Audited Financial Statements

RBC Guaranteed Investment Funds Audited Financial Statements December 31, 2016

RBC GUARANTEED INVESTMENT FUNDS Table of Contents December 31, 2016 Page Financial Statements and Supplementary Information Independent Auditor s Report 1 2 Individual Funds and Portfolios 3 64 Notes to the Financial Statements 65 73

April 18, 2017 Independent Auditor s Report To the contractholders of: RBC Canadian Money Market GIF RBC Canadian Short-Term Income GIF RBC Bond GIF RBC PH&N Total Return Bond GIF RBC Global Bond GIF RBC High Yield Bond GIF RBC Balanced GIF RBC PH&N Monthly Income GIF RBC Global Balanced GIF RBC Canadian Dividend GIF RBC Canadian Equity GIF RBC O'Shaughnessy All Canadian Equity GIF RBC PH&N Canadian Income GIF RBC Select Conservative GIP RBC Select Balanced GIP RBC North American Value GIF RBC North American Growth GIF RBC U.S. Dividend GIF RBC U.S. Equity GIF RBC O'Shaughnessy U.S. Value GIF RBC Global Dividend Growth GIF RBC O'Shaughnessy International Equity GIF RBC BlueBay Global Convertible Bond GIF RBC Balanced Growth and Income GIF RBC Global Equity GIF RBC Emerging Markets Dividend GIF RBC Conservative Growth and Income GIF RBC Select Growth GIP RBC Select Aggressive Growth GIP (collectively the Funds) We have audited the accompanying financial statements of each of the Funds, which comprise the statement of financial position as at December 31, 2016 and the statements of comprehensive income, changes in net assets attributable to contractholders and cash flow for the year ended December 31, 2016, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility 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 International Financial Reporting Standards, 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. Auditor s responsibility Our responsibility is to express an opinion on the financial statements of each of the Funds based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. PricewaterhouseCoopers LLP PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2 T: +1 416 863 1133, F: +1 416 365 8215 PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of each of the Funds present fairly, in all material respects, the financial position of each of the Funds as at December 31, 2016 and the financial performance and cash flow of each of the Funds for the year ended December 31, 2016 in accordance with International Financial Reporting Standards. Other matter The financial statements of each of the Funds as at and for the year ended December 31, 2015 were audited by another auditor who expressed an unmodified opinion on those statements on April 18, 2016. Chartered Professional Accountants, Licensed Public Accountants

RBC Canadian Money Market GIF Statement of Financial Position Statement of Cash Flow As at Dec 31, 2016 Dec 31, 2015 For the year ended December 31, 2016 2015 Assets Operating activities Cash $ - $ - Net income attributable to contractholders $ 44,202 $ 35,381 Investments in underlying fund at fair value 24,900,024 20,028,121 Add (deduct) to convert net income to Other assets a cash basis Accrued income distribution from underlying funds - 448 Net gains on investments - - Accounts receivable - contractholders - - Change in other assets 1,090 4,637 Accounts receivable - sale of investments - - Change in other liabilities (481) (7,244) Due from RBC Life Insurance Company 6,512 5,387 Purchases of investments (31,728,566) (25,297,826) Other 572 2,339 Proceeds from sales of investments 26,856,663 19,181,290 Liabilities 24,907,108 20,036,295 Cash provided by (used in) oeprating activities (4,827,092) (6,083,762) Financing activities Bank indebtedness $ 153,533 654 Distributions to the contractholders - - Other liabilities Proceeds from issue of units 40,825,870 28,291,173 Accrued expenses 25,335 25,816 Redemption of units (36,151,657) (22,214,988) Accounts payable - contractholders - - Cash provided by (used in) financing activities 4,674,213 6,076,185 Accounts payable - purchase of investments - - Decrease in cash (152,879) (7,577) Other - - Cash (Bank indebtedness) at beginning of period (654) 6,923 Net assets attributable to contractholders $ 24,728,240 $ 20,009,825 178,868 26,470 Bank indebtedness at end of period $ (153,533) $ (654) Net assets attributable to contractholders per unit For the year ended December 31, 2016 2015 Invest Series $ 10.06 $ 10.04 Management fees and insurance fees Series 1 11.18 11.16 Annual Management Fee Statement of Comprehensive Income Invest Series 0.53% 0.53% Series 1 1.00% 1.00% Annual Insurance Fee (Limit) Invest Series 0.10 (0.60) % 0.10 (0.60) % For the year ended December 31, 2016 2015 Series 1 0.10 (0.60) % 0.10 (0.60) % Income Distribution from underlying fund $ 199,539 $ 138,142 Realized gain on sale of investments - - Change in unrealized gain/loss of investments - - Sales and redemption of units 199,539 138,142 Invest Series Expenses Opening balance as at January 1st 342,017 8,880 Management fees 89,821 57,133 Purchases during the period 662,788 423,181 Insurance fees 24,061 15,850 Redemptions during the period (500,980) (90,044) Other administrative expenses 111,875 96,550 Closing balance as at December 31st 503,825 342,017 225,757 169,533 Series 1 Less: Expenses waived 70,420 66,772 Opening balance as at January 1st 1,485,538 1,240,658 Expenses after waiver 155,337 102,761 Purchases during the period 3,058,691 2,156,538 Net income attributable to contractholders $ 44,202 $ 35,381 Redemptions during the period (2,785,802) (1,911,658) Net income attributable to contractholders per unit Closing balance as at December 31st 1,758,427 1,485,538 Invest Series $ 0.02 $ 0.02 Series 1 0.02 0.03 Statement of Changes in Net Assets Attributable to Contractholders For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 20,009,825 $ 13,898,259 Investment in underlying fund at fair value Premium deposits 40,825,870 28,291,173 Level 1 $ 24,900,024 $ 20,028,121 Net income attributable to contractholders 44,202 35,381 60,879,897 42,224,813 Schedule of investment in underlying fund Withdrawals 36,151,657 22,214,988 RBC Canadian Money Market Fund, Series O Net assets, end of the period $ 24,728,240 $ 20,009,825 Number of units 2,490,002 2,002,812 Number of units outstanding Cost $ 24,900,024 $ 20,028,121 Invest Series 503,825 342,017 Percentage held in underlying fund 1.5715% 1.1558% Series 1 1,758,427 1,485,538 Fair value $ 24,900,024 $ 20,028,121 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 3 of 73

