Global Equity Focus List

RBC Dominion Securities Inc. Global Equity Focus List September 4, 2018 Quarterly Report What s inside 3 Portfolio positions 4 Methodology Portfolio Advisory Group Equities Equity markets move higher in the face of escalating trade headwinds Over the past three months, global equity markets have moved higher on the back of strong economic data and robust corporate earnings. Companies are mostly delivering robust numbers on strong demand for products and services despite the headwinds of weaker international growth, trade disputes, and a stronger U.S. dollar. Economic indicators that we track are generally pointing to positive sentiment, though we temper our enthusiasm somewhat due to the flattening yield curve in the U.S. Another concern is the upcoming midterm elections in November. Should the U.S. House of Representatives or Senate switch to Democratic control, we believe markets could potentially sell off on fears that the Democrats may raise roadblocks to President Trump s pro-business/anti-regulatory agenda. Finally, tariffs and tensions between the U.S. and its major trading partners have so far only had a relatively modest impact on the global economy. Most U.S. manufacturers are shrugging off these fears given the strong global demand for their products. Sector weightings: Global Equity Focus List vs. benchmark* Global Equity Focus List Benchmark For an overview of the Portfolio, click here. Click here for authors contact information. All values in Canadian dollars and priced as of Aug. 31 2018, market close, unless otherwise noted. Produced: Aug. 31, 2018 15:08ET Disseminated: Sept. 4, 2018 07:00ET For required disclosures, see page 5. NOT FOR DISTRIBUTION IN THE U.S. Consumer Discr,6.7% Consumer Staples, 13.3% Energy, 13.3% Financials, 23.3% Health Care, 10.0% Industrials, 16.7% Information Tech, 10% Materials, 3.4% Real Estate, 0% Telecom Svrc, 3.3% Utilities, 0% Consumer Discr, 8.4% Consumer Staples, 4.7% Energy, 14.4% Financials, 26.2% Health Care, 6.2% Industrials, 10.1% Information Tech, 12.4% Materials, 8.0% Real Estate, 2.8% Telecom Srvc, 3.5% Utilities, 3.3% * Composition of the blended benchmark is 50% S&P/TSX Composite, 30% S&P 500, and 20% MSCI EAFE. Source - FactSet; data as of 8/27/18

2 Global Equity Focus List The Global Equity Focus List delivered strong absolute returns on the back of its allocation to Consumer Staples and the lack of precious metals exposure. The outlook for the Canadian economy remains constructive. Tight labour market conditions and record-low levels of unemployment underpin consumer spending. Business has been reasonably strong across the country; however, the tight labour market is starting to have an effect on business. The Canadian housing market continues to see a slowdown as higher interest rates and tighter lending standards curb the demand for mortgages. Higher interest rates have put more pressure on service payments, but wage growth is helping mitigate these effects for now. Turning to performance for the past quarter, the Global Equity Focus List delivered strong absolute returns on the back of its allocation to Consumer Staples and the lack of precious metals exposure relative to our blended benchmark. The Portfolio enjoyed robust gains from Amazon.com (AMZN), Alimentation Couche-Tard (ATD.B), Thermo Fisher Scientific (TMO), and Alphabet Inc. (GOOGL). The Global Equity Focus List delivered a total return of 8.3% during the Summer 2018 quarter relative to the 3.4% posted by the blended benchmark. At the present time we are making no changes to the Focus List.

