RBC Balanced Growth & Income Fund

Transcription

1 RBC Balanced Growth & Income Fund September 2014 For Advisor Use Only

2 Markets were unpredictable. And we made the grade. An outstanding first year Smooth returns: 12 consecutive months of positive performance. Top-quartile performance: 17.3% returns since inception in August Value-add: 3.7% value-add over the average global neutral balanced fund. Fund Performance & Quartiles 3 mth 6 mth 1 yr Since Inception 4.3% 7.4% 19.1% 17.3% Source: RBC GAM. Advisor series returns/value add as of August 31, Fund inception August 12, Quartiles based on global neutral balanced fund category. 2 For Advisor Use Only

3 Dividend investing expertise 28% Canadian Income Equities 18% U.S. Income Equities Vice President & Senior Portfolio Manager Canadian Equities Vice President & Senior Portfolio Manager U.S. Equities RBC Canadian Equity Income Fund RBC Monthly Income Fund Over 20 years of experience in the investment industry. RBC Canadian Equity Income Fund won the 3-and 5-year Lipper Awards in 2013 for Best Canadian Dividend and Income Equity Fund. RBC U.S. Monthly Income Fund RBC U.S. Dividend Fund Over 15 years of experience in the investment industry. Member of the U.S. Equity Committee and responsible for income-oriented U.S. equity mandates. RBC U.S. Dividend Fund has the lowest volatility in its category over 10 years. 9% Emerging Markets Income Equities 5% European Income Equities Deputy Head, Global Emerging Markets RBC Global Asset Management (UK) Limited Chief Investment Officer & Senior Portfolio Manager RBC Global Asset Management (UK) Limited 15 years of experience in the investment industry. Lead manager of RBC Emerging Markets Dividend Fund. Prior to joining RBC GAM-UK in 2013, Laurence headed Aviva Investors Emerging Markets team, where she was responsible for managing global emerging markets income funds and developing quantitative stock selection and analysis models. RBC European Equity Fund RBC International Equity Fund 23 years of experience in the investment industry. Lead Manager of RBC European Dividend Fund and RBC European Equity Fund, and co-manager of RBC International Equity Fund. A portfolio manager since 1993, Dominic has been with RBC GAM-UK since 2007 and heads the firm s equity team as Chief Investment Officer. Performance and Rank Source: Paltrak, as of August 31, For Advisor Use Only

4 Award-winning fixed income expertise PH&N Fixed Income Team: 2012 Morningstar Fixed Income Manager of the Year PH&N Funds: Lipper s Best Bond Funds Group for the past seven years 15% Canadian Investment Grade 2013 Lipper Canada Awards: Best Global Fixed Fund 3 Years RBC Global Corporate Bond Fund Best High Yield Fixed Income Fund 3 & 5 Years RBC Global High Yield Bond Fund 10% Global Corporate 7.5% High Yield & Emerging Markets 2014 Investment Excellence Award European Fixed Income Manager Emerging Markets Manager of the Year 2012 U.K. Pension Awards Best Global Convertible Bond Fund 3 Years* 2013 Europe, Spain, Germany and Austria Lipper Awards 7.5% Global High Yield Emerging Markets Global Convertibles *Fund awarded was BlueBay Global Convertible Bond Fund (U.K.) which is not available to Canadian investors 4 For Advisor Use Only

5 RBC Balanced Growth & Income Fund Top Down Overlay Investment Strategy & Policy Committees Assess economy and investment environment Provide a global top-down view that is comprehensive and transparent Develop specific guidelines that can be used to manage portfolios Consistent Asset Mix Approach In Our Solutions Sarah Riopelle, CFA Vice President and Senior Portfolio Manager, Investment Solutions 5 For Advisor Use Only

6 Tactical asset mix Our process 6 For Advisor Use Only

7 Tactical asset mix Our track record Value Added from Tactical Asset Mix Calls Asset Mix Classes Wins Losses March 2003 July % 33% March 2003 February % 38% March 2009 July % 27% Value Added Since Market Bottom +32 bps -23 bps March 2009 July 2014 (Average Win/Loss) +68 bps Weighted Annualized Return From Asset Mix 7 For Advisor Use Only

8 Current asset mix We remain overweight equities and underweight fixed income. Asset Class Neutral (%) Current (%) Cash Fixed Income Equities Equity Breakdown Canada U.S Europe Emerging Markets Total Equities For Advisor Use Only

9 Adding exposure to europe Asset Class Old Neutral (%) New Neutral (%) Cash Fixed Income Equities Equity Breakdown Canada U.S Europe Emerging Markets Total Equities For Advisor Use Only

10 New asset mix RBC Balanced Growth & Income Fund Target Asset Mix 10 For Advisor Use Only

11 Currency hedging No hedging at the top fund level. Establish currency hedging policy that is appropriate for underlying funds. Low-volatility assets are entirely hedged (e.g. fixed income). High-volatility assets have lower hedge ratios (e.g. equities). Tactical hedging strategy used when we see opportunities to generate alpha. 11 For Advisor Use Only

12 Positioned for strength going forward Multi-asset global income Global credit complements the core strength of PH&N Total Return Bond Fund. Global credit added significant value in last year s volatile rate environment. In the event of rising rates, meaningful exposure to global credit should allow the Fund to continue to outperform. In a low-rate environment, global credit provides an income boost and a broader opportunity set. Fixed income characteristics Gross Yield to Maturity 3.85% Duration 6.4 years Fixed income fund allocation PH&N Total Return Bond Fund 12.8% RBC Global Corporate Bond Fund 8.5% RBC Global High Yield Bond Fund 6.4% BlueBay Global Convertible Bond Fund 6.4% Credit quality AAA/AA/A 40.1% BBB 24.8% BB 12.9% B 11.8% Below B 2.1% Unrated/Other 0.6% Cash/Short-Term 7.7% Data as of August 31, For Advisor Use Only

