MANAGEMENT S RESPONSIBILITY FOR FINANCIAL REPORTING

Transcription

1 MANAGEMENT S RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying financial statements have been prepared by RBC Global Asset Management Inc. ( RBC GAM ) as manager of the RBC GAM Investment Funds (the Funds ) and approved by the Board of Directors of RBC GAM. We are responsible for the information contained within the financial statements. We have maintained appropriate procedures and controls to ensure that timely and reliable financial information is produced. The financial statements have been prepared in compliance with International Financial Reporting Standards ( IFRS ) (and they include certain amounts that are based on estimates and judgments). The significant accounting policies, which we believe are appropriate for the Funds, are described in Note 3 to the financial statements. PricewaterhouseCoopers LLP, Chartered Professional Accountants, Licensed Public Accountants, have performed an independent audit of the financial statements in accordance with IFRS. Their report is set out on the next page. Damon G. Williams, FSA, FCIA, CFA Chief Executive Officer RBC Global Asset Management Inc. Heidi Johnston, CPA, CA Chief Financial Officer RBC GAM Funds March 11, 2019

2 INDEPENDENT AUDITOR S REPORT To the Unitholders and Trustee of RBC FUNDS & RBC PRIVATE POOLS RBC Canadian T-Bill Fund RBC Canadian Money Market Fund RBC Premium Money Market Fund RBC $U.S. Money Market Fund RBC Premium $U.S. Money Market Fund RBC Canadian Short-Term Income Fund RBC $U.S. Short-Term Corporate Bond Fund RBC Monthly Income Bond Fund RBC Canadian Bond Index Fund RBC Canadian Government Bond Index Fund RBC Bond Fund RBC Vision Bond Fund RBC Global Bond Fund RBC Global Bond & Currency Fund RBC $U.S. Investment Grade Corporate Bond Fund RBC Global Corporate Bond Fund RBC High Yield Bond Fund RBC $U.S. High Yield Bond Fund RBC Global High Yield Bond Fund RBC Strategic Income Bond Fund RBC $U.S. Strategic Income Bond Fund RBC Emerging Markets Foreign Exchange Fund RBC Emerging Markets Bond Fund RBC Emerging Markets Bond Fund (CAD Hedged) BlueBay Global Monthly Income Bond Fund BlueBay Global Sovereign Bond Fund (Canada) BlueBay Global Investment Grade Corporate Bond Fund (Canada) BlueBay European High Yield Bond Fund (Canada) BlueBay Emerging Markets Bond Fund (Canada) BlueBay Emerging Markets Local Currency Bond Fund (Canada) BlueBay Emerging Markets Corporate Bond Fund BlueBay Global Convertible Bond Fund (Canada) BlueBay $U.S. Global Convertible Bond Fund (Canada) RBC Conservative Bond Pool RBC Core Bond Pool RBC Core Plus Bond Pool RBC Managed Payout Solution RBC Managed Payout Solution Enhanced RBC Managed Payout Solution Enhanced Plus RBC Monthly Income Fund RBC U.S. Monthly Income Fund RBC Balanced Fund RBC Global Balanced Fund RBC Vision Balanced Fund RBC Conservative Growth & Income Fund RBC Balanced Growth & Income Fund RBC Global Growth & Income Fund RBC Retirement Income Solution RBC Retirement 2020 Portfolio RBC Retirement 2025 Portfolio RBC Retirement 2030 Portfolio RBC Retirement 2035 Portfolio RBC Retirement 2040 Portfolio RBC Retirement 2045 Portfolio RBC Retirement 2050 Portfolio RBC Select Very Conservative Portfolio RBC Select Conservative Portfolio RBC Select Balanced Portfolio RBC Select Growth Portfolio RBC Select Aggressive Growth Portfolio RBC Select Choices Conservative Portfolio RBC Select Choices Balanced Portfolio RBC Select Choices Growth Portfolio RBC Select Choices Aggressive Growth Portfolio RBC Target 2020 Education Fund RBC Target 2025 Education Fund RBC Target 2030 Education Fund RBC Target 2035 Education Fund RBC Canadian Dividend Fund RBC Canadian Equity Fund RBC QUBE Canadian Equity Fund RBC QUBE Low Volatility Canadian Equity Fund RBC Trend Canadian Equity Fund RBC Vision Canadian Equity Fund RBC Canadian Index Fund RBC O Shaughnessy Canadian Equity Fund RBC O Shaughnessy All-Canadian Equity Fund RBC Canadian Equity Income Fund RBC Canadian Small & Mid-Cap Resources Fund RBC North American Value Fund RBC North American Growth Fund RBC U.S. Dividend Fund RBC U.S. Dividend Currency Neutral Fund RBC U.S. Equity Fund RBC U.S. Equity Currency Neutral Fund RBC QUBE U.S. Equity Fund RBC QUBE Low Volatility U.S. Equity Fund RBC QUBE Low Volatility U.S. Equity Currency Neutral Fund RBC