2016 annual report - gamfunds.rbcgam.com/pdf/information/rbcetfs-annual-report-2016.pdf · 2016...

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2016 Annual Report

RBC ETFs


TABLE OF CONTENTS

Management Report of Fund Performance

FIXED-INCOME ETFSRBC 1-5 Year Laddered Corporate Bond ETF 1RBC 1-5 Year Laddered Canadian Bond ETF 6RBC Target 2017 Corporate Bond Index ETF 11RBC Target 2018 Corporate Bond Index ETF 16RBC Target 2019 Corporate Bond Index ETF 21RBC Target 2020 Corporate Bond Index ETF 26RBC Target 2021 Corporate Bond Index ETF 31RBC Target 2022 Corporate Bond Index ETF 37RBC Target 2023 Corporate Bond Index ETF 42

CANADIAN EQUITY ETFSRBC Canadian Preferred Share ETF 47RBC Quant Canadian Dividend Leaders ETF 52RBC Quant Canadian Equity Leaders ETF 57

U.S. EQUITY ETFSRBC Quant U.S. Dividend Leaders ETF 62RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF 67RBC Quant U.S. Equity Leaders ETF 72RBC Quant U.S. Equity Leaders (CAD Hedged) ETF 77

INTERNATIONAL EQUITY ETFSRBC Quant European Dividend Leaders ETF 82RBC Quant European Dividend Leaders (CAD Hedged) ETF 87RBC Quant EAFE Dividend Leaders ETF 92RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF 97RBC Quant EAFE Equity Leaders ETF 102RBC Quant EAFE Equity Leaders (CAD Hedged) ETF 107RBC Quant Emerging Markets Dividend Leaders ETF 112RBC Quant Emerging Markets Equity Leaders ETF 117

GLOBAL EQUITY ETFSRBC Strategic Global Dividend Leaders ETF 121RBC Strategic Global Equity Leaders ETF 126RBC Quant Global Infrastructure Leaders ETF 131

Financial Statements

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING 135

INDEPENDENT AUDITOR’S REPORT 136






GENERIC NOTES TO FINANCIAL STATEMENTS 314

CONTACT US Inside Back Cover

By Phone

Investors: 1-855-RBC-ETFS (722-3837) Dealers: 1-800-662-0652

By Mail

Head office:

RBC Global Asset Management Inc. 155 Wellington Street WestSuite 2200Toronto, Ontario M5V 3K7

For general mutual fund enquiries, write to:

RBC Global Asset Management Inc.P.O. Box 7500, Station AToronto, Ontario M5W 1P9

On the Internet

Visit our website at: www.rbcgam.com/etfs

RBC ETFs are managed by RBC Global Asset Management Inc. ® / TM Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

If you have questions regarding RBC ETFs, you can contact us using the following options:

CONTACT US

2016 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

FIXED-INCOME ETF

RBC 1-5 YEAR LADDERED CORPORATE BOND ETF

December 31, 2016

Portfolio Manager RBC Global Asset Management Inc. (“RBC GAM”)

This annual management report of fund performance (“MRFP”) contains financial highlights but does not contain the complete annual financial statements of the ETF. You can get a copy of the financial statements at your request, and at no cost, by calling 1-855-RBC-ETFS (722-3837), by writing to us at RBC Global Asset Management Inc., P.O. Box 7500, Station A, Toronto, Ontario M5W 1P9, or by visiting our website at www.rbcgam.com/etf/reports or SEDAR at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the ETF’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.

The Board of Directors of RBC Global Asset Management Inc. approved this annual management report of fund performance on March 8, 2017.

A Note on Forward-looking Statements

This report may contain forward-looking statements about the ETF, its future performance, strategies or prospects, and possible future ETF action. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the ETF and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made in relation to the ETF. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events.

The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.

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MANAGEMENT DISCUSSION OF FUND PERFORMANCE

Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of Canadian corporate bonds, divided (“laddered”) into five groupings with staggered maturities from one to five years, which will provide regular income while preserving capital.

The ETF will achieve exposure to Canadian corporate bonds primarily by investing in an equal-weighted portfolio of five RBC Target Maturity Corporate Bond ETFs with remaining terms to maturity of one to five years. At the end of each year, the nearest term RBC Target Maturity Corporate Bond ETF will be sold and proceeds invested into a longer-dated RBC Target Maturity Corporate Bond ETF to maintain the one- to five-year ladder. The portfolio holdings will be rebalanced initially on a semi-annual basis. The frequency of the rebalancing may change without notice.

RiskThere were no significant changes to the ETF that materially affected the ETF’s overall level of risk during the reporting period. The risks of investing in the ETF and the suitability of the ETF for investors remain as discussed in the Prospectus.

Results of OperationsThe ETF’s net asset value rose to $190 million as of December 31, 2016, from $149 million at the end of 2015. The increase was due mainly to net inflows.

Over the past year, the ETF’s units gained 2.2%, which underperformed the 2.3% rise in the benchmark. The broad-based index rose 3.7%. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

Corporate bonds with one year left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.

Donald Trump’s election in November as U.S. president-elect pushed down prices of government bonds due to concerns about faster inflation – resulting in losses for holders of government bonds. For holders of corporate bonds, however, the excess income offered by higher relative yields and smaller price drops resulted in gains.

Recent DevelopmentsIn the view of the portfolio manager, corporate bonds could benefit from stronger U.S. economic growth in 2017 given the probability of increased fiscal spending and regulatory rollbacks under a new administration. Assuming the Canadian dollar does not rise significantly, the economic outlook in Canada will depend on the strength of manufactured exports and services, the impact of fiscal stimulus, and any slowdown in housing activity. In the portfolio manager’s view, uncomfortably high domestic consumer-debt levels mean that the Bank of Canada is likely to keep interest rates unchanged in 2017, while the U.S. Federal Reserve is expected to raise rates during the year.

Effective December 1, 2016, Mr. Lloyd R. McGinnis retired and Ms. Élaine Cousineau was appointed as Chair of the Independent Review Committee (the “IRC”). Mr. Charles F. Macfarlane was appointed as Vice Chair of the IRC. Effective January 1, 2017, Ms. Suromitra Sanatani and Ms. Catherine Kloepfer were appointed as members of the IRC.

Effective July 1, 2016, Deloitte LLP resigned and PricewaterhouseCoopers LLP was appointed as auditors of the ETF.

Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the ETF. RBC GAM is responsible for the ETF’s day-to-day operations, holds title to the ETF’s property on behalf of its unitholders, and provides investment advice and portfolio management services to the ETF. RBC GAM is paid a management fee by the ETF as compensation for its services.

Affiliates of RBC GAM that provide services to the ETF in the course of their normal businesses are discussed below.

Custodian and Valuation AgentRBC Investor Services Trust (“RBC IS”) is the custodian and valuation agent and holds the assets of the ETF and provides administrative services to the ETF.


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Designated BrokerRBC GAM has entered into an agreement with RBC Dominion Securities Inc., an affiliate of RBC GAM, to act as designated broker and underwriter for distribution of units of the ETF, on terms and conditions that are comparable to arm’s length agreements in the ETF industry. The material terms and conditions of the agreement have been disclosed in the ETF’s Prospectus.

Brokers and DealersThe ETF has established standard brokerage and dealing agreements at market rates with related parties. These related-party commissions were $40,000 (2015 – $47,000) or 100% (2015 – 100%) of the total transaction costs paid for this ETF.

Other Related-Party TransactionsPursuant to applicable securities legislation, the ETF relied on the standing instructions from the Independent Review Committee with respect to one or more of the following transactions:

Related-Party Trading Activities(a) trades in securities of Royal Bank;

(b) investments in the securities of issuers for which a related-party dealer acted as an underwriter during the distribution of such securities and the 60-day period following the conclusion of such distribution of the underwritten securities to the public;

(c) purchases of debt securities from or sales of debt securities to a related-party dealer, where it acted as principal.

The applicable standing instructions require that Related-Party Trading Activities be conducted in accordance with RBC GAM policy and that RBC GAM advise the Independent Review Committee of a material breach of any standing instruction. RBC GAM policy requires that an investment decision in respect of Related-Party Trading Activities (i) is made free from any influence of Royal Bank or its associates or affiliates and without taking into account any consideration relevant to Royal Bank or its affiliates or associates, (ii) represents the business judgment of the portfolio manager, uninfluenced by considerations other than the best interests of the ETF, (iii) is in compliance with RBC GAM policies and procedures, and (iv) achieves a fair and reasonable result for the ETF.

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FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the ETF and are intended to help you understand the ETF’s financial performance for the past five years or for the periods since inception. This information is derived from the ETF’s audited annual financial statements. For financial years beginning on or after January 1, 2014, financial highlight information is derived from financial statements prepared in compliance with International Financial Reporting Standards (“IFRS”). For financial years prior to January 1, 2014, financial highlight information is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). “Net Assets,” for the periods prior to 2014, are calculated in accordance with GAAP, and “Net Asset Value” is derived from the valuation method disclosed in the RBC Funds Annual Information Form and is used for transactional purposes (see Ratios and Supplemental Data). All other calculations for the purposes of this MRFP are made using Net Asset Value. There is no significant difference between “Net Assets” and “Net Asset Value” under IFRS.

Change in Net Assets Per Unit ($)

Annual Distributions2

Increase (Decrease) from Operations1 From Total Realized Unrealized Income From Net Assets For the Year/ Net Assets Revenue Total Gains Gains (Excluding From Capital Return End of Period Ended Beginning of Year/Period (Loss) Expenses (Losses) (Losses) Total Dividends) Dividends Gains of Capital Total Year/Period

RBC 1-5 Year ETFDec. 31, 2016 19.73 0.65 – (0.14) (0.11) 0.40 (0.63) – – (0.01) (0.64) 19.51 Dec. 31, 2015 20.00 0.70 (0.01) (0.13) (0.23) 0.33 (0.70) – – – (0.70) 19.73 Dec. 31, 20143 20.00† 0.73 – – (0.19) 0.54 (0.65) – – – (0.65) 20.00

1 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit.

2 Distributions are either paid in cash, reinvested in additional units of the ETF, or both.3 From January 15, 2014.† Initial offering net asset value per unit.

Ratios and Supplemental Data

Net Asset Value Number of Units Management MER Before Trading Portfolio Net Asset Value Closing As at ($000s) Outstanding (000s) Expense Ratio (%)1 Absorption (%)1 Expense Ratio (%)2 Turnover Rate (%)3 Per Unit ($) Market Price ($)

RBC 1-5 Year ETFDec. 31, 2016 190 238 9 750 0.28 0.28 0.02 25.30 19.51 19.55 Dec. 31, 2015 148 923 7 550 0.28 0.28 0.04 42.39 19.73 19.68Dec. 31, 20144 72 016 3 600 0.28 0.28 – 0.64 20.00 20.00

1 The management expense ratio (“MER”) is based on expenses for the stated period, excluding commissions and other portfolio transaction costs, and is expressed as an annualized percentage of the daily average net asset value during the period. RBC GAM may, at its discretion and without notice to unitholders, waive or absorb certain operating expenses. MER includes the waiver or absorption by RBC GAM of certain operating expenses, while the MER before absorption shows the MER prior to operating expenses being waived or absorbed by RBC GAM.