3 Global Equity Focus List Pricing in the above table is determined by the ticker. Data for companies using Canadian tickers (designated by * ) are in Canadian dollars; data for companies with U.S. tickers are shown in U.S. dollars. Source - Bloomberg Price 52-wk Earnings per share P/E Dividend Market Symbol Company name 08/31/18 range 2017 2018E 2019E 2018E 2019E yield cap (B) Consumer *ATD.B Alimentation Couche-Tard $62.48 52-68 $2.60 $3.10 $3.42 20.2x 18.3x 0.64% $35.31 AMZN Amazon.com $2,012.71 932-2026 $10.11 $26.69 $36.76 75.4x 54.8x NA $981.68 BUD Anheuser-Busch InBev $93.23 92-127 $4.69 $5.45 $6.15 17.1x 15.2x 5.13% $188.25 COST Costco Wholesale Corp $233.13 154-234 $5.82 $6.99 $7.72 33.3x 30.2x 0.98% $102.24 KHC The Kraft Heinz Co. $58.27 54-83 $3.55 $3.71 $3.88 15.7x 15.0x 4.29% $71.04 *QSR Restaurant Brands International $74.85 68-88 $2.74 $3.51 $3.76 21.3x 19.9x 3.12% $35.00 Energy *CNQ Canadian Natural Resources $44.56 37-49 $1.19 $3.63 $3.84 12.3x 11.6x 3.01% $54.41 *PPL Pembina Pipeline $44.51 38-48 $1.73 $2.19 $2.54 20.4x 17.6x 5.12% $22.45 *SU Suncor Energy $53.72 39-55 $1.92 $3.25 $4.01 16.5x 13.4x 2.68% $87.70 *TRP TransCanada $55.58 50-65 $3.09 $3.39 $3.58 16.4x 15.5x 4.97% $49.52 Financials BRK.B Berkshire Hathaway Inc. Class B $208.72 173-218 $7.45 $9.55 $10.02 21.9x 20.8x NA $517.04 *BAM'A Brookfield Asset Management Inc $55.76 47-58 $6.06 $1.36 $2.41 41.1x 23.1x 1.40% $53.40 *IFC Intact Financial Corp $103.50 92-109 $5.60 $5.78 $7.71 17.9x 13.4x 2.71% $14.41 JPM JPMorgan Chase & Co $114.58 88-119 $6.93 $9.10 $9.88 12.6x 11.6x 1.96% $385.09 *RY Royal Bank Of Canada $103.66 90-109 NA NA NA NA NA 3.78% $149.27 *TD Toronto Dominion Bank $78.65 65-80 $5.54 $6.45 $6.92 12.2x 11.4x 3.40% $143.81 USB U.S. Bancorp $54.11 48-59 $3.42 $4.07 $4.36 13.3x 12.4x 2.22% $88.15 Health Care JNJ Johnson & Johnson $134.69 119-148 $7.30 $8.14 $8.63 16.5x 15.6x 2.67% $361.34 TMO Thermo Fisher Scientific $239.10 182-241 $9.49 $10.99 $12.23 21.8x 19.6x 0.28% $96.31 UNH UnitedHealth Group $268.46 186-270 $10.07 $12.59 $14.32 21.3x 18.8x 1.34% $258.39 Industrials MMM 3M Company $210.92 191-260 $9.17 $10.32 $11.20 20.4x 18.8x 2.58% $123.73 *CNR Canadian National Railway $116.06 91-118 $4.99 $5.46 $6.19 21.3x 18.7x 1.57% $85.37 *TIH Toromont Industries $65.24 44-68 $2.22 $3.04 $3.47 21.5x 18.8x 1.41% $5.30 RTN Raytheon $199.44 179-230 $7.53 $9.98 $11.59 20.0x 17.2x 1.74% $56.89 *WCN Waste Connections $103.57 80-105 $2.82 $3.25 $3.66 31.9x 28.3x 0.70% $27.29 Materials DWDP DowDuPont $70.13 61-77 $3.40 $4.19 $4.79 16.7x 14.7x 2.17% $161.82 Technology GOOGL Alphabet $1,231.80 925-1291 $43.00 $51.79 $57.55 23.8x 21.4x NA $851.85 MSFT Microsoft Corp $112.33 73-113 $3.88 $4.26 $4.89 26.3x 23.0x 1.50% $861.37 SAP SAP SE $119.74 99-123 $5.15 $5.09 $5.70 23.5x 21.0x 1.38% $147.10 Telecom *T Telus Corp $48.39 43-49 $2.63 $2.85 $3.06 17.0x 15.8x 4.34% $28.90 In all jurisdictions where RBC Capital Markets conducts business, we do not offer investment advice on Royal Bank of Canada. Certain regulations prohibit member firms from soliciting orders and offering investment advice or opinions on their own stock. References to Royal Bank are for informational purposes only and not intended as a direct or implied recommendation for investing in Royal Bank and all related securities.