RBC Canadian Money Market GIF (continued) Top 25 holdings of the underlying fund (unaudited) Bank of Montreal 0.970% Mar 10 2017 3.3% Clarity Trust 0.921% Jan 16 2017 1.8% Merit Trus t - Senior Notes 1.000% Jan 5 2017 3.0% National Bank of Cana da 1.087% Mar 14 2017 1.7% Zeus Receivables Trust - Senior Notes 1.088% Jun 19 2017 2.3% Bank of Montreal 1.290% Jan 10 2017 1.7% Canadian Master Trust - Series A 1.000% Jan 5 2017 2.2% Fusion Trust 1.100% Jul 21 2017 1.6% Toronto-Dominion Bank 0.767% Jan 11 2017 2.2% Banner Trust 1.090% Jul 21 2017 1.6% Province of Nova Scotia 0.642% Mar 20 2017 2.2% Banner Trust 1.040% Apr 7 2017 1.5% Canadian Imperial Bank of Commerce 0.901% Feb 2 2017 2.0% Canadian Imperial Bank of Commerce 0.940% Jan 4 2017 1.4% Clarity Trust 1.040% May 30 2017 2.0% BNP Paribas Capital Trust 1.000% Jun 19 2017 1.4% Enbridge Pipelines Inc. 0.853% Jan 23 2017 2.0% Province of Ontario 0.591% Jan 11 2017 1.4% Canadian Imperial Bank of Commerce 1.290% Jan 9 2017 1.9% SAFE Trust - Series 1996-1 0.871% Jan 4 2017 1.3% Toronto-Dominion Bank 1.080% Ma r 1 2017 1.9% Fus ion Trust 0.881% Feb 1 2017 1.3% Toronto-Dominion Bank 0.901% Feb 2 2017 1.9% BNP Pariba s Capital Trust 0.831% Jan 11 2017 1.3% SAFE Trust - Series 1996-1 0.950% Feb 22 2017 1.8% 46.7% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 3 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series 4 Series 1 Net Asset Value attributable to contractholders $ 10.06 $ 10.04 $ 10.01 $ 11.18 $ 11.16 $ 11.13 $ 11.07 $ 10.99 Net assets attributable to contractholders ($ '000) $ 5,067 $ 3,433 $ 89 $ 19,661 $ 16,577 $ 13,809 $ 7,598 $ 7,764 Net Income ($ '000) $ 8 $ 2 $ - The comparative data for $ 36 $ 33 $ 48 $ 70 $ 64 Premium deposits ($ '000) $ 6,660 $ 4,245 $ 89 the year 2013 and prior $ 34,166 $ 24,046 $ 17,801 $ 11,363 $ 6,530 Withdrawals ($ '000) $ 5,034 $ 903 $ - not available as Invest $ 31,118 $ 21,312 $ 11,639 $ 11,599 $ 8,560 Number of units outstanding 503,825 342,017 8,880 Series was introduced in 1,758,427 1,485,538 1,240,658 686,254 706,682 Management expens e ratio 1 0.69% 0.69% 0.70% 2014. 0.70% 0.70% 0.71% 0.43% 0.42% Management expense before waiver 1.21% 1.32% 0.71% 0.97% 1.14% 1.31% 1.15% 1.32% Portfolio turnover rate of the underlying fund 2 - - - - - - - - 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the tradingcosts payable by the fund in the year, and the greater the chance ofan investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. 3 Financial highlights for the years 2015, 2014 and 2013 are based on IFRS and for the year 2012 is based on Canadian Generally Accepted Accounting Principles. 4 Invest series commenced operations on November 7, 2014. RBC GUARANTEED INVESTMENT FUNDS Page 4 of 73

RBC Canadian Short-Term Income GIF Statement of Financial Position Statement of Cash Flow As at Dec 31, 2016 Dec 31, 2015 For the year ended December 31, 2016 2015 Assets Operating activities Cas h $ 1,135 $ 226 Net income (loss) attributable to contractholders $ (48,432) $ 13,793 Inves tments in underlying fund at fair value 6,928,506 8,345,353 Add (deduct) to convert net i ncome to Other assets a cash basis Accrued income distribution from underlying funds - - Net losses on investments 90,419 44,434 Accounts receivable - contractholders 11,000 - Change in other assets 2,485 2,367 Accounts receivable - sale of investments - - Change in other liabilities (3,192) (2,427) Due from RBC Life Insurance Company 2,582 1,947 Purchases of investments (2,655,330) (6,186,960) Other 746 3,866 Proceeds from sales of investments 3,981,758 4,069,696 Liabilities 6,943,969 8,351,392 Cas h provided by (us ed in) oepra ting activities 1,367,708 (2,059,097) Financing activities Bank indebtedness - - Distributions to the contractholders - - Other liabilities Proceeds from issue of units 2,736,875 6,265,568 Accrued expenses 24,495 27,687 Redemption of units (4,103,674) (4,205,348) Accounts paya ble - contra ctholders - - Cas h provided by (us ed in) financing activiti es (1,366,799) 2,060,220 Accounts payable - purchase of investments - - Increase in cash 909 1,123 Other - - Cash (Bank indebtedness) at beginning of period 226 (897) Net assets attributable to contractholders $ 6,919,474 $ 8,323,705 24,495 27,687 Cash at end of period $ 1,135 $ 226 Net assets attributable to contractholders per unit For the year ended December 31, 2016 2015 Invest Series $ 10.06 $ 10.10 Management fees and insurance fees Series 1 11.85 11.93 Annual Management Fee Series 2 9.98 10.06 Invest Series 1.35% 1.35% Statement of Comprehensive Income Series 1 1.60% 1.60% Series 2 1.41% 1.41% Annual Insurance Fee (Limit) For the year ended December 31, 2016 2015 Invest Series 0.25 (0.75) % 0.25 (0.75) % Income Series 1 0.35 (0.65) % 0.35 (0.65) % Distribution from underlying fund $ 192,422 $ 215,521 Series 2 0.55 (1.05) % 0.55 (1.05) % Realized loss on sale of investments (36,486) (12,278) Change in unrealized gain/loss of investments (53,933) (32,156) Sales and redemption of units 102,003 171,087 Invest Series Expenses Opening balance as at January 1st 55,709 500 Management fees 68,067 70,800 Purchases during the period 35,827 193,964 Insurance fees 31,062 30,632 Redemptions during the period (57,696) (138,755) Other adminis trative expens es 82,173 78,724 Clos ing bala nce as a t December 31s t 33,840 55,709 181,302 180,156 Series 1 Less: Expenses waived 30,867 22,862 Opening balance as at January 1st 502,869 525,513 Expens es after wa iver 150,435 157,294 Purcha ses during the period 65,170 164,535 Net income (loss) attributable to contractholders $ (48,432) $ 13,793 Redemptions during the period (122,134) (187,179) Net income (los s) attributable to contra ctholders per unit Clos ing bala nce as a t December 31s t 445,905 502,869 Invest Series $ (0.01) $ (0.14) Series 2 Series 1 (0.08) 0.06 Opening balance as at January 1st 175,468 500 Series 2 (0.08) (0.07) Purchases during the period 159,936 231,140 Redemptions during the period (205,582) (56,172) Statement of Changes in Net Assets Attributable to Contractholders Clos ing bala nce as a t December 31s t 129,822 175,468 For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 8,323,705 $ 6,249,692 Investment in underlying fund at fair value Premium deposits 2,747,875 6,265,568 Level 1 $ 6,928,506 $ 8,345,353 Net income (loss) attributable to contractholders (48,432) 13,793 11,023,148 12,529,053 Schedule of investment in underlying fund Withdrawa ls 4,103,674 4,205,348 RBC Canadian Short-Term Income Fund, Series O Net assets, end of the period $ 6,919,474 $ 8,323,705 Number of units 644,698 767,170 Number of units outstanding Cost $ 7,040,170 $ 8,403,084 Invest Series 33,840 55,709 Percentage held i n underlying fund 0.1347% 0.1775% Series 1 445,905 502,869 Fair va lue $ 6,928,506 $ 8,345,353 Series 2 129,822 175,468 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 5 of 73