2 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The trading expense ratio is not applicable to fixed-income transactions.

3 The ETF’s portfolio turnover rate gives an indication of the level of activity employed by the portfolio manager. A portfolio turnover rate of 100% is equivalent to the ETF buying and selling all of the securities in its portfolio once in the course of the year. The higher the ETF’s portfolio turnover rate in a year, the greater the trading costs payable by the ETF in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the ETF.

4 From January 15, 2014.

Management Fees RBC GAM is the manager, trustee and portfolio manager of the ETF. A management fee is not charged directly to the ETF as this ETF invests in the units of other RBC ETFs. It pays management fees indirectly because the ETFs in which it invests pay management fees.


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SUMMARY OF INVESTMENT PORTFOLIO(after consideration of derivative products, if any)As at December 31, 2016

Investment Mix % of Net Asset Value

Corporate Bonds Financials 61.4 Communication 11.7 Infrastructure 8.0 Energy 7.3 Industrials 4.8 Real Estate 2.0Provincial Bonds 4.7Other Net Assets 0.1

Top 25 Holdings* % of Net Asset Value

RBC Target 2018 Corporate Bond Index ETF 20.0RBC Target 2019 Corporate Bond Index ETF 20.0RBC Target 2020 Corporate Bond Index ETF 20.0RBC Target 2021 Corporate Bond Index ETF 20.0RBC Target 2022 Corporate Bond Index ETF 20.0 Total 100.0

* The ETF holds fewer than 25 holdings.

The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the ETF and a quarterly update is available at www.rbcgam.com/etfs.

The Simplified Prospectus and other information about the underlying funds are available on SEDAR website at www.sedar.com.


PAST PERFORMANCEThe performance information shown assumes that all distributions made by the ETF in the periods shown were reinvested in additional units of the ETF and would be lower if distributions were not reinvested. The performance information does not take into account sales, redemption, distribution, optional charges or income taxes payable that would have reduced returns or performance. Past performance does not necessarily indicate how the ETF may perform in the future. A fund with more than 10 years of performance history is only permitted to disclose the past 10 years.

Year-by-Year Returns (%) The bar chart indicates the ETF’s performance for each of the years shown, and illustrates how the ETF’s performance has changed from year to year. The bar chart shows, in percentage terms, how much an investment made on the first day of each financial year would have grown or decreased by the end of the financial year.

Annual Compound Returns (%)The table shows the annual compound returns of the ETF for each of the periods indicated ended on December 31, 2016, compared with the following benchmarks:

FTSE TMX Canada Short Term Corporate Bond Index

The broad-based index is the FTSE TMX Canada All Corporate Bond Index.

Past Past Past Past Since Year 3 Years 5 Years 10 Years Inception

RBC 1-5 Year ETF 2.2 – – – 2.4Benchmark 2.3 – – – 2.6Broad-based index 3.7 – – – 3.9

The Benchmark and broad-based index returns do not include any costs of investing. See Management Discussion of Fund Performance for a discussion of performance relative to the Benchmark and broad-based indexes.

The ETF’s units have been available for sale to unitholders since January 15, 2014.

Inception dates are not provided for Funds that have been in existence for more than 10 years.

INDEX DESCRIPTIONS FTSE TMX Canada Short Term Corporate Bond Index This index measures the performance of investment-grade Canadian corporate bonds with terms to maturity of more than one year and fewer than five years.FTSE TMX Canada All Corporate Bond Index This index is a broad measure of the performance of investment-grade Canadian bonds issued by corporations. The index includes bonds with terms to maturity of at least one year.

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FIXED-INCOME ETF

RBC 1-5 YEAR LADDERED CANADIAN BOND ETF

December 31, 2016








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Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure primarily to the performance of a diversified portfolio of Canadian corporate and government bonds, divided (“laddered”) into five groupings with staggered maturities from one to five years, which will provide regular income while preserving capital.

The ETF will achieve exposure to Canadian corporate and government bonds primarily by investing in a portfolio of five equally weighted sub-portfolios, each of which is targeted to provide at least 30% exposure to government bonds and no more than 70% exposure to corporate bonds. The portfolios may deviate at times from their targeted weights due to market fluctuations between rebalance periods. The government bond exposure will be obtained by direct investment in one or more government bonds. The decision to invest in each government bond is based on RBC GAM’s assessment of each bond’s term to maturity, credit quality, yield to maturity and an overall emphasis on issuer diversification. The corporate bond exposure will be obtained primarily by investing in an appropriate RBC Target Maturity Corporate Bond ETF. Each sub-portfolio will have remaining terms to maturity ranging from one to five years. At the end of each year, the nearest term sub-portfolio will be sold and proceeds rolled into a new five-year sub-portfolio in order to maintain the one to five year ladder. The portfolio holdings will be rebalanced on a quarterly basis. The frequency of the rebalancing may change without notice.


Results of OperationsThe ETF was launched on January 25, 2016, and its net asset value was $125 million as of December 31, 2016. Investment performance is not provided for an ETF that has been available for less than one year.








Brokers and Dealers The ETF has established standard brokerage and dealing agreements at market rates with related parties. These related-party commissions were $17,000 or 43% of the total transaction costs paid for this ETF.






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RBC 1-5 Year Can. ETFDec. 31, 20163 20.00† 0.62 (0.02) (0.18) (0.30) 0.12 (0.55) – – (0.01) (0.56) 19.69





RBC 1-5 Year Can. ETFDec. 31, 20164 125 017 6 350 0.24 0.24 0.03 79.61 19.69 19.66





Management Fees RBC GAM is the manager, trustee and portfolio manager of the ETF. A management fee is charged indirectly and directly to the ETF: indirectly as this ETF invests in the units of other RBC ETFs and the other RBC ETFs pay management fees; and directly for other portfolio manager activities. The total management fee will not exceed 0.22%, before GST/HST, of the daily net asset value of the ETF.

PAST PERFORMANCEInvestment performance in respect of a fund that has been available for less than one year is not provided. The ETF was launched January 2016.


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Corporate Bonds Financials 42.7 Communication 8.2 Infrastructure 5.6 Energy 5.1 Industrials 3.4 Real Estate 1.4Federal and Provincial Bonds 33.3Other Net Assets 0.3


RBC Target 2018 Corporate Bond Index ETF 14.0RBC Target 2019 Corporate Bond Index ETF 14.0RBC Target 2020 Corporate Bond Index ETF 13.9RBC Target 2022 Corporate Bond Index ETF 13.9RBC Target 2021 Corporate Bond Index ETF 13.9Province of Ontario 3.15% Jun 02, 2022 6.0Canada Housing Trust No. 1 1.95% Jun 15, 2019 6.0Canadian Government Bond 4.25% Jun 01, 2018 6.0Province of Alberta 1.25% Jun 01, 2020 3.0Province of British Columbia 3.25% Dec 18, 2021 3.0Province of Quebec 4.5% Dec 01, 2020 3.0Province of Quebec 4.25% Dec 01, 2021 3.0Total 99.7





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FIXED-INCOME ETF

RBC TARGET 2017 CORPORATE BOND INDEX ETF

December 31, 2016








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Investment Objective and StrategiesThe ETF seeks to provide income for a limited period of time ending on its termination date by replicating, to the extent possible, the investment results that correspond generally to the performance, before fees and expenses, of the FTSE TMX Canada 2017 Maturity Corporate Bond Index*. The FTSE TMX Canada 2017 Maturity Corporate Bond Index is designed to represent the performance of a held-to-maturity portfolio consisting of, primarily, Canadian dollar-denominated investment grade corporate bonds with effective maturities in 2017.

The ETF intends to invest at least 90% of its assets in and hold the securities that comprise the FTSE TMX Canada 2017 Maturity Corporate Bond Index and/or securities that have economic characteristics that are substantially similar to those that comprise the index.


Results of OperationsThe ETF’s net asset value fell to $46 million as of December 31, 2016, from $77 million at the end of 2015. The decrease was due to net redemptions.


Corporate bonds with one year left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.


Recent DevelopmentsThe ETF has entered its maturity year. Proceeds from maturing bonds will be reinvested into Government of Canada T-bills.

In the view of the portfolio manager, corporate bonds could benefit from stronger U.S. economic growth in 2017 given the probability of increased fiscal spending and regulatory rollbacks under a new administration. Assuming the Canadian dollar does not rise significantly, the economic outlook in Canada will depend on the strength of manufactured exports and services, the impact of fiscal stimulus, and any slowdown in housing activity. In the portfolio manager’s view, uncomfortably high domestic consumer-debt levels mean that the Bank of Canada is likely to keep interest rates unchanged in 2017, while the U.S. Federal Reserve is expected to raise rates during the year.

Effective January 1, 2017, as the ETF entered its maturity year, the maximum management fee of the ETF declined from 0.25% to 0.20% of net asset value.



Related-Party TransactionsManager, Trustee and Portfolio ManagerRBC GAM is an indirect, wholly owned subsidiary of Royal Bank of Canada (“Royal Bank”) and is the manager, trustee and portfolio manager of the ETF. RBC GAM is responsible for the ETF’s day-to-day


* “FTSE TMX Canada 2017 Maturity Corporate Bond Index” is a trademark of FTSE TMX Debt Capital Markets Inc. (“FTDCM”). “TMX” is a trademark of TSX Inc. (“TSX”) and is used under licence. “FTSE” is a trademark of the London Stock Exchange Group companies (the “Exchange”) and is used by FTDCM under licence. The “FTSE TMX Canada 2017 Maturity Corporate Bond Index” trademark has been licensed for use for certain purposes to RBC GAM. The RBC ETFs are not sponsored, endorsed, sold or promoted by FTDCM, FTSE International Limited, the Exchange or TSX (together, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the index and/or the figure at which the said index stands at any particular time on any particular day or otherwise. The index is compiled and calculated by FTDCM and all copyright in the index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the index and the Licensor Parties shall not be under any obligation to advise any person of any error therein.

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operations, holds title to the ETF’s property on behalf of its unitholders, and provides investment advice and portfolio management services to the ETF. RBC GAM is paid a management fee by the ETF as compensation for its services.