U.S. Equity Value Fund RBC U.S. Index Fund RBC U.S. Index Currency Neutral Fund RBC O Shaughnessy U.S. Value Fund (Unhedged) RBC O Shaughnessy U.S. Value Fund RBC U.S. Mid-Cap Growth Equity Fund RBC U.S. Mid-Cap Growth Equity Currency Neutral Fund RBC U.S. Mid-Cap Value Equity Fund RBC U.S. Small-Cap Core Equity Fund RBC U.S. Small-Cap Value Equity Fund RBC O Shaughnessy U.S. Growth Fund RBC O Shaughnessy U.S. Growth Fund II RBC Life Science and Technology Fund RBC International Dividend Growth Fund RBC International Equity Fund RBC International Equity Currency Neutral Fund RBC International Index Currency Neutral Fund RBC O Shaughnessy International Equity Fund RBC European Dividend Fund RBC European Equity Fund RBC European Mid-Cap Equity Fund RBC Asian Equity Fund RBC Asia Pacific ex-japan Equity Fund RBC Japanese Equity Fund RBC Emerging Markets Multi-Strategy Equity Fund RBC Emerging Markets Dividend Fund RBC Emerging Markets Equity Fund RBC Emerging Markets Small-Cap Equity Fund RBC Global Dividend Growth Fund RBC Global Dividend Growth Currency Neutral Fund RBC Global Equity Fund RBC Global Equity Focus Fund RBC Global Equity Focus Currency Neutral Fund RBC QUBE Global Equity Fund RBC QUBE Low Volatility Global Equity Fund RBC QUBE Low Volatility Global Equity Currency Neutral Fund RBC Vision Global Equity Fund RBC Vision Fossil Fuel Free Global Equity Fund RBC O Shaughnessy Global Equity Fund RBC QUBE All Country World Equity Fund RBC QUBE Low Volatility All Country World Equity Fund RBC Global Energy Fund RBC Global Precious Metals Fund RBC Global Resources Fund RBC Global Technology Fund RBC Private Short-Term Income Pool RBC Private Canadian Corporate Bond Pool RBC Private Income Pool RBC Private Canadian Dividend Pool RBC Private Canadian Growth and Income Equity Pool (renamed RBC Private Fundamental Canadian Equity Pool) RBC Private Canadian Equity Pool RBC Private Canadian Growth Equity Pool RBC Private Canadian Mid-Cap Equity Pool RBC Private U.S. Large-Cap Value Equity Pool RBC Private U.S. Large-Cap Value Equity Currency Neutral Pool RBC Private U.S. Growth Equity Pool RBC Private U.S. Large-Cap Core Equity Pool RBC Private U.S. Large-Cap Core Equity Currency Neutral Pool RBC Private U.S. Small-Cap Equity Pool RBC Private EAFE Equity Pool RBC Private Overseas Equity Pool RBC Private World Equity Pool PHILLIPS, HAGER & NORTH INVESTMENT FUNDS Phillips, Hager & North Canadian Money Market Fund Phillips, Hager & North $U.S. Money Market Fund Phillips, Hager & North Short Term Bond & Mortgage Fund Phillips, Hager & North Bond Fund Phillips, Hager & North Total Return Bond Fund Phillips, Hager & North Inflation-Linked Bond Fund Phillips, Hager & North High Yield Bond Fund Phillips, Hager & North Long Inflation-linked Bond Fund Phillips, Hager & North Monthly Income Fund Phillips, Hager & North Balanced Fund Phillips, Hager & North Dividend Income Fund Phillips, Hager & North Canadian Equity Fund Phillips, Hager & North Canadian Equity Value Fund Phillips, Hager & North Canadian Equity Underlying Fund Phillips, Hager & North Canadian Equity Underlying Fund II Phillips, Hager & North Canadian Growth Fund Phillips, Hager & North Canadian Income Fund Phillips, Hager & North Vintage Fund Phillips, Hager & North U.S. Dividend Income Fund Phillips, Hager & North U.S. Multi-Style All-Cap Equity Fund Phillips, Hager & North U.S. Equity Fund Phillips, Hager & North Currency-Hedged U.S. Equity Fund Phillips, Hager & North U.S. Growth Fund Phillips, Hager & North Overseas Equity Fund Phillips, Hager & North Currency-Hedged Overseas Equity Fund Phillips, Hager & North Global Equity Fund Phillips, Hager & North LifeTime 2015 Fund Phillips, Hager & North LifeTime 2020 Fund Phillips, Hager & North LifeTime 2025 Fund Phillips, Hager & North LifeTime 2030 Fund Phillips, Hager & North LifeTime 2035 Fund Phillips, Hager & North LifeTime 2040 Fund Phillips, Hager & North LifeTime 2045 Fund Phillips, Hager & North LifeTime 2050 Fund Phillips, Hager & North LifeTime 2055 Fund Phillips, Hager & North Balanced Pension Trust Phillips, Hager & North Conservative Equity Income Fund Phillips, Hager & North Canadian Equity Pension Trust Phillips, Hager & North Small Float Fund Phillips, Hager & North Canadian Equity Plus Pension Trust (collectively, the Funds, individually the Fund )