RBC Canadian Short-Term Income GIF (continued) Top 25 holdings of the underlying fund (unaudited) Government of Canada 0.500% Nov 1 2018 5.0% Canada Housing Trust No. 1 2.350% Dec 15 2018 1.4% Cana da Housing Trust No. 1 3.350% Dec 15 2020 3.3% Province of Ontario 2.850% Jun 2 2023 1.4% Province of Ontario 2.100% Sep 8 2018 3.3% Government of Canada 2.750% Jun 1 2022 1.4% Cash & Cash Equivalents 2.6% HSBC Bank Canada 2.491% May 13 2019 1.4% Province of Quebec 3.500% Dec 1 2022 2.4% Province of Ontario 2.100% Sep 8 2019 1.3% Government of Ca nada 0.750% Sep 1 2020 2.3% Province of Ontario 4.400% Jun 2 2019 1.3% Province of Quebec 4.500% Dec 1 2018 2.0% Bank of Montreal 3.210% Sep 13 2018 1.2% Province of Ontario 4.000% Jun 2 2021 1.9% Government of Canada 0.750% Mar 1 2021 1.2% Province of Ontario 1.900% Sep 8 2017 1.8% Province of Alberta 1.600% Jun 15 2018 1.2% Cana da Housing Trust No. 1 2.650% Mar 15 2022 1.8% Canadian Imperial Bank of Commerce 1.850% Jul 14 2020 1.1% Province of New Brunswick 4.500% Jun 2 2020 1.7% Government of Canada 0.500% Aug 1 2018 1.1% Cana da Housing Trust No. 1 1.250% Jun 15 2021 1.5% Province of Ontario 3.150% Jun 2 2022 1.1% Province of Quebec 4.500% Dec 1 2020 1.5% 46.2% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 3 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series 4 Series 1 Net Asset Value attributable to contractholders $ 10.06 $ 10.10 $ 10.03 $ 11.85 $ 11.93 $ 11.87 $ 11.71 $ 11.68 Net assets attributable to contractholders ($ '000) $ 340 $ 563 $ 5 $ 5,284 $ 5,997 $ 6,240 $ 6,749 $ 7,413 Net Income (loss) ($ '000) $ (1) $ (12) $ - The comparative data for $ (35) $ 32 $ 89 $ 16 $ 43 Premium deposits ($ '000) $ 363 $ 1,966 $ 5 the year 2013 and prior $ 777 $ 1,969 $ 2,750 $ 2,349 $ 3,891 Withdrawals ($ '000) $ 585 $ 1,396 $ - not available as Invest $ 1,454 $ 2,243 $ 3,349 $ 3,028 $ 3,190 Number of units outstanding 33,840 55,709 500 Series was introduced in 445,905 502,869 525,513 576,445 634,916 Management expens e ratio 1 1.73% 1.82% 1.81% 2014. 2.03% 2.04% 1.82% 1.82% 1.82% Management expense before waiver 2.45% 2.36% 1.81% 2.29% 2.24% 2.14% 1.95% 2.13% Portfolio turnover rate of the underlying fund 2 30.90% 30.67% 36.84% 30.90% 30.67% 36.84% 45.34% 21.62% Series 2 4 Net Asset Value attributable to contractholders $ 9.98 $ 10.06 $ 10.03 Net assets attributable to contractholders ($ '000) $ 1,295 $ 1,764 $ 5 Net Income (loss) ($ '000) $ (12) $ (6) $ - Premium deposits ($ '000) $ 1,608 $ 2,331 $ 5 Withdrawals ($ '000) $ 2,065 $ 566 $ - Number of units outstanding 129,822 175,468 500 Management expens e ratio 1 2.16% 2.22% 2.22% Management expense before waiver 3.06% 2.97% 2.22% Portfolio turnover rate of the underlying fund 2 30.90% 30.67% 36.84% The comparative data for the year 2013 and prior not available as Series 2 was introduced in 2014. 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the tradingcosts payable by the fund in the year, and the greater the chance ofan investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. 3 Financial highlights for the years 2015, 2014 and 2013 are based on IFRS and for the year 2012 is based on Canadian Generally Accepted Accounting Principles. 4 Invest series and Series 2 commenced operations on November 7, 2014. RBC GUARANTEED INVESTMENT FUNDS Page 6 of 73