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RBC 2017 ETFDec. 31, 2016 19.53 0.75 (0.05) (0.48) 0.06 0.28 (0.74) – – – (0.74) 19.06 Dec. 31, 2015 19.82 0.78 (0.05) (0.03) (0.33) 0.37 (0.70) – – – (0.70) 19.53 Dec. 31, 2014 19.87 0.80 (0.06) (0.02) (0.16) 0.56 (0.70) – – – (0.70) 19.82 Dec. 31, 2013 20.14 0.82 (0.07) – (0.32) 0.43 (0.73) – – (0.01) (0.74) 19.84 Dec. 31, 2012 19.90 0.82 (0.07) 0.02 0.18 0.95 (0.75) – – – (0.75) 20.14


2 Distributions are either paid in cash, reinvested in additional units of the ETF, or both.



RBC 2017 ETFDec. 31, 2016 45 738 2 400 0.28 0.28 – 31.89 19.06 19.07 Dec. 31, 2015 77 131 3 950 0.28 0.28 – 5.67 19.53 19.50Dec. 31, 2014 54 495 2 750 0.28 0.28 – 11.12 19.82 19.83Dec. 31, 2013 23 849 1 200 0.34 0.34 – 12.44 19.87 20.00 Dec. 31, 2012 16 674 826 0.34 0.34 – 40.53 20.19 20.31





Management Fees RBC GAM is the manager, trustee and portfolio manager of the ETF. The management fee of the ETF is calculated at the annual percentage, before GST/HST, of the daily net asset value of the ETF.

Management Fees

RBC 2017 ETF up to 0.25%

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FTSE TMX Canada 2017 Maturity Corporate Bond Index

The broad-based index is the FTSE TMX Canada Universe Bond Index.


RBC 2017 ETF 1.4 2.3 2.8 – 3.0Benchmark 1.6 2.5 3.1 – 3.2Broad-based index 1.7 4.6 3.2 – 3.5


The ETF’s units have been available for sale to unitholders since September 15, 2011.


INDEX DESCRIPTIONS FTSE TMX Canada 2017 Maturity Corporate Bond Index This index is designed to measure the performance of a held-to-maturity portfolio consisting primarily of Canadian-dollar-denominated investment-grade corporate bonds maturing in 2017.FTSE TMX Canada Universe Bond Index This index is designed as a broad measure of the Canadian investment-grade fixed-income market and includes bonds with maturities of at least one year.




Corporate Bonds Financials 74.8 Communication 11.0 Infrastructure 9.5 Industrials 1.8 Energy 1.7Other Net Assets 1.2

Top 25 Holdings % of Net Asset Value

Royal Bank of Canada 3.66% Jan 25, 2017 7.5The Toronto-Dominion Bank, FRN 5.763% Dec 18, 2106 7.3Bank of Nova Scotia 4.1% Jun 08, 2017 6.2HSBC Bank Canada 3.558% Oct 04, 2017 5.9Canadian Imperial Bank of Commerce 3.95% Jul 14, 2017 5.5Bank of Montreal 2.24% Dec 11, 2017 5.0Canadian Imperial Bank of Commerce 2.35% Oct 18, 2017 4.8Bank of Nova Scotia, FRN 2.898% Aug 03, 2022 4.1Sun Life Financial Inc., FRN 4.38% Mar 02, 2022 4.1TELUS Corp. 4.95% Mar 15, 2017 3.9Hydro One Inc. 5.18% Oct 18, 2017 3.6Caisse Centrale Desjardins 3.502% Oct 05, 2017 3.5National Bank of Canada 2.689% Aug 21, 2017 3.5Manufacturers Life Insurance Co. FRN 4.165% Jun 01, 2022 2.9Ford Credit Canada Ltd. 4.875% Feb 08, 2017 2.9Bank of Montreal 5.45% Jul 17, 2017 2.8Rogers Communications Inc. 3% Jun 06, 2017 2.7Greater Toronto Airports Authority 4.85% Jun 01, 2017 2.6VW Credit Canada Inc. 2.45% Nov 14, 2017 2.6HSBC Bank Canada, FRN 4.8% Apr 10, 2022 2.4Shaw Communications Inc. 5.7% Mar 02, 2017 2.2Bank of Montreal 4.55% Aug 01, 2017 2.1Bell Canada 4.37% Sep 13, 2017 2.1407 International Inc. 3.87% Nov 24, 2017 1.8Alimentation Couche-Tard Inc. 2.861% Nov 01, 2017 1.8Top 25 Holdings 93.8


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FIXED-INCOME ETF


December 31, 2016








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Results of OperationsThe ETF’s net asset value rose to $112 million as of December 31, 2016, from $75 million at the end of 2015. The increase was due to net inflows.


Corporate bonds with two years left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.








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RBC 2018 ETFDec. 31, 2016 19.81 0.72 (0.05) (0.03) (0.31) 0.33 (0.65) – – – (0.65) 19.49 Dec. 31, 2015 19.93 0.73 (0.06) 0.01 (0.24) 0.44 (0.66) – – – (0.66) 19.81 Dec. 31, 2014 19.62 0.74 (0.06) – 0.16 0.84 (0.65) – – – (0.65) 19.93 Dec. 31, 2013 20.09 0.89 (0.07) (0.13) (0.47) 0.22 (0.81) – – – (0.81) 19.58 Dec. 31, 2012 19.82 0.93 (0.07) – 0.32 1.18 (0.87) – – – (0.87) 20.09





RBC 2018 ETFDec. 31, 2016 112 073 5 750 0.28 0.28 – 10.22 19.49 19.45 Dec. 31, 2015 75 279 3 800 0.28 0.28 – 5.16 19.81 19.83Dec. 31, 2014 45 850 2 300 0.29 0.29 – 0.72 19.93 19.94Dec. 31, 2013 19 622 1 000 0.34 0.34 – 74.31 19.62 19.75 Dec. 31, 2012 12 194 606 0.34 0.34 – 24.79 20.14 20.16






Management Fees


19
















Corporate Bonds Financials 70.3 Infrastructure 9.3 Communication 6.3 Industrials 6.1 Energy 3.9 Real Estate 2.9Other Net Assets 1.2


Wells Fargo Canada Corp. 2.78% Nov 15, 2018 5.7HSBC Bank Canada 2.078% Nov 26, 2018 5.7Royal Bank of Canada 3.77% Mar 30, 2018 5.1Bank of Montreal 3.21% Sep 13, 2018 4.8Bank of Nova Scotia 2.242% Mar 22, 2018 4.5Hydro One Inc. 2.78% Oct 09, 2018 4.3Bank of Nova Scotia 2.75% Aug 13, 2018 4.3National Bank of Canada 2.794% Aug 09, 2018 4.3Bank of Montreal, FRN 6.17% Mar 28, 2023 4.3Royal Bank of Canada 2.89% Oct 11, 2018 4.2Toronto-Dominion Bank, FRN 5.828% Jul 09, 2023 3.4American Express Canada Credit Corp. 2.31% Mar 29, 2018 3.3Great-West Lifeco Finance Delaware LP II, FRN 7.127% Jun 26, 2068 3.0Greater Toronto Airports Authority 5.26% Apr 17, 2018 2.9Bell Canada 4.4% Mar 16, 2018 2.9Ford Credit Canada Ltd. 3.7% Aug 02, 2018 2.9Toyota Credit Canada Inc. 2.8% Nov 21, 2018 2.9bcIMC Realty Corp. 2.79% Aug 02, 2018 2.9Toyota Credit Canada Inc. 2.75% Jul 18, 2018 2.8Sobeys Inc. 3.52% Aug 08, 2018 2.8Canadian Imperial Bank of Commerce, FRN 6% Jun 06, 2023 2.7Bell Canada 3.5% Sep 10, 2018 2.3Dollarama Inc. 3.095% Nov 05, 2018 2.3Manulife Financial Corp. 5.505% Jun 26, 2018 2.3Suncor Energy Inc. 5.8% May 22, 2018 2.0Top 25 Holdings 88.6


20


FIXED-INCOME ETF


December 31, 2016








21








Corporate bonds with three years left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.








22











23






RBC 2019 ETFDec. 31, 2016 20.15 0.84 (0.06) (0.04) (0.26) 0.48 (0.76) – – – (0.76) 19.88 Dec. 31, 2015 20.27 0.83 (0.06) (0.01) (0.23) 0.53 (0.76) – – – (0.76) 20.15 Dec. 31, 2014 19.77 0.87 (0.06) – 0.27 1.08 (0.76) – (0.01) – (0.77) 20.27 Dec. 31, 2013 20.28 0.89 (0.07) (0.01) (0.61) 0.20 (0.80) – – – (0.80) 19.72 Dec. 31, 2012 19.96 0.92 (0.07) 0.07 0.16 1.08 (0.87) – – – (0.87) 20.28





RBC 2019 ETFDec. 31, 2016 127 224 6 400 0.28 0.28 – 18.51 19.88 19.85 Dec. 31, 2015 90 666 4 500 0.28 0.28 – 15.33 20.15 20.10Dec. 31, 2014 60 811 3 000 0.28 0.28 – 20.04 20.27 20.28 Dec. 31, 2013 21 747 1 100 0.33 0.33 – 8.02 19.77 19.85 Dec. 31, 2012 14 352 706 0.33 0.33 – 59.92 20.34 20.36






Management Fees


24
















Corporate Bonds Financials 58.3 Infrastructure 11.3 Energy 11.3 Industrials 9.7 Communication 8.4Other Net Assets 1.0


Wells Fargo Canada Corp. 2.944% Jul 25, 2019 10.0Bank of Nova Scotia, FRN 3.036% Oct 18, 2024 10.0National Bank of Canada 2.404% Oct 28, 2019 9.5Shaw Communications Inc. 5.65% Oct 01, 2019 6.3Greater Toronto Airports Authority 5.96% Nov 20, 2019 6.3Brookfield Asset Management Inc. 3.95% Apr 09, 2019 5.8Royal Bank of Canada 2.98% May 07, 2019 5.2Royal Bank of Canada, FRN 2.99% Dec 06, 2024 4.8Manulife Financial Corp. 7.768% Apr 08, 2019 4.8Enbridge Inc. 4.77% Sep 02, 2019 4.0IGM Financial Inc. 7.35% Apr 08, 2019 3.8CU Inc. 6.8% Aug 13, 2019 3.1Canadian Imperial Bank of Commerce 2.35% Jun 24, 2019 3.0Sun Life Financial Inc. 5.7% Jul 02, 2019 2.9NAV Canada 5.304% Apr 17, 2019 2.5Toronto Hydro Corp. 4.49% Nov 12, 2019 2.5Cameco Corp. 5.67% Sep 02, 2019 2.5Intact Financial Corp. 5.41% Sep 03, 2019 2.4Fairfax Financial Holdings Ltd. 7.5% Aug 19, 2019 2.1Enbridge Pipelines Inc. 4.49% Nov 12, 2019 1.8SNC-Lavalin Group Inc. 6.19% Jul 03, 2019 1.5TransAlta Corp. 6.4% Nov 18, 2019 1.4Rogers Communications Inc. 5.38% Nov 04, 2019 1.4Westcoast Energy Inc. 5.6% Jan 16, 2019 0.9TELUS Corp. 5.05% Dec 04, 2019 0.8Top 25 Holdings 99.3


25


FIXED-INCOME ETF


December 31, 2016








26








Corporate bonds with four years left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.