4 Global Equity Focus List Methodology The Global Equity Focus List (the List) is a unique portfolio offering for Canadian investors. It provides exposure to some of the highest-quality companies across the globe, allowing greater flexibility to add exposure within sectors where the stand-alone Canadian market lacks adequate breadth or depth of investment opportunities. The model will be largely based on a bottom-up search for quality companies trading at attractive valuations, with considerable flexibility around sector allocations. This point is particularly important to help determine the suitability of this List for specific investors. We have chosen a quality- and value-oriented strategy focused on long-term absolute returns best-suited for patient investors who are not particularly concerned with short-term fluctuations relative to a benchmark. Because a value strategy should greatly benefit from a broader selection universe and a flexible approach to portfolio construction, we think it is a perfect fit for our global portfolio. That being said, we recognize that a thorough understanding of underlying macro conditions is a necessary component of any portfolio management framework, and are committed to ensuring that the companies we choose are well positioned in the current environment and diversified reasonably across sectors. The List will have 30 stocks that are assumed to be equally weighted positions. Typically half will be Canadian and half allocated among the U.S., Europe, and Asia. Each constituent must meet certain criteria to be eligible, including: (1) minimum fundamental research coverage ratings from RBC Capital Markets and/or our third-party research providers and (2) minimum liquidity requirements to ensure investors can easily buy and sell shares without having any significant impact on pricing. We expect turnover to remain low in typical market conditions, which reflects the nature of the companies included on the List (well-established, quality businesses with solid track records of creating value for shareholders). Changes will be communicated on a dynamic basis, while quarterly updates on the List will be published. The List is compiled, monitored, and updated by the Investment Committee that consists of members of the RBC Wealth Management Global Portfolio Advisory Group within Canada. NOTE: Past performance is no guarantee of future results and should not be viewed as an indicator of future results.

5 Global Equity Focus List Disclosures and disclaimers Global Equity Focus List Investment Committee Tasneem Azim-Khan, CFA, Portfolio Advisor tasneem.azim-khan@rbc.com; RBC Dominion Securities Inc. Tim Corney, CFA, Portfolio Advisor tim.corney@rbc.com; RBC Dominion Securities Inc. Patrick McAllister, CFA, Portfolio Advisor patrick.mcallister@rbc.com; RBC Dominion Securities Inc. Analyst Certification All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report. This report is issued by the Portfolio Advisory Group ( PAG ) which is part of the retail division of RBC Dominion Securities Inc. ( RBC DS ). The PAG provides portfolio advisory services to RBC DS Investment Advisors. Reports published by the PAG may be made available to clients of RBC DS through its Investment Advisors. The PAG relies on a number of different sources when preparing its reports including, without limitation, research reports published by RBC Capital Markets ( RBC CM ). RBC CM is not independent of RBC DS or the PAG. RBC CM is a business name used by Royal Bank of Canada and certain of its affiliates, including RBC DS, in connection with its corporate and investment banking activities. As a result of the relationship between RBC DS, the PAG and RBC CM, there may be conflicts of interest relating to the RBC CM analyst that is responsible for publishing research on a company referred to in a report issued by the PAG. Required Disclosures RBC Capital Markets Distribution of Ratings For purposes of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories Buy, Hold/Neutral, or Sell regardless of a firm s own rating categories. Although RBC Capital Markets ratings of Top Pick/Outperform, Sector Perform and Underperform most closely correspond to Buy, Hold/ Neutral and Sell, respectively, the meanings are not the same because our ratings are determined on a relative basis. Explanation of RBC Capital Markets, LLC Equity Rating System An analyst s sector is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to a particular stock represents solely the analyst s view of how that stock will perform over the next 12 months relative to the analyst s sector average. Distribution of Ratings - RBC Capital Markets, LLC Equity Research As of June 30, 2018 Investment Banking Services Provided During Past 12 Months Rating Count Percent Count Percent Buy [Top Pick & Outperform] 854 53.61 262 30.68 Hold [Sector Perform] 665 41.75 142 21.35 Sell [Underperform] 74 4.65 6 8.11 Ratings Top Pick (TP): Represents analyst s best idea in the sector; expected to provide significant absolute total return over 12 months with a favorable risk-reward ratio. Outperform (O): Expected to materially outperform sector average over 12 months. Sector Perform (SP): Returns expected to be in line with sector average over 12 months. Underperform (U): Returns expected to be materially below sector average over 12 months. Restricted (R): RBC policy precludes certain types of communications, including an investment recommendation, when RBC is acting as an advisor in certain merger or other strategic transactions and in certain other circumstances. Not Rated (NR): The rating, price targets and estimates have been removed due to applicable legal, regulatory or policy constraints which may include when RBC Capital Markets is acting in an advisory capacity involving the company. Risk Rating The Speculative risk rating reflects a security s lower level of financial or operating predictability, illiquid share trading volumes, high balance sheet leverage, or limited operating history that result in a higher expectation of financial and/ or stock price volatility. RBC Capital Markets has fundamental research of the following companies: 3M Company (MMM; Outperform; $210.92) Alimentation Couche-Tard (ATD.B; Outperform; $62.48) Alphabet Inc. Class A (GOOGL; Outperform; $1,231.80) Amazon.com, Inc. (AMZN; Outperform; $2012.71) Anheuser-Busch InBev SA (BUD; Sector Perform; $93.23) Brookfield Asset Management Inc. (BAM.A; Outperform; $55.76) Canadian National Railway Company (CNR; Outperform; $116.06) Canadian Natural Resources Limited (CNQ; Top Pick; $44.56) Costco Wholesale Corporation (COST; Outperform; $233.13)

6 Global Equity Focus List DowDuPont Inc. (DWDP; Top Pick; $70.13) Intact Financial Corp. (IFC; Outperform; $103.50) Johnson & Johnson (JNJ; Outperform; $134.69 ) JPMorgan Chase & Co. (JPM; Outperform; $114.58) The Kraft Heinz Company (KHC; Outperform; $58.27) Microsoft Corporation (MSFT; Outperform; $112.33) Pembina Pipeline Corporation (PPL; Outperform; $44.51) Restaurant Brands International Inc. (QSR; Outperform; $74.85) SAP SE (SAP; Sector Perform; $119.74) Suncor Energy Inc. (SU; Outperform; $53.72) TELUS Corporation (T; Outperform; $48.39) Toromont Industries Ltd. (TIH; Sector Perform, $65.24) Toronto-Dominion Bank (TD; Sector Perform; $78.65) TransCanada Corporation (TRP; Outperform; $55.58) U.S. Bancorp (USB; Outperform; $54.11) UnitedHealth Group Inc. (UNH; Outperform; $268.46) Waste Connections, Inc. (WCN; Outperform; $103.57) Our third-party research provider has fundamental research of: Berkshire Hathaway Inc. (BRK.B; Overweight; $208.72) Raytheon Company (RTN; Neutral; $199.44) Thermo Fisher Scientific Inc. (TMO; Overweight; $239.10) RBC Capital Markets analysts have received (or will receive) compensation based in part upon the investment banking revenues of RBC Capital Markets. Portfolio Advisory Group personnel, including the portfolio advisor or any individuals directly involved in the preparation of the report hold(s) or exercise(s) investment discretion over a long position in the common shares of 3M Company, Alimentation Couche-Tard Inc., Alphabet Inc., Amazon.com, Inc., Anheuser-Busch InBev SA/NV, Berkshire Hathaway Inc., Brookfield Asset Management Inc., Canadian National Railway Company, Canadian Natural Resources Limited, Costco Wholesale Corporation, DowDuPont Inc., Intact Financial Corporation, Johnson & Johnson, JPMorgan Chase & Co., Restaurant Brands International Inc., Suncor Energy Inc., TELUS Corporation, The Kraft Heinz Company, The Toronto-Dominion Bank, Thermo Fisher Scientific Inc, TransCanada Corporation, U.S. Bancorp, and Waste Connections, Inc. A household member or members of the Portfolio Advisory Group hold(s) or exercise(s) investment discretion over a long position in the common shares of Alimentation Couche-Tard Inc., Berkshire Hathaway Inc., Intact Financial Corp., The Kraft Heinz Company, and Toronto-Dominion Bank. RBC Capital Markets Conflicts Policy RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request. To access our current policy, clients should refer to https://www.rbccm.com/global/file-414164.pdf or send a request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time. Dissemination of Research & Short Term Ideas RBC Capital Markets endeavours to make all reasonable efforts to provide research simultaneously to all eligible clients, having regard to local time zones in overseas jurisdictions. Subject to any applicable regulatory considerations, eligible clients may include RBC Capital Markets institutional clients globally, the retail divisions of RBC Dominion Securities Inc. and RBC Capital Markets LLC, and affiliates. RBC Capital Markets equity research is posted to our proprietary websites to ensure eligible clients receive coverage initiations and changes in rating, targets and opinions in a timely manner. Additional distribution