3 INDEPENDENT AUDITOR S REPORT Our opinion In our opinion, the accompanying annual financial statements of each of the Funds present fairly, in all material respects, the financial position of each Fund, its financial performance and its cash flows as at and for the periods indicated in note 2 in accordance with International Financial Reporting Standards ( IFRS ). What we have audited The financial statements of each of the Funds comprise: the statements of financial position as at the period-end dates indicated in note 2; the statements of comprehensive income for the periods indicated in note 2; the statements of cash flow for the periods indicated in note 2; the statements of changes in net assets attributable to holders of redeemable units ( NAV ) for the periods indicated in note 2; and the notes to the financial statements, which include a summary of significant accounting policies. Basis for opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of each of the Funds in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. Other information Management is responsible for the other information of each of the Funds. The other information comprises the 2018 Annual Management Report of Fund Performance of each of the Funds. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of each of the Funds, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements of each of the Funds or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and those charged with governance for the financial statements Management is responsible for the preparation and fair presentation of the financial statements of each of the Funds in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the ability of each of the Funds to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate any of the Funds or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the financial reporting process of each of the Funds.

4 INDEPENDENT AUDITOR S REPORT Auditor s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole for each Fund are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements of each of the Funds. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements of each of the Funds, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of each of the Funds. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of each of the Funds to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements of each of the Funds or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause any of the Funds to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements of each of the Funds, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Chartered Professional Accountants, Licensed Public Accountants Toronto, Ontario March 11, 2019

5 2018 ANNUAL FINANCIAL STATEMENTS SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) Fair % of Net Holdings Security Cost Value Assets PREFERRED EQUITIES Bank of Montreal, Preferred Series 27, 4.000% $ $ Bank of Montreal, Preferred Series 29, 3.900% Bank of Montreal, Preferred Series 31, 3.800% Bank of Montreal, Preferred Series 38, 4.850% Bank of Montreal, Preferred Series 40, 4.500% Bank of Montreal, Preferred Series 42, 4.400% Bank of Nova Scotia, Preferred Series 36, 5.500% Brookfield Asset Management Inc., Preferred Series 2, 2.100% Brookfield Asset Management Inc., Preferred Series 26, 4.500% Brookfield Asset Management Inc., Preferred Series 32, 4.500% Brookfield Asset Management Inc., Preferred Series 37, 4.900% Brookfield Asset Management Inc., Preferred Series 40, 4.500% Brookfield Asset Management Inc., Preferred Series 42, 4.500% Brookfield Asset Management Inc., Preferred Series 46, 4.800% Brookfield Asset Management Inc., Preferred Series 48, 4.750% Canadian Imperial Bank of Commerce, Preferred Series 47, 4.500% Canadian Utilities Ltd., Preferred Series CC, 4.500% Canadian Utilities Ltd., Preferred Series DD, 4.500% Canadian Utilities Ltd., Preferred Series FF, 4.500% CU Inc., Preferred Series 4, 3.800% Enbridge Inc., Preferred Series 3, 4.000% Enbridge Inc., Preferred Series 11, 4.400% Enbridge Inc., Preferred Series 17, 5.150% Enbridge Inc., Preferred Series 19, 4.900% Enbridge Inc., Preferred Series B, 4.000% Enbridge Inc., Preferred Series D, 4.000% Enbridge Inc., Preferred Series F, 4.000% The accompanying notes are an integral part of the financial statements. Fair % of Net Holdings Security Cost Value Assets PREFERRED EQUITIES (cont.) Enbridge Inc., Preferred Series H, 4.000% $ $ Enbridge Inc., Preferred Series P, 4.000% Enbridge Inc., Preferred Series R, 4.000% Fortis Inc., Preferred Series J, 4.750% Fortis Inc., Preferred Series M, 4.100% Great-West Lifeco Inc., Preferred Series G, 5.200% Great-West Lifeco Inc., Preferred Series M, 5.800% Great-West Lifeco Inc., Preferred Series N, 3.650% Great-West Lifeco Inc., Preferred Series P, 5.400% Great-West Lifeco Inc., Preferred Series Q, 5.150% Great-West Lifeco Inc., Preferred Series S, 5.250% Great-West Lifeco Inc., Preferred Series T, 5.150% Manulife Financial Corporation, Preferred Series 1-7, 4.600% Manulife Financial Corporation, Preferred Series 5, 4.400% Manulife Financial Corporation, Preferred Series 9, 4.400% Manulife Financial Corporation, Preferred Series 19, 3.800% Manulife Financial Corporation, Preferred Series 21, 5.600% Manulife Financial Corporation, Preferred Series 23, 4.850% Power Financial Corp., Preferred Series T, 4.200% Royal Bank of Canada, Preferred Series AC, 4.600%* Royal Bank of Canada, Preferred Series BD, 3.600%* Royal Bank of Canada, Preferred Series BF, 3.600%* Sun Life Financial Inc., Preferred Series 3, 4.450% Toronto-Dominion Bank, Preferred Series 3, 3.800% Toronto-Dominion Bank, Preferred Series 5, 3.750% Toronto-Dominion Bank, Preferred Series 7, 3.600% Toronto-Dominion Bank, Preferred Series 12, 5.500%