RBC Bond GIF Statement of Financial Position Statement of Cash Flow As at Dec 31, 2016 Dec 31, 2015 For the year ended December 31, 2016 2015 Assets Operating activities Cash $ 349,400 $ - Net income (loss) attributable to contractholders $ 206,295 $ 322,222 Investments in underlying fund at fair value 24,646,703 23,384,774 Add (deduct) to convert net income to Other assets a cash basis Accrued income distribution from underlying funds - - Net losses on investments 79,775 40,436 Accounts receivable - contractholders - 1,000 Change in other assets 3,139 1,747 Accounts receivable - sale of investments - - Change in other liabilities (5,005) (12,482) Due from RBC Life Insurance Company 3,304 3,324 Purchases of investments (8,134,689) (7,799,975) Other 1,177 4,296 Proceeds from sales of investments 6,792,985 3,664,743 Liabilities 25,000,584 23,393,394 Cash provided by (used in) oeprating activities (1,057,500) (3,783,309) Financing activities Bank indebtedness - 350 Distributions to the contractholders - - Other liabilities Proceeds from issue of units 8,944,297 8,121,844 Accrued expenses 43,915 48,920 Redemption of units (7,537,047) (4,401,079) Accounts payable - contractholders - - Cash provided by (used in) financing activities 1,407,250 3,720,765 Accounts payable - purchase of investments - - Increase (decrease) in cash 349,750 (62,544) Other - - Cash (Bank indebtedness) at beginning of period (350) 62,194 Net assets attributable to contractholders $ 24,956,669 $ 23,344,124 43,915 49,270 Cash (Bank indebtedness) at end of period $ 349,400 $ (350) Net assets attributable to contractholders per unit For the year ended December 31, 2016 2015 Invest Series $ 10.57 $ 10.41 Management fees and insurance fees Series 1 14.33 14.14 Annual Management Fee Series 2 10.47 10.34 Invest Series 1.34% 1.34% Statement of Comprehensive Income Series 1 1.60% 1.60% Series 2 1.42% 1.42% Annual Insurance Fee (Limit) For the year ended December 31, 2016 2015 Invest Series 0.25 (0.75) % 0.25 (0.75) % Income Series 1 0.35 (0.65) % 0.35 (0.65) % Distribution from underlying fund $ 776,160 $ 816,605 Series 2 0.55 (1.05) % 0.55 (1.05) % Realized gain on sale of investments 380,471 112,981 Change in unrealized gain/loss of investments (460,246) (153,417) Sales and redemption of units 696,385 776,169 Invest Series Expenses Opening balance as at January 1st 83,336 6,719 Management fees 304,105 286,807 Purchases during the period 174,846 83,143 Insurance fees 92,172 84,945 Redemptions during the period (30,914) (6,526) Other administrative expenses 131,397 121,064 Closing balance as at December 31st 227,268 83,336 527,674 492,816 Series 1 Less: Expenses waived 37,584 38,869 Opening balance as at January 1st 1,514,186 1,384,064 Expenses after waiver 490,090 453,947 Purchases during the period 439,971 429,405 Net income attributable to contractholders $ 206,295 $ 322,222 Redemptions during the period (463,036) (299,283) Net income (loss) attributable to contractholders per unit Closing balance as at December 31st 1,491,121 1,514,186 Invest Series $ (0.05) $ 0.18 Series 2 Series 1 0.14 0.22 Opening balance as at January 1st 102,713 768 Series 2 0.11 (0.14) Purchases during the period 59,762 111,348 Redemptions during the period (48,567) (9,403) Statement of Changes in Net Assets Attributable to Contractholders Closing balance as at December 31st 113,908 102,713 For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 23,344,124 $ 19,301,137 Investment in underlying fund at fair value Premium deposits 8,943,297 8,121,844 Level 1 $ 24,646,703 $ 23,384,774 Net income (loss) attributable to contractholders 206,295 322,222 32,493,716 27,745,203 Schedule of investment in underlying fund Wi thdra wals 7,537,047 4,401,079 RBC Bond Fund, Series O Net assets, end of the period $ 24,956,669 $ 23,344,124 Number of units 3,598,164 3,388,361 Number of units outstanding Cost $ 24,799,728 $ 23,077,553 Invest Series 227,268 83,336 Percentage held in underlying fund 0.1429% 0.1505% Series 1 1,491,121 1,514,186 Fair value $ 24,646,703 $ 23,384,774 Series 2 113,908 102,713 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 7 of 73

RBC Bond GIF (continued) Top 25 holdings of the underlying fund (unaudited) Province of Ontario 3.450% Jun 2 2045 3.3% BlueBay Emerging Markets Corporate Bond Fund 1% Province of Ontario 2.900% Dec 2 2046 3.1% Government of Canada 3.500% Dec 1 2045 1% Cash & Cash Equivalents 2.6% Province of Quebec 3.750% Sep 1 2024 1% Province of Ontario 3.500% Jun 2 2043 2.5% Province of Quebec 5.000% Dec 1 2041 1% Province of Ontario 4.600% Jun 2 2039 2.1% Province of Ontario 6.500% Ma r 8 2029 1% Province of Ontario 4.650% Jun 2 2041 1.8% Canadian 10-Year Bond Future, March 2017 1% Province of Ontario 2.850% Jun 2 2023 1.8% Canada Housing Trust No. 1 2.350% Sep 15 2023 1% Province of Ontario 3.500% Jun 2 2024 1.6% Province of Ontario 4.400% Jun 2 2019 1% Province of Ontario 2.400% Jun 2 2026 1.5% Province of Ontario 4.700% Jun 2 2037 1% Government of Canada 1.500% Jun 1 2026 1.5% Toronto-Dominion Bank 2.447% Apr 2 2019 1% Province of Quebec 3.000% Sep 1 2023 1.5% Royal Bank of Canada 2.030% Mar 15 2021 1% Province of Ontario 2.600% Jun 2 2025 1.4% Province of Quebec 4.250% Dec 1 2043 1% RBC Emerging Markets Foreign Exchange Fund 1.2% 37.9% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 3 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series 4 Series 1 Net Asset Value attributable to contractholders $ 10.57 $ 10.41 $ 10.17 $ 14.33 $ 14.14 $ 13.89 $ 12.97 $ 13.24 Net assets attributable to contractholders ($ '000) $ 2,403 $ 867 $ 68 $ 21,362 $ 21,415 $ 19,225 $ 16,636 $ 19,686 Net Income (loss ) ($ '000) $ (7) $ 7 $ 1 The comparative data for $ 201 $ 323 $ 1,200 $ (524) $ 435 Premium deposits ($ '000) $ 1,873 $ 861 $ 68 the year 2013 and prior $ 6,439 $ 6,102 $ 6,762 $ 10,050 $ 13,497 Withdrawals ($ '000) $ 331 $ 68 $ - not available as Invest $ 6,693 $ 4,236 $ 5,373 $ 12,577 $ 3,779 Number of units outs ta nding 227,268 83,336 6,719 Series was introduced in 1,491,121 1,514,186 1,384,064 1,282,719 1,486,425 Management expense ratio 1 1.75% 1.69% 1.80% 2014. 2.05% 2.04% 1.83% 1.83% 1.83% Management expense before waiver 1.94% 1.89% 1.80% 2.20% 2.21% 2.03% 1.90% 1.83% Portfolio turnover rate of the underlying fund 2 22.46% 22.38% 35.76% 22.46% 22.38% 35.76% 31.63% 33.88% Series 2 4 Net Asset Value attributable to contractholders $ 10.47 $ 10.34 $ 10.17 Net assets attributable to contractholders ($ '000) $ 1,192 $ 1,062 $ 8 Net income (loss ) ($ '000) $ 12 $ (8) $ 1 Premium deposits ($ '000) $ 631 $ 1,159 $ 8 Withdrawals ($ '000) $ 513 $ 97 $ - Number of units outs ta nding 113,908 102,713 768 Management expense ratio 1 2.15% 2.09% 2.23% Management expense before waiver 2.44% 2.39% 2.25% Portfolio turnover rate of the underlying fund 2 22.46% 22.38% 35.76% The comparative data for the year 2013 and prior not available as Series 2 was introduced in 2014. 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the tradingcosts payable by the fund in the year, and the greater the chance ofan investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. 3 Financial highlights for the years 2015, 2014 and 2013 are based on IFRS and for the year 2012 is based on Canadian Generally Accepted Accounting Principles. 4 Invest series and Series 2 commenced operations on November 7, 2014. RBC GUARANTEED INVESTMENT FUNDS Page 8 of 73

