $ | 13,411 | $ | (316,383 | ) | $ | (302,972 | ) | ||||||||||||||||||||||
Ultra-Short Fixed Income Fund | 22,941,898 | 25,128 | (148,658 | ) | (123,530 | ) |
The difference between book basis and tax basis unrealized appreciation/depreciation is attributable to the tax deferral of losses on wash sales and mark to market on derivatives.
The tax character of distributions during the year ended March 31, 2018 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Total Taxable Distributions | Total Distributions Paid | ||||||||||
Short Duration Fixed Income Fund | $ | 472,397 | $472,397 | $472,397 | ||||||||
Ultra-Short Fixed Income Fund | 366,568 | 366,568 | 366,568 |
The tax character of distributions during the year ended March 31, 2017 were as follows:
Distributions Paid From | ||||||||||||
Ordinary Income | Total Taxable Distributions | Total Distributions Paid | ||||||||||
Short Duration Fixed Income Fund | $ | 310,613 | $310,613 | $310,613 | ||||||||
Ultra-Short Fixed Income Fund | 259,020 | 259,020 | 259,020 |
As of March 31, 2018, the components of accumulated earnings/(losses) on a tax basis were as follows:
Short Duration Fixed Income Fund | Ultra-Short Fixed Income Fund | |||||||||||||||
Undistributed ordinary income | $ | 25,729 | $ | — | ||||||||||||
Undistributed long term gain | — | — | ||||||||||||||
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Accumulated earnings | 25,729 | — | ||||||||||||||
Accumulated capital loss carryforwards | (86,361 | ) | (131,831 | ) | ||||||||||||
Unrealized depreciation | (302,972 | ) | (123,530 | ) | ||||||||||||
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Total Accumulated Losses | $ | (363,604 | ) | $ | (255,361 | ) | ||||||||||
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During the year ended March 31, 2018, Short Duration Fixed Income Fund and Ultra-Short Fixed Income Fund utilized capital loss carryforwards in the amount of $20,588 and $29,559, respectively.
43 |
NOTES TO FINANCIAL STATEMENTS |
As of March 31, 2018, Short Duration Fixed Income Fund and Ultra-Short Fixed Income Fund had a short-term capital loss carryforward of $48,290 and $76,692, respectively, and a long-term capital loss carryforward of $38,071 and $55,139 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.
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. Significant Risks
Shareholder concentration risk:
As of March 31, 2018, the Funds had omnibus accounts which owned more than 10% of a Fund’s outstanding shares as shown below:
# of Non-Affiliated Omnibus Accounts | % of Fund | |||||||
Short Duration Fixed Income Fund | 1 | 62.1% | ||||||
Ultra-Short Fixed Income Fund | 4 | 54.9% |
Significant transactions by these shareholders may impact the Funds’ performance.
9. 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.
44 |
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To the Board of Trustees of RBC Funds Trust and Shareholders of RBC Short Duration Fixed Income Fund and RBC Ultra-Short Fixed Income Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of RBC Short Duration Fixed Income Fund and RBC Ultra-Short Fixed Income Fund (two of the funds constituting RBC Funds Trust, hereafter collectively referred to as the “Funds”) as of March 31, 2018, the related statements of operations for the year ended March 31, 2018, the statements of changes in net assets for each of the two years in the period ended March 31, 2018, including the related notes, and the financial highlights for each of the two years in the period ended March 31, 2018 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended March 31, 2018 and each of the financial highlights for each of the two years in the period ended March 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
The financial statements as of and for the year ended March 31, 2016 and the financial highlights for each of the periods ended on or prior to March 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated May 24, 2016 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2018 by correspondence with the custodian, transfer agent and broker. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
May 25, 2018
We have served as the auditor of one or more investment companies in the RBC Funds since 2016.
45 |
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The Funds report a portion of the income dividends distributed during the fiscal year ended March 31, 2018 as U.S. Government Income as follows:
U.S. Income | ||||
Short Duration Fixed Income Fund | 0.00% | |||
Ultra-Short Fixed Income Fund | 0.19% |
For the year ended March 31, 2018, the following Funds had a qualified interest income percentage of:
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. For each item above, it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
46 |
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Independent Trustees(1)(2)
Lucy Hancock Bode (66)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Franklin Street Partners (2014 to present); BioSignia (2006 to 2010).