6 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) Fair % of Net Holdings Security Cost Value Assets PREFERRED EQUITIES (cont.) Toronto-Dominion Bank, Preferred Series 14, 4.850% $ $ TransCanada Corp., Preferred Series 3, 4.000% TransCanada Corp., Preferred Series 5, 4.400% TransCanada Corp., Preferred Series 11, 3.800% TransCanada Corp., Preferred Series 13, 5.500% Westcoast Energy Inc., Preferred Series 10, 5.250% Westcoast Energy Inc., Preferred Series 12, 5.200% TOTAL PREFERRED EQUITIES COMMON EQUITIES Communication Services Quebecor Inc., Class B Rogers Communications Inc., Class B Shaw Communications Inc., Class B TELUS Corp Consumer Discretionary Dollarama Inc Gildan Activewear Inc., Class A Restaurant Brands International Inc Consumer Staples Alimentation Couche-Tard Inc Energy ARC Resources Ltd Canadian Natural Resources Ltd Cenovus Energy Inc Enbridge Inc Keyera Corp Pembina Pipeline Corp PrairieSky Royalty Ltd Suncor Energy Inc Tourmaline Oil Corp TransCanada Corp Whitecap Resources Inc Financials Bank of Montreal Bank of Nova Scotia Brookfield Asset Management Inc., Class A Canadian Imperial Bank of Commerce Element Fleet Management Corp Fairfax Financial Holdings Ltd Intact Financial Corp Fair % of Net Holdings Security Cost Value Assets Financials (cont.) Manulife Financial Corporation $ $ Royal Bank of Canada* Sun Life Financial Inc Toronto-Dominion Bank Industrials Canadian National Railway Co Canadian Pacific Railway Ltd Finning International Inc Ritchie Bros. Auctioneers Inc SNC-Lavalin Group Inc Stantec Inc Thomson Reuters Corp Waste Connections Inc Information Technology CGI Group Inc., Class A Constellation Software Inc Open Text Corp Materials Agnico Eagle Mines Ltd CCL Industries, Class B First Quantum Minerals Ltd Franco-Nevada Corp Kirkland Lake Gold Ltd Nutrien Ltd Real Estate Brookfield Property Partners LP Choice Properties Real Estate Investment Trust First Capital Realty Inc Utilities Brookfield Infrastructure Partners LP Fortis Inc TOTAL COMMON EQUITIES UNDERLYING FUNDS Phillips, Hager & North High Yield Bond Fund* RBC High Yield Bond Fund* TOTAL UNDERLYING FUNDS The accompanying notes are an integral part of the financial statements.