RBC PH&N Total Return Bond GIF Statement of Financial Position Statement of Cash Flow As at Dec 31, 2016 Dec 31, 2015 For the year ended December 31, 2016 2015 Assets Operating activities Cash $ - $ - Net income (loss) attributable to contractholders $ 41,918 $ 130,028 Inves tments in underlying fund at fair value 10,236,835 8,895,453 Add (deduct) to convert net income to Other ass ets a cash ba sis Accrued income distribution from underlying funds - - Net (gains ) losses on investments 67,017 (22,798) Accounts receivable - contractholders - - Change in other ass ets 3,311 2,936 Accounts receivable - s ale of inves tments - - Change in other lia bilities (570) (10,275) Due from RBC Life Insurance Company 2,985 3,176 Purchases of investments (3,263,843) (1,834,877) Other 746 3,866 Proceeds from sales of investments 1,855,444 1,194,257 Liabilities 10,240,566 8,902,495 Cash provided by (used in) oeprating activities (1,296,723) (540,729) Financing activities Bank indebtedness 65 34,614 Distributions to the contractholders - - Other liabilities Proceeds from iss ue of units 3,929,296 1,866,800 Accrued expenses 21,638 22,208 Redemption of units (2,598,024) (1,362,172) Accounts payable - contractholders 5,850 - Cash provided by (used in) financing activities 1,331,272 504,628 Accounts payable - purchase of investments - - Increase (decrease) in cash 34,549 (36,101) Other - - Cash (Bank indebtedness ) at beginning of period (34,614) 1,487 Net assets attributable to contractholders $ 10,213,013 $ 8,845,673 27,553 56,822 Bank indebtedness at end of period $ (65) $ (34,614) Net ass ets attributable to contractholders per unit For the year ended December 31, 2016 2015 Invest Series $ 10.48 $ 10.37 Management fees and insurance fees Series 1 11.84 11.75 Annual Management Fee Series 2 10.39 10.32 Invest Series 1.34% 1.34% Statement of Comprehensive Income Series 1 1.60% 1.60% Series 2 1.44% 1.44% Annual Insurance Fee (Limit) For the year ended December 31, 2016 2015 Invest Series 0.25 (0.75) % 0.25 (0.75) % Income Series 1 0.35 (0.65) % 0.35 (0.65) % Distribution from underlying fund $ 302,659 $ 286,856 Series 2 0.55 (1.05) % 0.55 (1.05) % Realized gain on sale of investments 145,227 184,192 Change in unrealized gain/loss of investments (212,244) (161,394) Sales and redemption of units 235,642 309,654 Invest Series Expenses Opening balance as at January 1st 14,072 2,828 Management fees 99,663 96,883 Purchases during the period 54,391 13,914 Insurance fees 36,267 33,197 Redemptions during the period (17,268) (2,670) Other adminis trative expenses 89,085 86,511 Closing balance as at December 31st 51,195 14,072 225,015 216,591 Series 1 Less: Expenses waived 31,291 36,965 Opening balance as at January 1st 726,436 707,470 Expenses after waiver 193,724 179,626 Purchas es during the period 215,365 131,994 Net income (loss) attributable to contractholders $ 41,918 $ 130,028 Redemptions during the period (181,091) (113,028) Net income (loss ) attributable to contractholders per unit Closing balance as at December 31st 760,710 726,436 Invest Series $ (0.41) $ (0.07) Series 2 Series 1 0.10 0.18 Opening balance as at January 1st 16,070 500 Series 2 (0.57) (0.06) Purchases during the period 70,941 15,570 Redemptions during the period (22,340) - Statement of Changes in Net Assets Attributable to Contractholders Closing balance as at December 31st 64,671 16,070 For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 8,845,673 $ 8,211,017 Investment in underlying fund at fair value Premium deposits 3,929,296 1,866,800 Level 1 $ 10,236,835 $ 8,895,453 Net income (loss) attributable to contractholders 41,918 130,028 12,816,887 10,207,845 Schedule of investment in underlying fund Withdrawals 2,603,874 1,362,172 PH&N Total Return Bond Fund, Series O Net assets, end of the period $ 10,213,013 $ 8,845,673 Number of units 907,111 775,406 Number of units outs tanding Cost $ 10,489,988 $ 8,936,362 Invest Series 51,195 14,072 Percentage held in underlying fund 0.1283% 0.1192% Series 1 760,710 726,436 Fair value $ 10,236,835 $ 8,895,453 Series 2 64,671 16,070 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 9 of 73