27











28






RBC 2020 ETFDec. 31, 2016 20.52 0.63 (0.06) (0.01) (0.11) 0.45 (0.56) – – – (0.56) 20.47 Dec. 31, 2015 20.49 0.70 (0.06) (0.06) (0.26) 0.32 (0.63) – – – (0.63) 20.52 Dec. 31, 2014 19.81 0.84 (0.06) (0.03) 0.62 1.37 (0.76) – – – (0.76) 20.49 Dec. 31, 2013 20.55 0.88 (0.07) (0.10) (0.69) 0.02 (0.80) – – – (0.80) 19.77 Dec. 31, 2012 20.07 0.88 (0.07) 0.08 0.42 1.31 (0.83) – – – (0.83) 20.55





RBC 2020 ETFDec. 31, 2016 94 176 4 600 0.28 0.28 – 14.05 20.47 20.45 Dec. 31, 2015 58 490 2 850 0.29 0.29 – 49.49 20.52 20.51Dec. 31, 2014 14 343 700 0.29 0.29 – 31.67 20.49 20.51Dec. 31, 2013 9 904 500 0.34 0.34 – 43.34 19.81 19.85 Dec. 31, 2012 10 295 500 0.34 0.34 – 29.30 20.59 20.63






Management Fees


29
















Corporate Bonds Financials 74.9 Communication 10.1 Energy 6.4 Infrastructure 4.1 Real Estate 1.9 Industrials 1.7Other Net Assets 0.9


Royal Bank of Canada 1.92% Jul 17, 2020 9.3Caisse Centrale Desjardins 1.748% Mar 02, 2020 8.3Bank of Nova Scotia 2.27% Jan 13, 2020 7.6Toronto-Dominion Bank 2.563% Jun 24, 2020 7.2Bank of Montreal 2.84% Jun 04, 2020 7.0HSBC Bank Canada 2.938% Jan 14, 2020 6.7National Bank of Canada 1.742% Mar 03, 2020 6.2Capital Desjardins Inc. 5.187% May 05, 2020 6.1Great-West Lifeco Inc. 4.65% Aug 13, 2020 3.4Enbridge Inc. 4.53% Mar 09, 2020 3.3Thomson Reuters Corp. 4.35% Sep 30, 2020 3.3General Motors Financial of Canada Ltd. 3.08% May 22, 2020 3.1Sun Life Financial Inc. FRN 2.6% Sep 25, 2025 3.1Rogers Communications Inc. 4.7% Sep 29, 2020 3.0Enbridge Pipelines Inc. 4.45% Apr 06, 2020 2.3407 International Inc. 4.99% Jun 16, 2020 2.0TELUS Corp. 5.05% Jul 23, 2020 2.0Hydro One Inc. 4.4% Jun 01, 2020 2.0Bank of Nova Scotia 2.09% Sep 09, 2020 1.9OMERS Realty Corp. 3.203% Jul 24, 2020 1.9Shaw Communications Inc. 5.5% Dec 07, 2020 1.7HSBC Bank Canada 1.816% Jul 07, 2020 1.5Genworth MI Canada Inc. 5.68% Jun 15, 2020 1.5Loblaw Companies Ltd. 5.22% Jun 18, 2020 1.2Toronto-Dominion Bank 1.693% Apr 02, 2020 1.1Top 25 Holdings 96.7


30


FIXED-INCOME ETF


December 31, 2016








31








Corporate bonds with five years left until maturity posted percentage gains in the low single digits. Yields on short-term government bonds touched their lows in the first quarter of 2016, shortly after oil prices and the Canadian dollar set their lows for the year. In a sign that investors were seeking to avoid risk, yields on corporate bonds rose to their highs for the year relative to government bonds. However, corporate and other non-government bonds outperformed government bonds over the remainder of the year as demand for corporate bonds outpaced supply and the outlook for growth and commodity prices improved.








32











33






RBC 2021 ETFDec. 31, 2016 20.21 0.68 (0.06) 0.03 (0.14) 0.51 (0.61) – (0.02) – (0.63) 20.24 Dec. 31, 2015 20.13 0.73 (0.06) (0.01) 0.01 0.67 (0.56) – – (0.09) (0.65) 20.21 Dec. 31, 2014 19.17 0.78 (0.06) 0.03 0.63 1.38 (0.68) – – (0.02) (0.70) 20.13 Dec. 31, 2013 19.93 0.81 (0.07) (0.07) (0.77) (0.10) (0.77) – – – (0.77) 19.12 Dec. 31, 20123 20.00† 0.20 (0.02) – 0.03 0.21 (0.17) – – – (0.17) 19.93


2 Distributions are either paid in cash, reinvested in additional units of the ETF, or both.3 From October 10, 2012.† Initial offering net asset value per unit.



RBC 2021 ETFDec. 31, 2016 90 047 4 450 0.28 0.28 – 58.14 20.24 20.15 Dec. 31, 2015 46 475 2 300 0.28 0.28 – 34.15 20.21 20.24Dec. 31, 2014 9 060 450 0.29 0.29 – 63.45 20.13 20.51Dec. 31, 2013 3 834 200 0.34 0.34 – 10.97 19.17 19.26 Dec. 31, 20124 3 995 200 0.34 0.34 – – 19.98 20.05




4 From October 10, 2012.


34


FINANCIAL HIGHLIGHTS (cont.)


Management Fees









RBC 2021 ETF 3.2 5.1 – – 3.7Benchmark 3.5 5.5 – – 4.0Broad-based index 1.7 4.6 – – 3.1


The ETF’s units have been available for sale to unitholders since October 10, 2012.



35





Corporate Bonds Financials 66.2 Communication 11.2 Energy 7.6 Infrastructure 6.1 Real Estate 5.3 Industrials 2.8Other Net Assets 0.8


Royal Bank of Canada 1.583% Sep 13, 2021 6.7Ford Credit Canada Ltd. 2.58% May 10, 2021 5.9National Bank of Canada 1.809% Jul 26, 2021 5.9HSBC Bank Canada 2.908% Sep 29, 2021 5.7Thomson Reuters Corp. 3.309% Nov 12, 2021 4.6Bank of Montreal 3.4% Apr 23, 2021 4.4TransCanada PipeLines Ltd. 3.65% Nov 15, 2021 4.3Rogers Communications Inc. 5.34% Mar 22, 2021 4.3Capital Desjardins Inc., FRN 4.954% Dec 15, 2026 4.1Daimler Canada Finance Inc. 1.91% Jul 08, 2021 3.9407 International Inc. 4.3% May 26, 2021 3.5Enbridge Inc. 3.16% Mar 11, 2021 3.3Toyota Credit Canada Inc. 2.2% Feb 25, 2021 3.2Honda Canada Finance Inc. 2.155% Feb 18, 2021 3.2Honda Canada Finance Inc. 1.823% Dec 07, 2021 3.1Bank of Nova Scotia 3.27% Jan 11, 2021 2.9Sun Life Financial Inc. FRN 3.1% Feb 19, 2026 2.9Wells Fargo Canada Corp. 3.04% Jan 29, 2021 2.9Royal Bank of Canada 2.86% Mar 04, 2021 2.8bcIMC Realty Corp. 2.1% Jun 03, 2021 2.8Brookfield Asset Management Inc. 5.3% Mar 01, 2021 2.8Bank of Nova Scotia 2.873% Jun 04, 2021 2.7Sun Life Financial Inc. 4.57% Aug 23, 2021 2.6Toronto Hydro Corp. 3.54% Nov 18, 2021 2.6OMERS Realty Corp. 2.971% Apr 05, 2021 2.5Top 25 Holdings 93.6


36


FIXED-INCOME ETF


December 31, 2016








37






Results of OperationsThe ETF was launched on September 20, 2016, and its net asset value was $62 million as of December 31, 2016. Investment performance is not provided for an ETF that has been available for less than one year.













38




39






RBC 2022 ETFDec. 31, 20163 20.00† 0.21 (0.02) – (0.41) (0.22) (0.10) – – (0.03) (0.13) 19.67


2 Distributions are either paid in cash, reinvested in additional units of the ETF, or both.3 From September 14, 2016.† Initial offering net asset value per unit.



RBC 2022 ETFDec. 31, 20164 61 953 3 150 0.29 0.29 – 0.04 19.67 19.70




4 From September 14, 2016.



Management Fees


PAST PERFORMANCEInvestment performance in respect of a fund that has been available for less than one year is not provided. The ETF was launched September 2016.

40




Corporate Bonds Financials 34.4 Communication 22.1 Infrastructure 8.7 Energy 7.1 Industrials 3.6Provincial Bonds 23.5Other Net Assets 0.6


Bank of Montreal 2.12% Mar 16, 2022 10.0Royal Bank of Canada 1.968% Mar 02, 2022 9.9Province of Alberta 2.55% Dec 15, 2022 9.9Province of Quebec 3.5% Dec 01, 2022 9.8Manufacturers Life Insurance Co., FRN 3.181% Nov 22, 2027 8.5Bell Canada Inc. 3% Oct 03, 2022 8.5TELUS Corp. 2.35% Mar 28, 2022 8.2National Bank of Canada 2.105% Mar 18, 2022 6.2Rogers Communications Inc. 4% Jun 06, 2022 5.4Hydro One Inc. 3.2% Jan 13, 2022 5.3North West Redwater Partnership/NWR Financing Co., Ltd. 2.1% Feb 23, 2022 4.2Province of British Columbia 2.7% Dec 18, 2022 3.8Magna International Inc. 3.1% Dec 15, 2022 3.5Greater Toronto Airports Authority 3.04% Sep 21, 2022 3.4Enbridge Inc. 3.19% Dec 05, 2022 2.9Total 99.5




41


FIXED-INCOME ETF


December 31, 2016








42



















43




44






RBC 2023 ETFDec. 31, 20163 20.00† 0.24 (0.02) (0.06) (0.48) (0.32) (0.16) – – (0.02) (0.18) 19.56





RBC 2023 ETFDec. 31, 20164 3 912 200 0.29 0.29 – 11.25 19.56 19.61







Management Fees



45




Corporate Bonds Financials 16.1 Energy 15.3 Communication 12.2 Industrials 10.5 Real Estate 10.1 Infrastructure 6.4Provincial Bonds 28.4Other Net Assets 1.0


Toronto-Dominion Bank 1.909% Jul 18, 2023 9.8TransCanada Pipelines Ltd. 3.69% Jul 19, 2023 9.7Province of New Brunswick 2.85% Jun 02, 2023 9.5Province of Manitoba 2.55% Jun 02, 2023 9.5Province of Quebec 3% Sep 01, 2023 9.3Brookfield Asset Management Inc. 4.54% Mar 31, 2023 7.3AltaLink LP 3.668% Nov 06, 2023 6.5Wells Fargo Canada Corp. 3.46% Jan 24, 2023 6.4OMERS Realty Corp. 3.358% Jun 05, 2023 6.3TELUS Corp. 3.35% Mar 15, 2023 6.2Enbridge Inc. 3.94% Jun 30, 2023 5.7First Capital Realty Inc. 3.9% Oct 30, 2023 3.7Bell Canada Inc. 3.35% Mar 22, 2023 3.6Loblaw Companies Ltd. 4.86% Sep 12, 2023 3.2Bell Canada Inc. 4.7% Sep 11, 2023 2.3Total 99.0




46


CANADIAN EQUITY ETF

RBC CANADIAN PREFERRED SHARE ETF

December 31, 2016








47



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of primarily Canadian preferred share securities that will provide regular income and that have the potential for long-term capital growth.