13 Positioned for strength going forward Global Dividend Income Global income exposure, with North American equities at the core. Newly added European exposure provides additional growth potential, yield pick-up and diversification. Continued exposure to EM dividend-payers should help drive income growth and capital appreciation. Portfolio Characteristics Yield 3.3 % P/E Ratio 14.9 P/B 2.9 Avg. Market Cap ($billions) 31.0 Geographic Allocation Canadian Equity 28.5% U.S. Equity 20.1% EM Equity 9.5% European Equity 5.9% Sector Weights Energy 18.3 % Materials 6.5 % Industrials 9.8 % Consumer Discretionary 7.7 % Consumer Staples 5.9 % Financials 24.4 % Healthcare 8.0 % Telecom 3.8 % Technology 9.1 % Utilities 6.4 % Data as of August 31, For Advisor Use Only

14 RBC Balanced Growth & Income Fund Canadian equity portion Canadian Sleeve S&P/TSX Composite Canada Canada Portion Portion Benchmark Difference Discretionary 5.4% 5.2% 5.5% 0.2% -0.1% Staples 1.2% 3.2% 3.1% 2.8% 0.1% -1.6% Energy 27.1% 33.2% 24.2% 26.1% 9.0% 1.0% Financials 32.2% 24.4% 33.9% 34.5% -9.5% -2.3% Health Care 0.6% 0.0% 3.6% 2.6% -3.6% -2.0% Industrials 10.9% 8.8% 7.8% 8.1% 1.0% 2.7% Materials 8.6% 9.2% 13.9% 12.3% -4.7% -3.7% Technology 0.4% 0.2% 1.7% 1.8% -1.5% -1.4% Telecom 4.0% 2.6% 4.8% 4.4% -2.2% -0.4% Utilities 9.5% 6.8% 1.8% 1.9% 5.0% 7.7% Data as of August 31, For Advisor Use Only

15 RBC Balanced Growth & Income Fund U.S. equity portion U.S Sleeve S&P 500 US US Portion Benchmark Difference Discretionary 10.3% 12.4% -2.0% Staples 6.8% 9.5% -2.7% Energy 6.3% 10.1% -3.8% Financials 15.7% 16.0% -0.2% Health Care 16.4% 13.7% 2.6% Industrials 14.9% 10.7% 4.2% Materials 3.1% 3.5% -0.5% Technology 16.7% 18.9% -2.2% Telecom 1.3% 2.2% -1.0% Utilities 3.4% 3.0% 0.3% 10.2% 11.9% -1.7% 12.4% 9.4% 3.0% 10.5% 10.5% 0.1% 12.5% 16.1% -3.6% 18.3% 13.5% 4.8% 10.5% 10.3% 0.2% 2.7% 3.5% -0.9% 18.2% 19.3% -1.2% 1.9% 2.4% -0.5% 2.8% 3.0% -0.1% Data as of August 31, For Advisor Use Only

16 RBC Balanced Growth & Income Fund North America Blended North American Sleeve Blended Benchmark NA NA Blend Benchmark Difference Difference Discretionary 7.4% 8.1% -0.7% Staples 4.6% 5.7% -1.0% Energy 22.4% 18.5% 3.9% Financials 21.0% 26.7% -5.8% Health Care 6.5% 7.7% -1.1% Industrials 11.2% 9.0% 2.3% Materials 6.8% 9.8% -3.0% Technology 6.8% 8.6% -1.8% Telecom 2.1% 3.8% -1.7% Utilities 5.4% 2.3% 3.1% 7.8% 8.7% -0.9% 6.8% 6.1% 0.7% 18.8% 18.3% 0.5% 22.3% 25.3% -3.0% 9.5% 8.1% 1.4% 10.7% 9.2% 1.5% 5.6% 7.9% -2.3% 9.3% 10.6% -1.3% 3.0% 3.4% -0.4% 6.2% 2.4% 3.8% Data as of August 31, For Advisor Use Only

17 A wide range of options MERs, Trailers & Fund Codes Series Fund Code Management Fee (%) Trailer (%) MER (%) A RBF Advisor ISC RBF Advisor LL RBF Advisor DSC RBF H (HNW) RBF F RBF I (HNW) RBF T5 RBF Advisor T5 ISC RBF Advisor T5 LL RBF Advisor T5 DSC RBF FT5 RBF Distributions: T5 Monthly, reset annually, all other series will distribute net income quarterly 17 For Advisor Use Only

18 DISCLOSURE This information has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. RBC GAM takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when printed. Due to the possibility of human and mechanical error as well as other factors, including but not limited to technical or other inaccuracies or typographical errors or omissions, RBC GAM is not responsible for any errors or omissions contained herein. RBC GAM reserves the right at any time and without notice to change, amend or cease publication of the information. Any investment and economic outlook information contained in this report has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions. This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words may, could, should, would, suspect, outlook, believe, plan, anticipate, estimate, expect, intend, forecast, objective and similar expressions are intended to identify forward-looking statements. Forwardlooking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events. The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors. / Trademark(s) of Royal Bank of Canada. Used under licence. RBC Global Asset Management Inc

19 Attention: A French quiz will pop up shortly for Quebec advisors requiring CE Credits from the Chambre de la Sécurité Financière. Un court questionnaire s affichera pour les conseillers du Québec qui ont besoin de crédits de formation continue de la Chambre de la Sécurité Financière. 19