RBC PH&N Total Return Bond GIF (continued) Top 25 holdings of the underlying fund (unaudited) Province of Ontario 7.600% Jun 2 2027 5.1% Province of Ontario 8.100% Sep 8 2023 1.6% Government of Canada 0.500% Mar 1 2022 4.1% Province of Ontario 5.600% Jun 2 2035 1.6% Government of Canada 0.750% Sep 1 2021 3.2% Province of Ontario 2.850% Jun 2 2023 1.5% Province of Ontario 3.500% Jun 2 2043 2.8% Toronto-Dominion Bank 1.680% Jun 8 2021 1.4% Province of Onta rio 6.200% Jun 2 2031 2.5% Government of Cana da 2.750% Dec 1 2048 1.4% Cash & Cash Equivalents 2.3% Royal Bank of Cana da 1.400% Apr 26 2019 1.3% Government of Canada 3.500% Jun 1 2020 2.0% Canada Housing Trust No. 1 2.900% Jun 15 2024 1.2% Canada Housing Trust No. 1 1.250% Jun 15 2021 2.0% Government of Canada 2.750% Jun 1 2022 1.2% Province of Ontario 4.600% Jun 2 2039 1.9% Province of Ontario 8.500% Dec 2 2025 1.2% Province of Quebec 8.500% Apr 1 2026 1.8% Province of Ontario 3.500% Jun 2 2024 1.1% Government of Canada 0.750% Sep 1 2020 1.8% Canada Housing Trust No. 1 2.650% Mar 15 2022 1.1% Government of Canada 0.750% Mar 1 2021 1.7% Cana da Housing Trust No. 1 1.250% Dec 15 2020 1.1% Province of Ontario 2.900% Dec 2 2046 1.7% 48.6% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 3 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series 4 Series 1 Net Asset Value attributable to contractholders $ 10.48 $ 10.37 $ 10.18 $ 11.84 $ 11.75 $ 11.56 $ 10.78 $ 11.01 Net assets attributable to contractholders ($ '000) $ 537 $ 146 $ 29 $ 9,004 $ 8,534 $ 8,177 $ 12,599 $ 12,224 Net Income (loss) ($ '000) $ (9) $ (1) $ - The comparative data for $ 70 $ 131 $ 778 $ (230) $ 287 Premium deposits ($ '000) $ 582 $ 146 $ 29 the year 2013 a nd prior $ 2,590 $ 1,560 $ 1,493 $ 6,060 $ 8,590 Withdrawals ($ '000) $ 182 $ 28 $ - not available as Invest $ 2,190 $ 1,334 $ 6,693 $ 5,456 $ 3,571 Number of units outstanding 51,195 14,072 2,828 Series was introduced in 760,710 726,436 707,470 1,169,067 1,110,739 Management expens e ra tio 1 1.78% 1.79% 1.80% 2014. 2.07% 2.06% 1.85% 1.84% 1.87% Management expense before waiver 2.39% 2.46% 1.80% 2.39% 2.48% 2.21% 2.09% 1.87% Portfolio turnover rate of the underlying fund 2 132.94% 218.83% 256.07% 132.94% 218.83% 256.07% 283.61% 207.49% Series 2 4 Net Asset Value attributable to contractholders $ 10.39 10.32 $ 10.17 Net assets attributable to contractholders ($ '000) $ 672 $ 166 $ 5 Net Income (loss) ($ '000) $ (19) $ - $ - Premium deposits ($ '000) $ 757 $ 161 $ 5 Withdrawals ($ '000) $ 232 $ - $ - Number of units outstanding 64,671 16,070 500 Management expens e ra tio 1 2.13% 2.25% 2.25% Management expense before waiver 2.82% 3.04% 2.25% Portfolio turnover rate of the underlying fund 2 132.94% 218.83% 256.07% The comparative data for the year 2013 a nd prior not available as Series 2 was introduced in 2014. 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the tradingcosts payable by the fund in the year, and the greater the chance ofan investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. 3 Financial highlights for the years 2015, 2014 and 2013 are based on IFRS and for the year 2012 is based on Canadian Generally Accepted Accounting Principles. 4 Invest series and Series 2 commenced operations on November 7, 2014. RBC GUARANTEED INVESTMENT FUNDS Page 10 of 73

RBC Global Bond GIF Statement of Financial Position Statement of Cash Flow As a t Dec 31, 2016 Dec 31, 2015 For the yea r ended December 31, 2016 2015 Assets Operating activities Ca sh $ 39,126 $ 528 Net income (loss ) attributable to contractholders $ 5,173 $ 9,363 Investments in underlying fund at fair value 3,646,484 2,147,203 Add (deduct) to convert net income to Other assets a cash basis Accrued income distribution from underlying funds - - Net gains on investments (12,601) (4,432) Accounts receivable - contra ctholders 7,994 - Change in other as sets 3,213 4,889 Accounts receivable - s ale of inves tments - - Change in other liabilities 2,126 (1,393) Due from RBC Life Insurance Company 4,008 4,101 Purchases of investments (3,312,298) (1,782,172) Other 746 3,866 Proceeds from sales of investments 1,825,618 740,292 Liabilities 3,698,358 2,155,698 Cash provided by (used in) oeprating activities (1,488,769) (1,033,453) Financing activities Bank indebtedness - - Distributions to the contractholders - - Other liabilities Proceeds from issue of units 3,351,722 1,723,728 Accrued expenses 21,146 19,020 Redemption of units (1,824,355) (700,680) Accounts payable - contractholders - - Cash provided by (used in) financing activities 1,527,367 1,023,048 Accounts payable - purchase of investments - - Increase (decrease) in cash 38,598 (10,405) Other - - Cash at beginning of period 528 10,933 Net assets attributable to contractholders $ 3,677,212 $ 2,136,678 21,146 19,020 Cash (Bank indebtedness) at end of period $ 39,126 $ 528 Net a ss ets attributa ble to contractholders per unit For the yea r ended December 31, 2016 2015 Invest Series $ 10.52 $ 10.22 Management fees and insurance fees Series 1 13.42 13.09 Annual Management Fee Series 2 10.41 10.17 Invest Series 1.55% 1.55% Statement of Comprehensive Income Series 1 1.80% 1.80% Series 2 1.62% 1.62% Annual Insurance Fee (Limit) For the year ended December 31, 2016 2015 Inves t Series 0.40 (0.90) % 0.40 (0.90) % Income Series 1 0.50 (0.80) % 0.50 (0.80) % Distribution from underlying fund $ 76,121 $ 42,501 Series 2 0.70 (1.20) % 0.70 (1.20) % Realized gain on sale of investments 148,822 12,645 Change in unrealized gain/loss of investments (136,221) (8,213) Sales and redemption of units 88,722 46,933 Invest Series Expenses Opening balance as at January 1st 18,733 500 Management fees 36,650 16,589 Purchases during the period 40,032 47,139 Insurance fees 19,926 8,623 Redemptions during the period (21,869) (28,906) Other adminis trative expenses 72,506 61,204 Closing balance as at December 31st 36,896 18,733 129,082 86,416 Series 1 Less : Expenses waived 45,533 48,846 Opening balance as at January 1st 123,131 83,937 Expenses a fter waiver 83,549 37,570 Purchas es during the period 166,372 65,776 Net income (loss) attributable to contractholders $ 5,173 $ 9,363 Redemptions during the period (93,609) (26,582) Net income (loss ) attributable to contractholders per unit Closing balance as at December 31st 195,894 123,131 Invest Series $ (0.02) $ 0.13 Series 2 Series 1 0.05 0.08 Opening balance as at January 1st 32,830 500 Series 2 (0.06) (0.06) Purchases during the period 63,129 37,819 Redemptions during the period (32,503) (5,489) Statement of Changes in Net Assets Attributable to Contractholders Closing balance as at December 31st 63,456 32,830 For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 2,136,678 $ 1,104,267 Investment in underlying fund at fair value Premium deposits 3,359,716 1,723,728 Level 1 $ 3,646,484 $ 2,147,203 Net income (loss) attributable to contractholders 5,173 9,363 5,501,567 2,837,358 Schedule of investment in underlying fund Withdrawals 1,824,355 700,680 RBC Global Bond Fund, Series O Net assets, end of the period $ 3,677,212 $ 2,136,678 Number of units 329,471 192,607 Number of units outstanding Cost $ 3,764,515 $ 2,129,013 Invest Series 36,896 18,733 Percentage held in underlying fund 0.0664% 0.0568% Series 1 195,894 123,131 Fair value $ 3,646,484 $ 2,147,203 Series 2 63,456 32,830 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 11 of 73