The ETF invests primarily in an actively managed portfolio of rate reset preferred shares issued by Canadian companies, selected on the basis of fundamental analysis, credit research and interest rate sensitivity analysis. The ETF may also hold preferred shares issued by Canadian companies that are not rate reset preferred shares, fixed-income securities issued by Canadian governments or companies, dividend-paying common stock from Canadian issuers or preferred shares from U.S. issuers, as well as other Canadian listed exchange-traded funds. Some of the Canadian listed preferred shares in which the ETF invests may be denominated in U.S. dollars. The ETF may also hold money market instruments and cash.

The ETF may use derivative instruments for hedging purposes, for example, to hedge its U.S. dollar exposure back to the Canadian dollar.



Recent DevelopmentsPreferred shares whose payouts vary with interest rates (“resets”) benefited from a rise in interest rates in the fourth quarter, and would benefit from further interest-rate increases in 2017 as economic growth accelerates. In this environment, the portfolio manager expects valuations of preferred shares to improve with rising corporate profits.

Investors should be mindful, however, that further monetary easing in Canada cannot be ruled out if exports falter, fiscal stimulus fails to impress and/or efforts to cool housing markets in Vancouver and Toronto curb consumer optimism more than desired. The resulting lower yields from further monetary easing would be negative for prices of resets, which make up virtually all of the ETF’s assets.












48




49






RBC Can. Preferred Share ETFDec. 31, 20163 20.00† 0.45 (0.06) 0.08 2.85 3.32 – (0.12) (0.06) (0.07) (0.25) 21.79





RBC Can. Preferred Share ETFDec. 31, 20164 147 358 6 764 0.62 0.62 0.09 23.38 21.79 21.80






Management Fees

RBC Can. Preferred Share ETF 0.53%



50





Canadian Equities Financials 55.1 Energy 23.7 Utilities 13.6 Telecommunication Services 3.4 Real Estate 3.3 Consumer Discretionary 0.3 Other Net Assets 0.6


National Bank of Canada, Preferred Series 30, 4.100% 1.6Toronto-Dominion Bank, Preferred Series 14, 4.850% 1.6Royal Bank of Canada, Preferred Series BK, 5.500% 1.6Royal Bank of Canada, Preferred Series AZ, 4.000% 1.6Toronto-Dominion Bank, Preferred Series 12, 5.500% 1.5Royal Bank of Canada, Preferred Series BM, 5.500% 1.5Canadian Utilities Ltd., Preferred Series Y, 4.000% 1.4Enbridge Inc., Preferred Series B, 4.000% 1.4TransCanada Corp., Preferred Series 13, 5.500% 1.4Emera Inc., Preferred Series C, 4.100% 1.3BCE Inc., Preferred Series AK, 4.150% 1.3Enbridge Inc., Preferred Series F, 4.000% 1.3Intact Financial Corp., Preferred Series 1, 4.200% 1.3Bank of Montreal, Preferred Series 27, 4.000% 1.3Royal Bank of Canada, Preferred Series BD, 3.600% 1.3Manulife Financial Corporation, Preferred Series 1-7, 4.600% 1.3Manulife Financial Corporation, Preferred Series 9, 4.400% 1.2Fairfax Financial Holdings Ltd., Preferred Series K, 5.000% 1.2BCE Inc., Preferred Series AQ, 4.250% 1.2Enbridge Inc., Preferred Series D, 4.000% 1.2Toronto-Dominion Bank, Preferred Series 5, 3.750% 1.2Enbridge Inc., Preferred Series N, 4.000% 1.2TransCanada Corp., Preferred Series 7, 4.000% 1.1Fortis Inc., Preferred Series M, 4.100% 1.1Fortis Inc., Preferred Series G, 5.250% 1.1Top 25 Holdings 33.2


51


CANADIAN EQUITY ETF

RBC QUANT CANADIAN DIVIDEND LEADERS ETF

December 31, 2016








52



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality Canadian dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the RBC Quant Canadian Dividend Leaders ETF will be selected using a rules-based, multifactor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced initially on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.


Results of OperationsThe ETF’s net asset value rose to $109 million as of December 31, 2016, from $61 million at the end of 2015. The increase was due to a combination of net inflows and investment returns.

Over the past year, the ETF’s units gained 21.0%, which underperformed the 21.1% rise in the benchmark. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to Valeant Pharmaceuticals, TMX Group and Inter Pipeline had the most positive impact on the ETF’s returns, while Bank of Nova Scotia, Barrick Gold and Toronto-Dominion Bank were negative for performance. The ETF had the highest relative exposure to Intact Financial, Canadian Imperial Bank of Commerce and Cineplex, and the smallest relative exposure to Bank of Nova Scotia, Canadian National Railway and Bank of Montreal.

At the sector level, the ETF had the highest relative weightings in Financials, Real Estate and Utilities, and lowest relative exposure to Materials, Consumer Staples and Industrials.

Recent DevelopmentsThere have been no material changes to the ETF’s strategy. The ETF will continue to hold stocks that pass the strategy’s quantitative screening process and sell positions in stocks that no longer meet the requirements.









53








54






Canadian Dividend ETFDec. 31, 2016 17.74 0.82 (0.09) – 3.06 3.79 – (0.67) (0.04) (0.04) (0.75) 20.64 Dec. 31, 2015 20.44 0.85 (0.10) (1.17) (1.69) (2.11) – (0.68) – (0.09) (0.77) 17.74 Dec. 31, 20143 20.00† 0.90 (0.10) 0.51 (2.20) (0.89) – (0.52) (0.31) (0.04) (0.87) 20.44





Canadian Dividend ETFDec. 31, 2016 109 386 5 300 0.43 0.43 0.06 54.10 20.64 20.67 Dec. 31, 2015 61 195 3 450 0.43 0.43 0.09 67.74 17.74 18.01Dec. 31, 20144 47 010 2 300 0.44 0.44 – 44.85 20.44 20.39






Management Fees

Canadian Dividend ETF 0.39%


55




Canadian Equities Financials 26.6 Energy 21.3 Real Estate 20.8 Telecommunication Services 10.5 Utilities 9.2 Materials 4.4 Consumer Discretionary 2.7 Industrials 2.6 Consumer Staples 0.5 Health Care 0.4 Information Technology 0.2 Other Net Assets 0.8


Royal Bank of Canada 6.0BCE Inc. 4.2Canadian Imperial Bank of Commerce 4.1TELUS Corp. 3.4Rogers Communications Inc., Class B 3.0Cineplex Inc. 2.7Intact Financial Corp. 2.7Pembina Pipeline Corp. 2.6CI Financial Corp. 2.5Great-West Lifeco Inc. 2.5RioCan Real Estate Investment Trust 2.4Power Financial Corp. 2.3H&R Real Estate Investment Trust 2.2Brookfield Property Partners LP 2.2Inter Pipeline Ltd. 2.2Industrial Alliance Insurance & Financial Services Inc. 2.0Keyera Corp. 1.9Canadian Apartment Properties Real Estate Investment Trust 1.9Smart Real Estate Investment Trust 1.9Canadian Real Estate Investment Trust 1.7Allied Properties Real Estate Investment Trust 1.7IGM Financial Inc. 1.7Canadian Natural Resources Ltd. 1.7Brookfield Renewable Partners LP 1.6Veresen Inc. 1.6Top 25 Holdings 62.7





Annual Compound Returns (%)The table shows the annual compound returns of the ETF for each of the periods indicated ended on December 31, 2016, compared with the following benchmark:

S&P/TSX Capped Composite Total Return Index


Canadian Dividend ETF 21.0 – – – 4.8Benchmark 21.1 – – – 7.0

The Benchmark index returns do not include any costs of investing. See Management Discussion of Fund Performance for a discussion of performance relative to the Benchmark index.



INDEX DESCRIPTION S&P/TSX Capped Composite Total Return Index This index is the amended capitalization-weighted index measuring the performance of selected securities listed on the Toronto Stock Exchange, with no individual stock exceeding 10% of the overall weight.

56


CANADIAN EQUITY ETF

RBC QUANT CANADIAN EQUITY LEADERS ETF

December 31, 2016








57



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure to the performance of a diversified portfolio of high-quality Canadian equity securities that have the potential for long-term capital growth.

Portfolio securities for the ETF will be selected using a rules-based, multi-factor investment approach designed to select companies with a high quality of earnings while filtering out slow-growth companies and securities with expensive valuations. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.



Over the past year, the ETF’s units gained 23.0%, which outperformed the 21.1% rise in the benchmark. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce had the most positive impact on the ETF’s returns, while Royal Bank of Canada, Toronto-Dominion Bank and Enbridge Inc. were negative for performance. The ETF had the highest relative exposure to Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce, and the smallest relative exposure to Toronto-Dominion Bank, Manulife Financial and Waste Connections.

At the sector level, the ETF had the highest relative weightings in Utilities, Telecommunication Services and Financials, and the lowest relative exposure to Energy, Consumer Discretionary and Materials.










58







59






Canadian Equity ETFDec. 31, 2016 16.76 0.61 (0.10) 0.19 3.34 4.04 – (0.42) – – (0.42) 20.17 Dec. 31, 20153 20.00† 0.42 (0.06) (0.70) (2.87) (3.21) – (0.24) – – (0.24) 16.76


2 Distributions are either paid in cash, reinvested in additional units of the ETF, or both.3 From May 5, 2015.† Initial offering net asset value per unit.



Canadian Equity ETFDec. 31, 2016 9 078 450 0.44 0.44 0.07 97.09 20.17 20.32 Dec. 31, 20154 3 353 200 0.44 0.44 0.03 67.50 16.76 17.02




4 From May 5, 2015.


Management Fees

Canadian Equity ETF 0.39%


60




Canadian Equities Financials 34.8 Energy 17.2 Materials 11.5 Industrials 9.3 Utilities 7.1 Telecommunication Services 5.7 Consumer Discretionary 3.9 Consumer Staples 3.9 Real Estate 3.1 Information Technology 2.5 Health Care 0.5Other Net Assets 0.5


Royal Bank of Canada 7.7Bank of Nova Scotia 6.2Bank of Montreal 5.4Canadian Imperial Bank of Commerce 4.4Suncor Energy Inc. 3.1Sun Life Financial Inc. 2.8Canadian National Railway Co. 2.5BCE Inc. 2.5Canadian Natural Resources Ltd. 2.1Brookfield Asset Management Inc. 1.8TELUS Corp. 1.8Agrium Inc. 1.7Alimentation Couche-Tard Inc. 1.6Canadian Pacific Railway Ltd. 1.5Great-West Lifeco Inc. 1.5Rogers Communications Inc. 1.5Cenovus Energy Inc. 1.4Pembina Pipeline Corp. 1.4Power Financial Corp. 1.4Fortis Inc. 1.4Magna International Inc. 1.3Loblaw Cos., Ltd. 1.3Encana Corp. 1.2Thomson Reuters Corp. 1.2Industrial Alliance Insurance & Financial Services Inc. 1.1Top 25 Holdings 59.8






S&P/TSX Capped Composite Total Return Index


Canadian Equity ETF 23.0 – – – 3.4Benchmark 21.1 – – – 4.3


The ETF’s units have been available for sale to unitholders since May 12, 2015.