7 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets BONDS CANADIAN BONDS CORPORATE 376 Access Justice Durham Ltd Aug-2039 $ 413 $ Access Prairies Partnership Mar Aéroports de Montréal Apr Aéroports de Montréal Oct Aéroports de Montréal Sep Aéroports de Montréal Oct Aéroports de Montréal Sep Aéroports de Montréal Jun Aéroports de Montréal Apr Alberta Powerline LP Jun Alberta Powerline LP Sep Alectra Inc Jul Alliance Pipeline LP Dec Alliance Pipeline LP Jun Alliance Pipeline LP Dec Alliance Pipeline LP Dec Alliance Pipeline LP Dec AltaLink Investments LP Jun AltaLink Investments LP Mar AltaLink LP Sep Bank of Montreal Oct Bank of Montreal Mar Bank of Montreal Apr Bank of Montreal Jul Bank of Montreal Jun Bell Canada May Bell Canada Oct Bell Canada Oct Bell Canada Feb Bell Canada Sep Bow Centre Street LP Jun Bow Centre Street LP Jun Bow Centre Street LP Jun Bridging North America GP May Brookfield Asset Management Inc Apr Brookfield Asset Management Inc Mar Brookfield Infrastructure Finance ULC Oct Brookfield Renewable Energy Partners ULC Oct Bruce Power LP Jun Bruce Power LP Jun Bruce Power LP Jun Bruce Power LP Jun Cameco Corp Sep Cameco Corp Nov Cameco Corp Jun Canadian Imperial Bank of Commerce Jan Canadian Imperial Bank of Commerce Jul Canadian Utilities Ltd May Clover LP Jun Cominar Real Estate Investment Trust Jul Cominar Real Estate Investment Trust Dec CU Inc Apr CU Inc Mar CU Inc Nov CU Inc Oct The accompanying notes are an integral part of the financial statements.

8 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) The accompanying notes are an integral part of the financial statements. Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets CORPORATE (cont.) 541 Dufferin Wind Power Inc Nov-2033 $ 541 $ Ellisdon Infrastructure RIH General Partnership Oct Emera Inc Dec Enbridge Gas Distribution Inc Nov Enbridge Gas Distribution Inc Dec Enbridge Gas Distribution Inc Aug Enbridge Gas Distribution Inc Nov Enbridge Inc Feb Enbridge Inc Feb Enbridge Pipelines Inc Apr Enbridge Pipelines Inc Aug Enbridge Pipelines Inc Sep Enbridge Pipelines Inc Feb Enbridge Pipelines Inc Apr Enbridge Pipelines Inc Aug Enbridge Southern Lights LP Jun Enwave Energy Corp Dec Fair Hydro Trust May FortisBC Energy Inc May Fortis Inc Dec Grand Renewable Solar LP Jan Greater Toronto Airports Authority Dec Greater Toronto Airports Authority Jun Greater Toronto Airports Authority Feb Greater Toronto Airports Authority Jun Greater Toronto Airports Authority Jun Greater Toronto Airports Authority Dec H2O Power LP Nov Hospital Infrastructure Partners NOH Partnership Jan Hydro One Inc Apr Hydro One Inc Jun Hydro One Inc Feb Hydro One Inc Jun Hydro One Inc Jun Hydro One Inc Feb Hydro One Inc Jun Hydro One Inc Jan Hydro One Inc Jul Hydro One Inc Jun Hydro One Inc Jul Inter Pipeline Ltd Jul Kingston Solar LP Jul Loblaw Companies Ltd Jun Loblaw Companies Ltd Dec Lower Mattagami Energy LP May Maple Leaf Sports & Entertainment Ltd Jun Maritimes & Northeast Pipeline LP Nov Melancthon Wolfe Wind LP Dec Mosaic Transit Partners GP Feb Mosaic Transit Partners GP Feb Mountain View Partners GP Mar North Battleford Power LP Dec North West Redwater Partnership Jun North West Redwater Partnership Jun North West Redwater Partnership Jun North West Redwater Partnership Jun Northland Power Solar Finance One LP Jun Nouvelle Autoroute 30 Financement Inc Dec