Leslie H. Garner Jr. (67)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
Ronald James (67)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Bremer Financial Corporation (2004 to present); Best Buy Co. Inc. (2004 to 2013)
John A. MacDonald (69)
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: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
47 |
MANAGEMENT (UNAUDITED) |
Independent Trustees(1)(2)
James R. Seward (65)
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); Chartered Financial Analyst (1987 to present)
Number of Portfolios in Fund Complex Overseen by Trustee: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: Sooner Holdings (formerly Syntroleum Corporation) (1988 to 2015); Brookdale Senior Living Inc. (2008 to present)
William B. Taylor (72)
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: 18
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 2017); Balance Innovations LLC (2014 to present); Kansas City Symphony (1995 to present); Kansas University Endowment Association (2010 to present); Nelson Atkins Museum of Art (2017 to present); Breckenridge Music Festival (2017 to present)
Interested Trustees(1)(2)(3)
Kathleen A. Gorman (54)(5)
Position, Term of Office and Length of Time Served with the Trust: Trustee 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)
Number of Portfolios in Fund Complex Overseen by Trustee: 18
Other Director/Trustee Positions Held by Trustee During Past 5 Years: None
48 |
MANAGEMENT (UNAUDITED) |
Executive Officers(1)(3)(4)
Kathleen A. Gorman (54)
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 (51)
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)
Christina M. Weber (49)
Position, Term of Office and Length of Time Served with the Trust: Chief Compliance Officer since December 2012 and Secretary since September 2017
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)
(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 Fund’s 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.
49 |
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The Funds offer Class A and Class I shares.
Class A
Class A shares are intended for investors meeting certain minimum investment thresholds. This share class does not have an up-front sales charge (load). Class A 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.
50 |
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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; 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, 2017 through March 31, 2018.
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 10/1/17 | Ending Account Value 3/31/18 | Expenses Paid During Period* 10/1/17–3/31/18 | Annualized Expense Ratio During Period 10/1/17–3/31/18 | |||||||||||||||||||||||||||||||
Short Duration Fixed Income Fund | ||||||||||||||||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 996.10 | $ | 2.23 | 0.45% | |||||||||||||||||||||||||||
Class I | 1,000.00 | 995.60 | 1.73 | 0.35% | ||||||||||||||||||||||||||||||
Ultra-Short Fixed Income Fund | ||||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,002.30 | 1.89 | 0.38% | ||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,002.80 | 1.39 | 0.28% |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 181/365 (to reflect one half-year period).
51 |
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 10/1/17 | Ending Account Value 3/31/18 | Expenses Paid During Period* 10/1/17-3/31/18 | Annualized Expense Ratio During Period 10/1/17-3/31/18 | |||||||||||||||||||||||||||||||
Short Duration Fixed Income Fund | ||||||||||||||||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,022.56 | $ | 2.26 | 0.45% | |||||||||||||||||||||||||||
Class I | 1,000.00 | 1,023.06 | 1.76 | 0.35% | ||||||||||||||||||||||||||||||
Ultra-Short Fixed Income Fund | ||||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,022.91 | 1.91 | 0.38% | ||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,023.41 | 1.40 | 0.28% |
*Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 181/365 (to reflect one half-year period).
52 |
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, 2018.
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.
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 03-18
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 $233,080 for 2018 and $184,000 for 2017. |
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 2018 and $0 for 2017. |
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 $23,160 for 2018 and $22,500 for 2017. |
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 2018 and $0 for 2017. |
(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 2018 and $0 for 2017. |
(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 last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
[Note that until the date that the registrant has filed its first report on Form N-PORT (17 CFR 270.150), the registrant’s disclosures required by this Item are limited to any change in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting.]
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. 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. |
[Note that until the date that the registrant has filed its first report on Form N-PORT (17 CFR 270.150), in the certification required by Item 13(a)(2), the registrant’s certifying officers must certify that they have disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting.]
(a)(3) | Not applicable. |
(a)(4) | 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. |
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 May 25, 2018
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 May 25, 2018
By (Signature and Title)* /s/ Kathleen A. Hegna
Kathleen A. Hegna, Treasurer and Chief Financial Officer
(principal financial officer)
Date May 25, 2018
* Print the name and title of each signing officer under his or her signature.