INDEX DESCRIPTION S&P/TSX Capped Composite Total Return Index This index is the amended capitalization-weighted index measuring the performance of selected securities listed on the Toronto Stock Exchange, with no individual stock exceeding 10% of the overall weight.

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U.S. EQUITY ETF

RBC QUANT U.S. DIVIDEND LEADERS ETF

December 31, 2016








62



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality U.S. dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the RBC Quant U.S. Dividend Leaders ETF will be selected using a rules-based, multifactor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced initially on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.



Over the past year, the ETF’s units gained 14.7%, which outperformed the 9.7% rise in the benchmark. The broad-based index rose 8.6%. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to Verizon Communications, Marathon Petroleum and Marathon Oil had the most positive impact on the ETF’s returns, while Pfizer, Chevron and Bank of America were negative for performance. The ETF had the highest relative exposure to Verizon Communications, Walmart and Abbott Laboratories, and the smallest relative exposure to General Electric, Berkshire Hathaway and Amazon.

At the sector level, the ETF had the highest relative weightings in Utilities, Consumer Staples and Industrials, and the lowest relative exposure to Information Technology, Consumer Discretionary and Health Care.










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U.S. Dividend ETFDec. 31, 2016 26.69 0.76 (0.12) 1.21 2.19 4.04 – (0.60) (0.92) – (1.52) 29.93 Dec. 31, 2015 23.79 0.89 (0.25) 1.41 1.11 3.16 – (0.59) (1.26) – (1.85) 26.69 Dec. 31, 20143 20.00† 0.88 (0.23) 0.47 3.91 5.03 – (0.37) (0.27) (0.01) (0.65) 23.79





U.S. Dividend ETFDec. 31, 2016 369 577 12 350 0.43 0.43 0.03 68.57 29.93 29.96 Dec. 31, 2015 250 912 9 400 0.43 0.43 0.05 110.87 26.69 26.64Dec. 31, 20144 132 021 5 550 0.44 0.44 0.01 47.29 23.79 23.95






Management Fees

U.S. Dividend ETF 0.39%


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United States Equities Information Technology 16.7 Industrials 12.3 Financials 12.1 Consumer Staples 10.7 Health Care 10.6 Energy 8.5 Real Estate 8.2 Consumer Discretionary 6.7 Utilities 6.4 Telecommunication Services 4.3 Materials 3.2Other Net Assets 0.3


Apple Inc. 2.1Microsoft Corp. 2.0Exxon Mobil Corp. 1.9AT&T Inc. 1.9Verizon Communications Inc. 1.7Johnson & Johnson 1.6Intel Corp. 1.4Pfizer Inc. 1.4Schlumberger Ltd. 1.3International Business Machines Corp. 1.3Coca-Cola Co. 1.3PepsiCo Inc. 1.3Altria Group Inc. 1.3Philip Morris International Inc. 1.3Cisco Systems Inc. 1.3Merck & Co., Inc. 1.2McDonald’s Corp. 1.1ConocoPhillips 1.1Amgen Inc. 1.1Abbvie Inc. 1.1Bristol-Myers Squibb Co. 1.1QUALCOMM Inc. 1.1Wal-Mart Stores Inc. 1.1Texas Instruments Inc. 1.0Gilead Sciences Inc. 1.0Top 25 Holdings 34.0






S&P 1500 Total Return Index (CAD)

The broad-based index is the S&P 500 Total Return Index (CAD).


U.S. Dividend ETF 14.7 – – – 16.7Benchmark 9.7 – – – 17.8Broad-based index 8.6 – – – 17.8




INDEX DESCRIPTIONS S&P 1500 Total Return Index (CAD) This index combines the S&P 500, the S&P 400 and the S&P 600 to cover approximately 90% of the U.S. stock-market capitalization. It is designed for investors seeking to replicate the performance of the U.S. equity market.S&P 500 Total Return Index (CAD) This index is a capitalization-weighted index measuring the Canadian dollar performance of 500 widely held common stocks representing all major industries in the United States. The index gives investors a broad measure of the overall performance of the U.S. stock market.

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U.S. EQUITY ETF

RBC QUANT U.S. DIVIDEND LEADERS (CAD HEDGED) ETF

December 31, 2016








67



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality U.S. dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth, while seeking to minimize the exposure to currency fluctuations between the U.S. and Canadian dollars.

The ETF intends to invest substantially all of its assets in units of the RBC Quant U.S. Dividend Leaders ETF (the “underlying fund”) but may also invest directly in a portfolio of U.S. dividend-paying equity securities. Portfolio securities for the underlying fund (and for the ETF, to the extent it invests directly in equity securities) will be selected using a rules-based, multifactor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.

The ETF uses derivatives to hedge against fluctuations in the U.S. dollar to minimize exposure to changes of the U.S. dollar relative to the Canadian dollar.



Over the past year, the ETF’s units gained 17.7%, which outperformed the 12.6% rise in the benchmark. The broad-based index rose 11.5%. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to Verizon Communications, Marathon Petroleum and Marathon Oil had the most positive impact on the ETF’s returns, while Pfizer, Chevron and Bank of America were negative for performance. The ETF had the highest relative exposure to Verizon Communications, Walmart and Abbott Laboratories, and the smallest relative exposure to General Electric, Berkshire Hathaway and Amazon.

At the sector level, the ETF had the highest relative weightings in Utilities, Consumer Staples and Industrials, and the lowest relative exposure to Information Technology, Consumer Discretionary and Health Care.








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U.S. Div. (CAD Hedged) ETFDec. 31, 2016 20.16 0.48 – 2.42 1.02 3.92 – (0.50) (0.87) – (1.37) 23.17 Dec. 31, 2015 21.47 0.56 – (2.70) 1.53 (0.61) (0.01) (0.49) – – (0.50) 20.16 Dec. 31, 20143 20.00† 0.14 – (0.09) 0.71 0.76 – (0.08) (0.03) (0.01) (0.12) 21.47





U.S. Div. (CAD Hedged) ETFDec. 31, 2016 105 429 4 550 0.43 0.43 0.03 36.83 23.17 23.24 Dec. 31, 2015 52 405 2 600 0.43 0.43 0.06 38.13 20.16 20.28Dec. 31, 20144 10 735 500 0.44 0.44 – 5.69 21.47 21.73







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S&P 1500 Total Return Index (hedged to CAD)

The broad-based index is the S&P 500 Total Return Index (hedged to CAD).


U.S. Div. (CAD Hedged) ETF 17.7 – – – 8.1Benchmark 12.6 – – – 7.3Broad-based index 11.5 – – – 8.6




INDEX DESCRIPTIONS S&P 1500 Total Return Index (hedged to CAD) This index combines the S&P 500, the S&P 400 and the S&P 600 to cover approximately 90% of the U.S. stock-market capitalization. It is designed for investors seeking to replicate the performance of the U.S. equity market. The index is hedged to Canadian dollars.S&P 500 Total Return Index (hedged to CAD) This index is a capitalization-weighted index measuring the performance of 500 widely held common stocks representing all major industries in the United States. The index gives investors a broad measure of the overall performance of the U.S. stock market and is hedged to Canadian dollars.




United States Equities Information Technology 16.7 Industrials 12.3 Financials 12.1 Consumer Staples 10.7 Health Care 10.6 Energy 8.5 Real Estate 8.2 Consumer Discretionary 6.7 Utilities 6.4 Telecommunication Services 4.3 Materials 3.2 Other Net Assets 0.3


Apple Inc. 2.1Microsoft Corp. 2.0Exxon Mobil Corp. 1.9AT&T Inc. 1.9Verizon Communications Inc. 1.7Johnson & Johnson 1.6Intel Corp. 1.4Pfizer Inc. 1.4Schlumberger Ltd. 1.3International Business Machines Corp. 1.3Coca-Cola Co. 1.3PepsiCo Inc. 1.3Altria Group Inc. 1.3Philip Morris International Inc. 1.3Cisco Systems Inc. 1.3Merck & Co., Inc. 1.2McDonald’s Corp. 1.1ConocoPhillips 1.1Amgen Inc. 1.1Abbvie Inc. 1.1Bristol-Myers Squibb Co. 1.1QUALCOMM Inc. 1.1Wal-Mart Stores Inc. 1.1Texas Instruments Inc. 1.0Gilead Sciences Inc. 1.0Top 25 Holdings 34.0

* The ETF invests substantially all of its assets directly in the RBC Quant U.S. Dividend Leaders ETF. The above are the Top 25 holdings of the RBC Quant U.S. Dividend Leaders ETF.



71


U.S. EQUITY ETF

RBC QUANT U.S. EQUITY LEADERS ETF

December 31, 2016








72



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure to the performance of a diversified portfolio of high-quality U.S. equity securities that have the potential for long-term capital growth.





The ETF’s relative exposure to ExxonMobil, Fifth Third Bancorp and Allergan had the most positive impact on the ETF’s returns, while Chevron, Berkshire Hathaway and Citigroup were negative for performance. The ETF had the highest relative exposure to ExxonMobil, Alphabet and Comcast, and the smallest relative exposure to Berkshire Hathaway, Wells Fargo and Chevron.

At the sector level, the ETF had the highest relative weightings in Information Technology, Utilities and Financials, and the lowest relative exposure to Consumer Discretionary, Energy and Consumer Staples.










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U.S. Equity ETFDec. 31, 2016 22.13 0.42 (0.10) 1.13 1.13 2.58 – (0.27) (0.48) – (0.75) 23.63 Dec. 31, 20153 20.00† 0.35 (0.12) 0.23 2.17 2.63 – (0.17) (0.11) (0.09) (0.37) 22.13





U.S. Equity ETFDec. 31, 2016 25 988 1 100 0.44 0.44 0.03 116.39 23.63 23.67 Dec. 31, 20154 13 281 600 0.44 0.44 0.01 93.28 22.13 22.40




4 From May 5, 2015.


Management Fees

U.S. Equity ETF 0.39%


75




United States Equities Information Technology 20.3 Financials 15.0 Health Care 13.2 Consumer Discretionary 11.1 Industrials 10.2 Consumer Staples 9.8 Energy 7.1 Telecommunication Services 4.0 Utilities 3.5 Materials 2.8 Real Estate 2.7Other Net Assets 0.3


Exxon Mobil Corp. 3.3Apple Inc. 2.4Alphabet Inc. 2.2AT&T Inc. 2.1Verizon Communications Inc. 1.9JPMorgan Chase & Co. 1.9Amazon Inc. 1.7Johnson & Johnson 1.7Bank of America Corp. 1.6Facebook Inc. 1.6Pfizer Inc. 1.3Intel Corp. 1.2International Business Machines Corp. 1.2Procter & Gamble Co. 1.2Merck & Co., Inc, 1.1Cisco Systems Inc. 1.1Amgen Inc. 1.0Mastercard Inc. 1.0Gilead Sciences Inc. 0.9Accenture PLC 0.8Priceline Group Inc. 0.8UnitedHealth Group Inc. 0.8Walt Disney Co. 0.8Texas Instruments Inc. 0.8PNC Financial Services Group Inc. 0.8Top 25 Holdings 35.2






S&P 500 Total Return Index (CAD)


U.S. Equity ETF 8.1 – – – 12.4Benchmark 8.6 – – – 11.4




INDEX DESCRIPTION S&P 500 Total Return Index (CAD) This index is a capitalization-weighted index measuring the Canadian dollar performance of 500 widely held common stocks representing all major industries in the United States. The index gives investors a broad measure of the overall performance of the U.S. stock market.