9 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) The accompanying notes are an integral part of the financial statements. Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets CORPORATE (cont.) 750 Nouvelle Autoroute 30 Financement Inc Mar-2033 $ 750 $ Nova Scotia Power Inc May Ontario Power Generation Inc Oct Ottawa MacDonald-Cartier International Airport Authority May Plenary Health North Bay Finco Inc Mar PSS Generating Station LP Oct Ridley Grain Ltd Aug Rogers Communications Inc Sep Rogers Communications Inc Mar Royal Bank of Canada* Mar Royal Bank of Canada* Mar Royal Bank of Canada* Sep Royal Bank of Canada* May SEC LP and Arci Ltd Aug SGTP Highway Bypass LP Jan Sun Life Financial Inc May Teranet Holdings LP Dec Toronto-Dominion Bank Apr Toronto-Dominion Bank Mar Toronto-Dominion Bank Jun Toronto-Dominion Bank Mar TransAlta OCP LP Aug TransCanada PipeLines Ltd Jun TransCanada PipeLines Ltd Sep TransEd Partners GP Sep Union Gas Ltd Apr Vancouver Airport Authority Nov Vancouver Airport Authority Nov Vancouver Airport Fuel Facilities Corp Mar Westcoast Energy Inc Jan Westcoast Energy Inc Jul Westcoast Energy Inc Oct Westcoast Energy Inc Dec Westcoast Energy Inc Dec Winnipeg Airport Authority Inc Apr Winnipeg Airport Authority Inc Nov FEDERAL Canada Housing Trust No Jun Canada Housing Trust No Jun Canada Housing Trust No Dec Canada Housing Trust No Dec Canada Housing Trust No Mar Canada Housing Trust No Jun Canada Housing Trust No Dec Canada Housing Trust No Jun Canada Housing Trust No Jun Canada Housing Trust No Dec Canada Housing Trust No Sep Canada Housing Trust No Jun Canada Housing Trust No Mar Canada Housing Trust No Mar Canada Housing Trust No Dec Government of Canada Sep Government of Canada Mar Government of Canada May Government of Canada Feb

10 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) The accompanying notes are an integral part of the financial statements. Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets FEDERAL (cont.) Government of Canada Mar-2021 $ $ Government of Canada Jun Government of Canada Sep Government of Canada Mar Government of Canada Jun Government of Canada Jun Government of Canada Jun Government of Canada Jun Government of Canada Jun Government of Canada Jun Government of Canada Dec Government of Canada Dec Government of Canada Dec Government of Canada Dec Government of Canada Dec PROVINCIAL/MUNICIPAL 420 City of Montreal Sep City of Montreal Sep City of Montreal Sep City of Ottawa Jul City of Toronto Dec City of Toronto Jun First Nations Finance Authority Jun Hospital for Sick Children Dec Hospital for Sick Children Dec Ontario Electricity Financial Corp May Ontario Electricity Financial Corp Jun Ontario School Boards Financing Corp Jun Ontario School Boards Financing Corp Oct Ontario School Boards Financing Corp Jun OPB Finance Trust Feb OPB Finance Trust Jan Province of Alberta Jun Province of Alberta Jun Province of Alberta Dec Province of Alberta Dec Province of Alberta Dec Province of Manitoba Sep Province of Manitoba Sep Province of New Brunswick Jun Province of New Brunswick Jun Province of New Brunswick Jun Province of New Brunswick Aug Province of Newfoundland and Labrador Oct Province of Ontario Jun Province of Ontario Sep Province of Ontario Feb Province of Ontario Jun Province of Ontario Jun Province of Ontario Dec Province of Ontario Jun Province of Ontario Jun Province of Ontario Jun Province of Ontario Jun Province of Ontario Jun Province of Ontario Jun

11 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets PROVINCIAL/MUNICIPAL (cont.) Province of Ontario Jun-2039 $ $ Province of Ontario Jun Province of Ontario Jun Province of Ontario Dec Province of Ontario Jun Province of Ontario Jun Province of Quebec Dec Province of Quebec Jan Province of Quebec Apr Province of Quebec Sep Province of Quebec Sep Province of Quebec Oct Province of Quebec Dec Province of Quebec Dec Province of Saskatchewan Jun Province of Saskatchewan Sep Province of Saskatchewan Jun Province of Saskatchewan Dec Queen's University Nov Trillium Health Partners Volunteers Dec University of British Columbia Dec TOTAL CANADIAN BONDS UNITED KINGDOM BONDS 915 Heathrow Funding Ltd. CAD May National Grid Electricity Transmission Plc. CAD Nov TOTAL UNITED KINGDOM BONDS UNITED STATES BONDS Anheuser-Busch InBev Finance Inc. CAD May AT&T Inc. CAD Nov AT&T Inc. CAD Nov Merrill Lynch & Co. Inc. CAD May The Walt Disney Co. CAD Oct United Parcel Service Inc. CAD May United States Treasury May Wells Fargo & Co. CAD Mar TOTAL UNITED STATES BONDS TOTAL BONDS MORTGAGE-BACKED SECURITIES 31 Peoples Trust Oct TOTAL MORTGAGE-BACKED SECURITIES SHORT-TERM INVESTMENTS TOTAL INVESTMENTS UNREALIZED GAIN ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) 196 UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (341) TOTAL PORTFOLIO $ OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ The accompanying notes are an integral part of the financial statements.