may be done by the sales personnel via email, fax or regular mail. Clients may also receive our research via third party vendors. Please contact your investment advisor or institutional salesperson for more information regarding RBC Capital Markets research. RBC Capital Markets also provides eligible clients with access to SPARC on its proprietary INSIGHT website. SPARC contains market color and commentary, and may also contain Short-Term Trade Ideas regarding the securities of subject companies discussed in this or other research reports. A Short-Term Trade Idea reflects the research analyst s directional view regarding the price of the security of a subject company in the coming days or weeks, based on market and trading events. A Short-Term Trade Idea may differ from the price targets and/or recommendations in our published research reports reflecting the research analyst s views of the longer-term (one year) prospects of the subject company, as a result of the differing time horizons, methodologies and/or other factors. Thus, it is possible that the security of a subject company that is considered a long-term Sector Perform or even an Underperform might be a short-term buying opportunity as a result of temporary selling pressure in the market; conversely, the security of a subject company that is rated a long-term Outperform could be considered susceptible to a short-term downward price correction. Short-Term Trade Ideas are not ratings, nor are they part of any ratings system, and RBC Capital Markets generally does not intend, nor undertakes any obligation, to maintain or update Short-Term Trade Ideas. Short-Term Trade Ideas discussed in SPARC may not be suitable for all investors and have not been tailored to individual investor circumstances and objectives, and investors should make their own independent decisions regarding any Short-Term Trade Ideas discussed therein. Conflict Disclosures In the event that this is a compendium report (covers six or more subject companies), RBC DS may choose to provide specific disclosures for the subject companies by reference.

7 Global Equity Focus List To access RBC CM s current disclosures of these companies, please go to https://www.rbccm.com/gldisclosure/ PublicWeb/DisclosureLookup.aspx?entityId=1. Such information is also available upon request to RBC Dominion Securities, Attention: Manager, Portfolio Advisory Group, 155 Wellington Street West, 17th Floor, Toronto, ON M5V 3K7. The authors are employed by RBC Dominion Securities Inc., a securities broker-dealer with principal offices located in Toronto, Canada. The Global Industry Classification Standard ( GICS ) was developed by and is the exclusive property and a service mark of MSCI Inc. ( MSCI ) and Standard & Poor s Financial Services LLC ( S&P ) and is licensed for use by RBC. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. References herein to LIBOR, LIBO Rate, L or other LIBOR abbreviations means the London interbank offered rate as administered by ICE Benchmark Administration (or any other person that takes over the administration of such rate). Disclaimer The information contained in this report has been compiled by RBC Dominion Securities Inc. ( RBC DS ) from sources believed by it to be reliable, but no representations or warranty, express or implied, are made by RBC DS or any other person as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute RBC DS judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Additionally, this report is not, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to Investment Advisors and does not have regard to the particular circumstances or needs of any specific person who may read it. RBC DS and its affiliates may have an investment banking or other relationship with some or all of the issuers mentioned herein and may trade in any of the securities mentioned herein either for their own account or the accounts of their customers. RBC DS and its affiliates may also issue options on securities mentioned herein and may trade in options issued by others. Accordingly, RBC DS or its affiliates may at any time have a long or short position in any such security or option thereon. Neither RBC DS nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. This report may not be reproduced, distributed or published by any recipient hereof for any purpose. In all jurisdictions where RBC Capital Markets conducts business, we do not offer investment advice on Royal Bank of Canada. Certain regulations prohibit member firms from soliciting orders and offering investment advice or opinions on their own stock. References to Royal Bank are for informational purposes only and not intended as a direct or implied recommendation for investing in Royal Bank and all related securities. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. Registered trademarks of Royal Bank of Canada. Used under licence. 2018 Royal Bank of Canada. All rights reserved.