76


U.S. EQUITY ETF

RBC QUANT U.S. EQUITY LEADERS (CAD HEDGED) ETF

December 31, 2016








77



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality U.S. equity securities that have the potential for long-term capital growth, while seeking to minimize the exposure to currency fluctuations between the U.S. and Canadian dollars.

The ETF intends to invest substantially all of its assets in units of the RBC Quant U.S. Equity Leaders ETF (the “underlying RBC ETF”) but may also invest directly in a portfolio of U.S. equity securities. Portfolio securities for the underlying RBC ETF (and for the ETF, to the extent it invests directly in equity securities) will be selected using a rules-based, multi-factor investment approach designed to select companies with a high quality of earnings while filtering out slow-growth companies and securities with expensive valuations. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.

The ETF uses derivatives to hedge against fluctuations in the U.S. dollar to minimize exposure to changes of the U.S. dollar relative to the Canadian dollar.




The ETF’s relative exposure to ExxonMobil, Fifth Third Bancorp and Allergan had the most positive impact on the ETF’s returns, while Chevron, Berkshire Hathaway and Citigroup were negative for performance. The ETF had the highest relative exposure to ExxonMobil, Alphabet and Comcast, and the smallest relative exposure to Berkshire Hathaway, Wells Fargo and Chevron.

At the sector level, the ETF had the highest relative weightings in Information Technology, Utilities and Financials, and the lowest relative exposure to Consumer Discretionary, Energy and Consumer Staples.









78


Brokers and Dealers The ETF has established standard brokerage and dealing agreements at market rates with related parties. These related-party commissions were $1,000 (2015 – $0) or 3% (2015 – 0%) of the total transaction costs paid for this ETF.







79






U.S. Equity (CAD Hedged) ETFDec. 31, 2016 19.07 0.27 – 1.06 1.05 2.38 – (0.25) (0.07) – (0.32) 20.85 Dec. 31, 20153 20.00† 0.44 – (1.68) 0.68 (0.56) (0.01) (0.15) – (0.19) (0.35) 19.07





U.S. Equity (CAD Hedged) ETFDec. 31, 2016 9 384 450 0.44 0.44 0.03 65.22 20.85 21.12 Dec. 31, 20154 3 814 200 0.44 0.44 0.02 136.86 19.07 19.39




4 From May 5, 2015.



80





S&P 500 Total Return Index (hedged to CAD)


U.S. Equity (CAD Hedged) ETF 11.1 – – – 4.4Benchmark 11.5 – – – 5.9




INDEX DESCRIPTION S&P 500 Total Return Index (hedged to CAD) This index is a capitalization-weighted index measuring the performance of 500 widely held common stocks representing all major industries in the United States. The index gives investors a broad measure of the overall performance of the U.S. stock market and is hedged to Canadian dollars.




United States Equities Information Technology 20.3 Financials 15.0 Health Care 13.2 Consumer Discretionary 11.1 Industrials 10.2 Consumer Staples 9.8 Energy 7.1 Telecommunication Services 4.0 Utilities 3.5 Materials 2.8 Real Estate 2.7 Other Net Assets 0.3


Exxon Mobil Corp. 3.3Apple Inc. 2.4Alphabet Inc. 2.2AT&T Inc. 2.1Verizon Communications Inc. 1.9JPMorgan Chase & Co. 1.9Amazon Inc. 1.7Johnson & Johnson 1.7Bank of America Corp. 1.6Facebook Inc. 1.6Pfizer Inc. 1.3Intel Corp. 1.2International Business Machines Corp. 1.2Procter & Gamble Co. 1.2Merck & Co., Inc, 1.1Cisco Systems Inc. 1.1Amgen Inc. 1.0Mastercard Inc. 1.0Gilead Sciences Inc. 0.9Accenture PLC 0.8Priceline Group Inc. 0.8UnitedHealth Group Inc. 0.8Walt Disney Co. 0.8Texas Instruments Inc. 0.8PNC Financial Services Group Inc. 0.8Top 25 Holdings 35.2

* The ETF invests substantially all of its assets directly in the RBC Quant U.S. Equity Leaders ETF. The above are the Top 25 holdings of the RBC Quant U.S. Equity Leaders ETF.



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INTERNATIONAL EQUITY ETF

RBC QUANT EUROPEAN DIVIDEND LEADERS ETF

December 31, 2016








82



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality European dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the ETF will be selected using a rules-based, multi-factor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.



Over the past year, the ETF’s units gained 0.8%, which outperformed the 3.8% decline in the benchmark. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to BHP Billiton, Novo Nordisk and Royal Dutch Shell had the most positive impact on the ETF’s returns, while Coloplast, Unilever and BASF were negative for performance. The ETF had the highest relative exposure to Novo Nordisk, Coloplast and Unilever, and the smallest relative exposure to Nestlé, Roche and Novartis.

At the sector level, the ETF had the highest relative weightings in Telecommunication Services, Energy and Financials, and the lowest relative exposure to Consumer Staples, Consumer Discretionary and Information Technology.










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European Dividend ETFDec. 31, 2016 22.33 0.93 (0.21) (0.81) 0.44 0.35 – (0.79) – (0.01) (0.80) 21.68 Dec. 31, 2015 20.49 0.97 (0.39) (0.15) 0.20 0.63 – (0.63) – (0.06) (0.69) 22.33 Dec. 31, 20143 20.00† 0.08 (0.13) (0.10) 0.53 0.38 – (0.01) – (0.07) (0.08) 20.49





European Dividend ETFDec. 31, 2016 105 161 4 850 0.55 0.55 0.44 194.47 21.68 21.77 Dec. 31, 2015 94 892 4 250 0.56 0.56 0.58 234.29 22.33 22.28Dec. 31, 20144 7 170 350 0.57 0.57 0.39 608.53 20.49 20.61






Management Fees

European Dividend ETF 0.49%


85





MSCI Europe Total Return Net Index (CAD)


European Dividend ETF 0.8 – – – 6.6Benchmark -3.8 – – – 5.8




INDEX DESCRIPTION MSCI Europe Total Return Net Index (CAD) This index is a broad measure of the Canadian dollar performance of major stock markets in Europe. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.




European Equities Financials 33.4 Health Care 13.7 Energy 13.3 Telecommunication Services 8.0 Consumer Discretionary 8.0 Utilities 7.2 Materials 5.0 Industrials 4.8 Real Estate 4.2 Consumer Staples 2.1 Information Technology 0.5Other Net Assets (0.2)


Novo Nordisk A/S 8.9Royal Dutch Shell PLC 6.4Total SA 5.0Coloplast A/S 4.3CRH PLC 3.2Vanguard FTSE Europe ETF 3.0HSBC Holdings PLC 2.2Banco Santander SA 1.8Voestalpine AG 1.7BNP Paribas SA 1.7Allianz SE 1.7National Grid PLC 1.5ING Groep NV 1.5Unilever NV 1.5UBS Group AG 1.5AXA SA 1.5Petrofac Ltd. 1.4Swisscom AG 1.4TeliaSonera AB 1.3Nordea Bank AB 1.3Telenor ASA 1.3Swiss Re AG 1.3Unibail-Rodamco SE Real Estate Investment Trust 1.2SSE PLC 1.2SES SA 1.2Top 25 Holdings 59.0


86



RBC QUANT EUROPEAN DIVIDEND LEADERS (CAD HEDGED) ETF

December 31, 2016








87



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality European dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth, while seeking to minimize the exposure to currency fluctuations between foreign currencies and the Canadian dollar.

The ETF intends to invest substantially all of its assets in units of the RBC Quant European Dividend Leaders ETF (the “underlying fund”) but may also invest directly in a portfolio of European dividend-paying equity securities. Portfolio securities for the underlying fund (and for the ETF, to the extent it invests directly in equity securities) will be selected using a rules-based, multi-factor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.

The ETF uses derivatives to hedge against fluctuations in foreign currencies to minimize exposure to changes of the foreign currencies held by the ETF relative to the Canadian dollar.


Results of OperationsThe ETF’s net asset value fell to $57 million as of December 31, 2016, from $69 million at the end of 2015. The decrease was due mainly to net redemptions.


The ETF’s relative exposure to BHP Billiton, Novo Nordisk and Royal Dutch Shell had the most positive impact on the ETF’s returns, while Coloplast, Unilever and BASF were negative for performance. The ETF had the highest relative exposure to Novo Nordisk, Coloplast and Unilever, and the smallest relative exposure to Nestlé, Roche and Novartis.

At the sector level, the ETF had the highest relative weightings in Telecommunication Services, Energy and Financials, and lowest relative exposure to Consumer Staples, Consumer Discretionary and Information Technology.









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Europ. Div. (CAD Hedged) ETFDec. 31, 2016 20.61 0.77 – 1.43 (0.15) 2.05 – (0.84) – – (0.84) 22.09 Dec. 31, 2015 20.96 0.67 – (2.40) (0.34) (2.07) – (0.63) – (0.01) (0.64) 20.61 Dec. 31, 20143 20.00† 0.11 – 0.07 0.58 0.76 – (0.01) (0.04) (0.07) (0.12) 20.96





Europ. Div. (CAD Hedged) ETFDec. 31, 2016 57 447 2 600 0.55 0.55 0.44 39.74 22.09 22.04 Dec. 31, 2015 69 027 3 350 0.56 0.56 0.59 35.27 20.61 20.63Dec. 31, 20144 5 239 250 0.57 0.57 – 3.50 20.96 21.11







90





MSCI Europe Total Return Net Index (hedged to CAD)


Europ. Div. (CAD Hedged) ETF 11.6 – – – 7.0Benchmark 8.1 – – – 6.8




INDEX DESCRIPTION MSCI Europe Total Return Net Index (hedged to CAD) This index is a broad measure of the Canadian dollar performance of major stock markets in Europe. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is hedged to Canadian dollars.