12 SCHEDULE OF INVESTMENT PORTFOLIO (in $000s) SCHEDULE A Foreign Exchange Contracts Unrealized Contracts Maturity Date Gain Bought USD Sold CAD Feb-2019 $ 147 Bought USD Sold CAD Feb $ 196 Unrealized Contracts Maturity Date Loss Bought CAD Sold USD Feb-2019 $ (183) Bought CAD Sold USD Feb-2019 (158) $ (341) TOTAL FOREIGN EXCHANGE $ (145) All counterparties have a credit rating of at least A. * Investment in related party (see note 8 in the generic notes). Short-term investments, which may be made up of treasury bills, commercial paper, term deposits and discount notes, earn interest at rates ranging from 1.95% to 2.13% and mature between January 2, 2019 and January 7, The accompanying notes are an integral part of the financial statements.

13 FINANCIAL STATEMENTS Statements of Financial Position (in $000s except per unit amounts) (see note 2 in the generic notes) ASSETS Investments at fair value $ $ Cash Due from investment dealers Subscriptions receivable Unrealized gain on foreign exchange contracts Dividends receivable, interest accrued and other assets TOTAL ASSETS LIABILITIES Due to investment dealers Redemptions payable Unrealized loss on foreign exchange contracts Accounts payable and accrued expenses TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS ( NAV ) $ $ Investments at cost $ $ NAV SERIES A $ $ ADVISOR SERIES $ $ SERIES H $ $ SERIES D $ $ SERIES F $ $ SERIES I $ $ SERIES O $ $ NAV PER UNIT SERIES A $ 8.57 $ 9.62 ADVISOR SERIES $ 8.57 $ 9.63 SERIES H $ 8.68 $ 9.73 SERIES D $ 9.28 $ SERIES F $ 9.51 $ SERIES I $ 9.62 $ SERIES O $ $ Statements of Comprehensive Income (in $000s except per unit amounts) For the periods ended (see note 2 in the generic notes) INCOME (see note 3 in the generic notes) Dividends $ $ Interest for distribution purposes Income from investment trusts Derivative income Net realized gain (loss) on investments Change in unrealized gain (loss) on investments ( ) (17 162) TOTAL NET GAIN (LOSS) ON INVESTMENTS AND DERIVATIVES (80 926) Securities lending revenue (see note 7 in the generic notes) Net gain (loss) on foreign cash balances (37) (74) TOTAL OTHER INCOME (LOSS) TOTAL INCOME (LOSS) (80 780) EXPENSES (see notes Fund Specific Information) Management fees Administration fees Independent Review Committee costs 2 3 GST/HST Transaction costs TOTAL EXPENSES INCREASE (DECREASE) IN NAV $ ( ) $ INCREASE (DECREASE) IN NAV SERIES A $ (84 272) $ ADVISOR SERIES $ (3 596) $ SERIES H $ (2 366) $ SERIES D $ (6 654) $ SERIES F $ (10 896) $ SERIES I $ (319) $ 465 SERIES O $ (6 057) $ INCREASE (DECREASE) IN NAV PER UNIT SERIES A $ (0.56) $ 0.38 ADVISOR SERIES $ (0.56) $ 0.38 SERIES H $ (0.52) $ 0.40 SERIES D $ (0.53) $ 0.50 SERIES F $ (0.51) $ 0.54 SERIES I $ (0.45) $ 0.54 SERIES O $ (0.46) $ 0.65 The accompanying notes are an integral part of these financial statements.

14 FINANCIAL STATEMENTS Statements of Cash Flow (in $000s) For the periods ended (see note 2 in the generic notes) CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in NAV $ ( ) $ ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes (30) Non-cash distributions from underlying funds (10 381) (13 836) Net realized loss (gain) on investments (6 248) (73 450) Change in unrealized loss (gain) on investments (Increase) decrease in accrued receivables Increase (decrease) in accrued payables (708) (277) (Increase) decrease in margin accounts Cost of investments purchased ( ) ( ) Proceeds from sale and maturity of investments NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of redeemable units Cash paid on redemption of redeemable units ( ) ( ) Distributions paid to holders of redeemable units (13 058) (14 487) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ ( ) $ ( ) Net increase (decrease) in cash for the period (585) (1 178) Cash (bank overdraft), beginning of period CASH (BANK OVERDRAFT), END OF PERIOD $ $ Interest received (paid) $ $ Dividends received, net of withholding taxes $ $ The accompanying notes are an integral part of these financial statements.