RBC Global Bond GIF (continued) Top 25 holdings of the underlying fund (unaudited) United States Treasury 1.500% Nov 30 2019 4.8% Development Bank of Japan Inc. JPY 1.750% Mar 17 2017 2.1% BlueBay Emerging Markets Corporate Bond Fund 3.8% Japan Government Twenty Year JPY 1.300% Jun 20 2035 2.1% United States Treasury 1.500% Jan 31 2022 3.2% United States Treasury 1.000% May 15 2018 2.0% France O.A.T. EUR 0.500% May 25 2026 3.1% United Kingdom Gilt GBP 1.500% Jul 22 2026 2.0% Bundesrepublik Deutschland EUR 0.500% Feb 15 2026 3.0% RBC Emerging Ma rkets Foreign Exchange Fund 2.0% Cash & Cash Equivalents 3.0% United States Treasury 1.625% Jul 31 2020 1.9% Buoni Poliennali Del Tesoro EUR 1.600% Jun 1 2026 2.6% Buoni Poliennali Del Tesoro EUR 2.500% May 1 2019 1.8% United States Treasury 1.625% Feb 15 2026 2.5% United States 10-Year Note Future, March 2017 1.8% United States Treasury 2.500% Feb 15 2045 2.5% Japan Government Thirty Year JPY 0.300% Jun 20 2046 1.7% Japan Government Twenty Year JPY 0.200% Jun 20 2036 2.4% Spain Government EUR 1.150% Jul 30 2020 1.7% Buoni Poliennali Del Tesoro EUR 0.300% Oct 15 2018 2.3% Japan Government Twenty Year JPY 0.500% Sep 20 2036 1.6% Bundesrepublik Deutschland EUR 1.500% Sep 4 2022 2.1% Province of Ontario USD 2.000% Jan 30 2019 1.5% Spa in Government EUR 2.750% Apr 30 2019 2.1% 59.6% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 3 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series 4 Series 1 Net Asset Value attributable to contractholders 10.52 $ 10.22 $ 10.16 13.42 $ 13.09 $ 13.03 $ 12.19 $ 12.20 Net assets attributable to contractholders ($ '000) $ 388 $ 191 $ 5 $ 2,629 $ 1,612 $ 1,094 $ 642 $ 774 Net Income (loss) ($ '000) $ - $ 2 $ - The comparative data for $ 8 $ 8 $ 54 $ - $ 39 Premium deposits ($ '000) $ 428 $ 481 $ 5 the year 2013 and prior $ 2,263 $ 858 $ 668 $ 333 $ 257 Withdrawals ($ '000) $ 231 $ 296 $ - not available as Invest $ 1,254 $ 349 $ 269 $ 465 $ 169 Number of units outstanding 36,896 18,733 500 Series was introduced in 195,894 123,131 83,937 52,619 63,416 Mana gement expens e ratio 1 2.07% 2.07% 2.20% 2014. 2.45% 2.45% 2.22% 2.22% 2.22% Management expense before waiver 3.58% 5.19% 2.19% 3.68% 5.61% 6.99% 8.69% 8.77% Portfolio turnover rate of the underlying fund 2 59.34% 105.88% 78.54% 59.34% 105.88% 78.54% 75.20% 104.12% Series 2 4 Net Asset Value attributable to contractholders 10.41 10.17 $ 10.15 Net assets attributable to contractholders ($ '000) $ 660 $ 334 $ 5 Net Income (loss) ($ '000) $ (3) $ (1) $ - Premium deposits ($ '000) $ 669 $ 385 $ 5 Withdrawals ($ '000) $ 339 $ 56 $ - Number of units outstanding 63,456 32,830 500 Mana gement expens e ratio 1 2.58% 2.58% 2.62% Management expense before waiver 4.28% 5.50% 2.62% Portfolio turnover rate of the underlying fund 2 59.34% 105.88% 78.54% The comparative data for the year 2013 and prior not available as Series 2 was introduced in 2014. 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the trading costs payable by the fund in the year, and the greater the chance ofan investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. 3 Financial highlights for the years 2015, 2014 and 2013 are based on IFRS and for the year 2012 is based on Canadian Generally Accepted Accounting Principles. 4 Invest series and Series 2 commenced operations on November 7, 2014. RBC GUARANTEED INVESTMENT FUNDS Page 12 of 73