15 FINANCIAL STATEMENTS Statements of Changes in NAV (in $000s) For the periods ended (see note 2 in the generic notes) Series A Advisor Series Series H Series D NAV AT BEGINNING OF PERIOD $ $ $ $ $ $ $ $ INCREASE (DECREASE) IN NAV (84 272) (3 596) (2 366) (6 654) Early redemption fees Proceeds from redeemable units issued Reinvestments of distributions to holders of redeemable units Redemption of redeemable units ( ) ( ) (15 157) (20 179) (12 670) (12 452) (26 304) (21 408) NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS ( ) ( ) (10 681) (13 212) (10 842) (9 915) (11 265) (13) Distributions from net income (25 372) (15 267) (1 077) (664) (776) (478) (2 284) (1 223) Distributions from net gains (8 822) (52 621) (374) (2 289) (270) (1 648) (794) (4 214) Distributions from capital (37 357) (17 356) (1 586) (755) (1 142) (543) (3 363) (1 390) TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (71 551) (85 244) (3 037) (3 708) (2 188) (2 669) (6 441) (6 827) NET INCREASE (DECREASE) IN NAV ( ) ( ) (17 314) (13 985) (15 396) (10 384) (24 360) (256) NAV AT END OF PERIOD $ $ $ $ $ $ $ $ For the periods ended (see note 2 in the generic notes) Series F Series I Series O Total NAV AT BEGINNING OF PERIOD $ $ $ $ $ $ $ $ INCREASE (DECREASE) IN NAV (10 896) (319) 465 (6 057) ( ) Early redemption fees Proceeds from redeemable units issued Reinvestments of distributions to holders of redeemable units Redemption of redeemable units (52 367) (32 647) (3 022) (2 404) (39 501) (28 466) ( ) ( ) NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (2 609) (1 092) (21 850) (11 208) ( ) ( ) Distributions from net income (4 045) (1 467) (131) (81) (2 600) (1 464) (36 285) (20 644) Distributions from net gains (1 406) (5 055) (45) (281) (904) (5 045) (12 615) (71 153) Distributions from capital (5 955) (1 667) (193) (93) (3 829) (1 664) (53 425) (23 468) TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (11 406) (8 189) (369) (455) (7 333) (8 173) ( ) ( ) NET INCREASE (DECREASE) IN NAV (3 297) (1 082) (35 240) (9 812) ( ) ( ) NAV AT END OF PERIOD $ $ $ $ $ $ $ $ The accompanying notes are an integral part of these financial statements.

16 NOTES TO FINANCIAL STATEMENTS FUND SPECIFIC INFORMATION Series H and Series I units have been capped and are no longer available for purchase by new investors effective June 30, Existing investors who hold Series H and Series I units of the Fund can continue to make additional investments into these series. General information (see note 1 in the generic notes) The investment objective of the Fund is to provide investors with monthly income that may consist of dividend income, interest income, realized capital gains and return of capital. Investors in the Fund will also have the potential for modest capital growth. Financial instrument risk and capital management (see note 5 in the generic notes) Credit risk (%) Credit-exposed securities, excluding short-term investments, comprise 43.0% (, %) of the NAV of the Fund. The table below summarizes the Fund s credit risk exposure grouped by credit ratings as at: Rating AAA AA A BBB BB B CCC Unrated Total Concentration risk (%) The table below summarizes the Fund s investment exposure (after consideration of derivative products, if any) as at: Investment mix Canadian Equities Bonds Preferred Equities Cash/Other Total Interest rate risk (%) Fixed-income and debt securities, excluding short-term investments, comprise 33.2% (, %) of the NAV of the Fund. The table below summarizes the Fund s exposure to interest rate risk by remaining term to maturity as at: Term to maturity Less than 1 year years years > 10 years Total As at, had prevailing interest rates risen or lowered by 1%, with all other factors kept constant, the Fund s NAV may have decreased or increased, respectively, by approximately 2.4% (, %). In practice, actual results could differ from this sensitivity analysis and the difference could be material. Other price risk (% impact on NAV) The table below shows the impact of a 1% change in the broad-based index (noted below) on the Fund s NAV, using a 36-month historical correlation of data of the Fund s return and the index, with all other factors kept constant, as at: S&P/TSX Capped Composite Total Return Index + or or Since historical correlation may not be representative of future correlation, actual results could differ from this sensitivity analysis and the difference could be material. Fair value hierarchy ($000s except % amounts) (see note 3 in the generic notes) The following is a summary of the inputs used as of and Level 1 Level 2 Level 3 Total Equities Underlying funds Fixed-income and debt securities Short-term investments Derivatives assets Derivatives liabilities (341) (341) Total financial instruments % of total portfolio Please see the generic notes at the back of the financial statements.