RBC High Yield Bond GIF Statement of Financial Position Statement of Cash Flow As a t Dec 31, 2016 Dec 31, 2015 For the year ended December 31, 2016 2015 Assets Operating activities Cash $ 198 $ 220 Net income (loss) attributable to contractholders $ 159,005 $ (33,068) Investments in underlying fund at fair va lue 1,692,169 1,612,298 Add (deduct) to convert net income to Other assets a cash basis Accrued income distribution from underlying funds - - Net (gains) losses on investments (117,346) 97,955 Accounts receivable - contractholders - - Change in other assets 1,575 4,080 Accounts receivable - sale of investments - - Change in other liabilities (1,040) (8,171) Due from RBC Life Insurance Company 4,515 4,322 Purchases of investments (578,911) (398,257) Other 537 2,305 Proceeds from sales of investments 616,386 1,174,829 Liabilities 1,697,419 1,619,145 Cash provided by (used in) oeprating activities 79,669 837,368 Financing activities Bank indebtedness - - Distributions to the contractholders - - Other liabilities Proceeds from issue of units 578,005 423,411 Accrued expenses 13,731 14,771 Redemption of units (657,696) (1,259,724) Accounts payable - contractholders - - Cash provided by (used in) financing activities (79,691) (836,313) Accounts payable - purchase of investments - - Increase (decrease) in cash (22) 1,055 Other - - Cash (Bank indebtedness) at beginning of period 220 (835) Net assets attributable to contractholders $ 1,683,688 $ 1,604,374 13,731 14,771 Cash at end of period $ 198 $ 220 Net assets attributa ble to contractholders per unit For the year ended December 31, 2016 2015 Invest Series $ 10.74 $ 9.66 Management fees and insurance fees Series 1 11.09 10.02 Annual Management Fee Statement of Comprehensive Income Invest Series 1.50% 1.50% Series 1 1.80% 1.80% Annual Insurance Fee (Limit) Invest Series 0.45 (0.95) % 0.45 (0.95) % For the year ended December 31, 2016 2015 Series 1 0.55 (0.85) % 0.55 (0.85) % Income Distribution from underlying fund $ 80,296 $ 116,537 Realized loss on sale of investments (23,158) (29,643) Change in unrealized gain/loss of investments 140,504 (68,312) Sales and redemption of units 197,642 18,582 Invest Series Expenses Opening balance as at January 1st 4,218 1,934 Management fees 16,735 24,213 Purchases during the period 26,653 4,184 Insurance fees 9,031 12,086 Redemptions during the period (1,266) (1,900) Other administrative expenses 68,225 64,205 Clos ing balance as at December 31st 29,605 4,218 93,991 100,504 Series 1 Less: Expenses waived 55,354 48,854 Opening balance as at January 1st 156,127 239,039 Expenses after waiver 38,637 51,650 Purcha ses during the period 28,851 36,434 Net income (loss) attributable to contractholders $ 159,005 $ (33,068) Redemptions during the period (61,807) (119,346) Net income (loss ) attributa ble to contractholders per unit Clos ing balance as at December 31st 123,171 156,127 Invest Series $ 1.00 $ (0.40) Series 1 1.10 (0.16) Statement of Changes in Net Assets Attributable to Contractholders For the year ended December 31, 2016 2015 As at Dec 31, 2016 Dec 31, 2015 Net assets, beginning of the period $ 1,604,374 $ 2,473,755 Investment in underlying fund at fair value Premium deposits 578,005 423,411 Level 1 $ 1,692,169 $ 1,612,298 Net income (loss) attributable to contractholders 159,005 (33,068) 2,341,384 2,864,098 Schedule of investment in underlying fund Withdrawals 657,696 1,259,724 RBC High Yield Bond Fund, Series O Net assets, end of the period $ 1,683,688 $ 1,604,374 Number of units 156,093 160,439 Number of units outsta nding Cost $ 1,689,576 $ 1,750,209 Invest Series 29,605 4,218 Percentage held in underlying fund 0.0841% 0.0964% Series 1 123,171 156,127 Fair va lue $ 1,692,169 $ 1,612,298 The accompanying notes are an integral part of these financial statements. RBC GUARANTEED INVESTMENT FUNDS Page 13 of 73

RBC High Yield Bond GIF (continued) Top 25 holdings of the underlying fund (unaudited) Cash & Cash Equivalents 9.6% The AES Corp. 5.500% Mar 15 2024 1.1% Bloomberg Barclays Capital High Yield Bond SPDR Fund 2.4% Alcoa Nederland Holding BV USD 6.750% Sep 30 2024 1.1% Videotron Ltd. 5.750% Ja n 15 2026 1.9% Boyd Ga ming Corp. 6.375% Apr 1 2026 1.1% Access Midstream Partners LP 4.875% May 15 2023 1.4% D.R. Horton Inc. 5.750% Aug 15 2023 1.1% Diamond 1 Finance Corp. 6.020% Jun 15 2026 1.4% Numericable Group S.A. USD 6.000% May 15 2022 1.1% CCO Holdings LLC 5.750% Feb 15 2026 1.2% Avis Budget Car Rental LLC 5.250% Mar 15 2025 1.1% American Axle & Manufacturing Holdings, Inc. 6.625% Oct 15 2022 1.2% Calpine Corp. 5.250% Jun 1 2026 1.1% Universal Health Services Inc. 4.750% Aug 1 2022 1.2% Charter Communications Operating LLC 4.908% Jul 23 2025 1.1% Equinix Inc. 5.875% Jan 15 2026 1.2% T-Mobile USA Inc. 6.625% Apr 1 2023 1.1% The Goodyear Tire & Rubber Co. 5.000% May 31 2026 1.1% Ingles Markets Inc. 5.750% Jun 15 2023 1.0% Adient Global Holdings Ltd. EUR 3.500% Aug 15 2024 1.1% NCR Corp. 5.000% Jul 15 2022 1.0% HCA Inc. 5.875% Feb 15 2026 1.1% Cenovus Energy Inc. USD 6.750% Nov 15 2039 1.0% Precision Drilling Corp. USD 7.750% Dec 15 2023 1.1% 38.8% Financial Highlights (unaudited) The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past 5 years. For the years 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 Invest Series Series 1 Net Asset Value attributable to contractholders $ 10.74 $ 9.66 $ 9.87 $ 11.09 $ 10.02 $ 10.27 $ 10.03 Net assets attributable to contractholders ($ '000) $ 318 $ 41 $ 19 $ 1,366 $ 1,563 $ 2,455 $ 237 Net Income (loss) ($ '000) $ 15 $ (2) $ - The comparative data for $ 144 $ (31) $ 7 $ - Premium deposits ($ '000) $ 276 $ 42 $ 19 the year 2013 and prior $ 302 $ 381 $ 2,611 $ - Withdrawals ($ '000) $ 13 $ 19 $ - not available as Invest $ 645 $ 1,241 $ 400 $ - Number of units outstanding 29,605 4,218 1,934 series was introduced in 123,171 156,127 239,039 23,583 Management expens e ra tio 1 2.14% 2.19% 2.20% 2014. 2.56% 2.55% 2.33% 2.40% Management expense before waiver 6.25% 5.28% 2.20% 6.11% 4.93% 4.35% 36.98% Portfolio turnover rate of the underlying fund 2 46.64% 49.04% 43.67% 46.64% 49.04% 43.67% 57.06% The comparative data for the year 2012 and prior not available as the Fund commenced operations in November 2013. 1 The management expense ratio ("MER") is based on total expenses for the stated period and is expressed as an annualized percentage of daily average net assets during the period. 2 The underlying fund's portfolio turnover rate indicates how actively the fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the fund buying and selling all of the securities in its portfolio ofthe year. The higher a fund's portfolio turnover rate in a year, the greater the tradingcosts payable by the fund in the year, and the greater the chance ofan investor receivingtaxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance ofa fund. RBC GUARANTEED INVESTMENT FUNDS Page 14 of 73