European Equities Financials 33.4 Health Care 13.7 Energy 13.3 Telecommunication Services 8.0 Consumer Discretionary 8.0 Utilities 7.2 Materials 5.0 Industrials 4.8 Real Estate 4.2 Consumer Staples 2.1 Information Technology 0.5Other Net Assets (0.2)


Novo Nordisk A/S 8.9Royal Dutch Shell PLC 6.4Total SA 5.0Coloplast A/S 4.3CRH PLC 3.2Vanguard FTSE Europe ETF 3.0HSBC Holdings PLC 2.2Banco Santander SA 1.8Voestalpine AG 1.7BNP Paribas SA 1.7Allianz SE 1.7National Grid PLC 1.5ING Groep NV 1.5Unilever NV 1.5UBS Group AG 1.5AXA SA 1.5Petrofac Ltd. 1.4Swisscom AG 1.4TeliaSonera AB 1.3Nordea Bank AB 1.3Telenor ASA 1.3Swiss Re AG 1.3Unibail-Rodamco SE Real Estate Investment Trust 1.2SSE PLC 1.2SES SA 1.2Top 25 Holdings 59.0

* The ETF invests substantially all of its assets directly in the RBC Quant European Dividend Leaders ETF. The above are the Top 25 holdings of the RBC Quant European Dividend Leaders ETF.



91



RBC QUANT EAFE DIVIDEND LEADERS ETF

December 31, 2016








92



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality dividend-paying equity securities in markets in Europe, Australasia and the Far East (EAFE) that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the RBC Quant EAFE Dividend Leaders ETF will be selected using a rules-based, multifactor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced initially on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.



Over the past year, the ETF’s units gained 1.4%, which outperformed the 2.5% decline in the benchmark. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to Novo Nordisk, Royal Dutch Shell and BHP Billiton had the most positive impact on the ETF’s returns, while Coloplast, Japan Tobacco and Unilever were negative for performance. The ETF had the highest relative exposure to Unilever, Japan Tobacco and Royal Dutch Shell, and the smallest relative exposure to Nestlé, Roche and Novartis.

At the sector level, the ETF had the highest relative weightings in Financials, Energy and Telecommunication Services, and the lowest relative exposure to Consumer Discretionary, Information Technology and Health Care.










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EAFE Dividend ETFDec. 31, 2016 23.13 0.98 (0.27) (0.15) (0.15) 0.41 – (0.76) – – (0.76) 22.66 Dec. 31, 2015 20.33 1.03 (0.33) 0.66 1.48 2.84 – (0.71) (0.52) (0.03) (1.26) 23.13 Dec. 31, 20143 20.00† 0.85 (0.35) 0.25 (0.86) (0.11) – (0.43) (0.20) – (0.63) 20.33





EAFE Dividend ETFDec. 31, 2016 312 661 13 800 0.54 0.54 0.25 141.18 22.66 22.55 Dec. 31, 2015 301 818 13 050 0.53 0.53 0.27 124.49 23.13 22.94Dec. 31, 20144 132 174 6 500 0.55 0.55 0.32 251.89 20.33 20.35






Management Fees

EAFE Dividend ETF 0.49%


95




International Equities Financials 32.3 Health Care 12.4 Energy 11.0 Industrials 8.3 Real Estate 8.3 Telecommunication Services 6.6 Consumer Discretionary 6.1 Utilities 5.4 Materials 4.4 Consumer Staples 3.6 Information Technology 1.3 Other Net Assets 0.3


Novo Nordisk A/S 6.6Royal Dutch Shell PLC 4.5Total SA 3.5Coloplast A/S 3.2Mitsubishi Tanabe Pharma Corp. 2.5Fletcher Building Ltd. 1.6Voestalpine AG 1.6Unilever NV 1.5Woodside Petroleum Ltd. 1.4Westpac Banking Corp. 1.3Allianz SE 1.3Australia & New Zealand Banking Group Ltd. 1.2National Australia Bank Ltd. 1.2Maruichi Steel Tube Ltd. 1.1AXA SA 1.1Petrofac Ltd. 1.0Nordea Bank AB 1.0RELX NV 1.0ABB Ltd. 1.0Swiss Re AG 1.0Japan Tobacco Inc. 1.0Unibail-Rodamco SE Real Estate Investment Trust 0.9KDDI Corp. 0.9Tokio Marine Holdings Inc. 0.9Swedbank AB 0.9Top 25 Holdings 43.2






MSCI EAFE Total Return Net Index (CAD)


EAFE Dividend ETF 1.4 – – – 7.6Benchmark -2.5 – – – 6.3




INDEX DESCRIPTION MSCI EAFE Total Return Net Index (CAD) This index is a broad measure of the Canadian dollar performance of stocks from developed equity markets covering countries in Europe, Australasia and the Far East. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

96



RBC QUANT EAFE DIVIDEND LEADERS (CAD HEDGED) ETF

December 31, 2016








97



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality dividend-paying equity securities in markets in Europe, Australasia and the Far East (“EAFE”) that will provide regular income and that have the potential for long-term capital growth, while seeking to minimize the exposure to currency fluctuations between foreign currencies and the Canadian dollar.

The ETF intends to invest substantially all of its assets in units of the RBC Quant EAFE Dividend Leaders ETF (the “underlying fund”) but may also invest directly in a portfolio of dividend-paying equity securities in markets in Europe, Australasia and the Far East. Portfolio securities for the underlying fund (and for the ETF, to the extent it invests directly in equity securities) will be selected using a rules-based, multi-factor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.



Results of OperationsThe ETF’s net asset value rose to $71 million as of December 31, 2016, from $68 million at the end of 2015. The increase was due to investment returns, partially offset by net redemptions.


The ETF’s relative exposure to Novo Nordisk, Royal Dutch Shell and BHP Billiton had the most positive impact on the ETF’s returns, while Coloplast, Japan Tobacco and Unilever were negative for performance. The ETF had the highest relative exposure to Unilever, Japan Tobacco and Royal Dutch Shell, and the smallest relative exposure to Nestlé, Roche and Novartis.

At the sector level, the ETF had the highest relative weightings in Financials, Energy and Telecommunication Services, and the lowest relative exposure to Consumer Discretionary, Information Technology and Health Care.









98



Brokers and DealersThe ETF has established standard brokerage and dealing agreements at market rates with related parties. These related-party commissions were $7,000 (2015 – $0) or 18% (2015 – 0%) of the total transaction costs paid for this ETF.






99






EAFE Div. (CAD Hedged) ETFDec. 31, 2016 21.44 0.72 – 1.30 (0.25) 1.77 – (0.75) (0.43) – (1.18) 22.47 Dec. 31, 2015 21.26 0.75 – (2.08) 0.51 (0.82) – (0.70) – – (0.70) 21.44 Dec. 31, 20143 20.00† 0.19 – 0.52 1.00 1.71 – (0.11) (0.43) (0.01) (0.55) 21.26





EAFE Div. (CAD Hedged) ETFDec. 31, 2016 70 774 3 150 0.54 0.54 0.25 56.15 22.47 22.45 Dec. 31, 2015 67 551 3 150 0.54 0.54 0.29 18.17 21.44 21.47Dec. 31, 20144 3 189 150 0.55 0.55 – – 21.26 21.29







100





MSCI EAFE Total Return Net Index (hedged to CAD)


EAFE Div. (CAD Hedged) ETF 8.6 – – – 7.6Benchmark 5.8 – – – 6.1




INDEX DESCRIPTION MSCI EAFE Total Return Net Index (hedged to CAD) This index is a broad measure of the Canadian dollar performance of stocks from developed equity markets covering countries in Europe, Australasia and the Far East. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is hedged to Canadian dollars.




International Equities Financials 32.3 Health Care 12.4 Energy 11.0 Industrials 8.3 Real Estate 8.3 Telecommunication Services 6.6 Consumer Discretionary 6.1 Utilities 5.4 Materials 4.4 Consumer Staples 3.6 Information Technology 1.3 Other Net Assets 0.3


Novo Nordisk A/S 6.6Royal Dutch Shell PLC 4.5Total SA 3.5Coloplast A/S 3.2Mitsubishi Tanabe Pharma Corp. 2.5Fletcher Building Ltd. 1.6Voestalpine AG 1.6Unilever NV 1.5Woodside Petroleum Ltd. 1.4Westpac Banking Corp. 1.3Allianz SE 1.3Australia & New Zealand Banking Group Ltd. 1.2National Australia Bank Ltd. 1.2Maruichi Steel Tube Ltd. 1.1AXA SA 1.1Petrofac Ltd. 1.0Nordea Bank AB 1.0RELX NV 1.0ABB Ltd. 1.0Swiss Re AG 1.0Japan Tobacco Inc. 1.0Unibail-Rodamco SE Real Estate Investment Trust 0.9KDDI Corp. 0.9Tokio Marine Holdings Inc. 0.9Swedbank AB 0.9Top 25 Holdings 43.2

* The ETF invests substantially all of its assets directly in the RBC Quant EAFE Dividend Leaders ETF. The above are the Top 25 holdings of the RBC Quant EAFE Dividend Leaders ETF.



101



RBC QUANT EAFE EQUITY LEADERS ETF

December 31, 2016








102



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure to the performance of a diversified portfolio of high-quality equity securities in markets in Europe, Australasia and the Far East (EAFE) that have the potential for long-term capital growth.




Over the past year, the ETF’s units lost 2.4%, which outperformed the 2.5% decline in the benchmark. The ETF’s return is after the deduction of fees and expenses, while benchmark and broad-based index returns do not include any costs of investing. See the Financial Highlights section for the management expense ratios and the Past Performance section for the returns of any other series, which may vary because of differences in management fees and expenses.

The ETF’s relative exposure to HSBC, Toyota and Rio Tinto had the most positive impact on the ETF’s returns, while Royal Dutch Shell, UBS and SoftBank were negative for performance. The ETF had the highest relative exposure to ABN AMRO, Glencore and Atlas Copco, and the smallest relative exposure to GlaxoSmithKline, Anheuser-Busch and Commonwealth Bank of Australia.

At the sector level, the ETF had the highest relative weightings in Industrials, Utilities and Consumer Discretionary, and the lowest relative exposure to Health Care, Consumer Staples and Energy.










103







104






EAFE Equity ETFDec. 31, 2016 20.71 0.60 (0.17) (0.49) 0.40 0.34 – (0.48) – – (0.48) 19.72 Dec. 31, 20153 20.00† 0.34 (0.20) 0.12 0.97 1.23 – (0.18) (0.11) (0.13) (0.42) 20.71





EAFE Equity ETFDec. 31, 2016 14 788 750 0.56 0.56 0.36 226.33 19.72 19.59 Dec. 31, 20154 9 318 450 0.56 0.56 0.24 271.60 20.71 20.56




4 From May 5, 2015.


Management Fees

EAFE Equity ETF 0.49%


105




International Equities Financials 18.2 Industrials 16.4 Consumer Discretionary 12.0 Consumer Staples 10.2 Materials 9.0 Health Care 7.3 Information Technology 6.2 Real Estate 5.4 Telecommunication Services 5.4 Energy 4.8 Utilities 4.8 Other Net Assets 0.3


HSBC Holdings PLC 1.4Nestlé SA 1.3BP PLC 1.2Roche Holding AG 1.1Toyota Motor Corp. 1.0Total SA 0.9Diageo PLC 0.9Siemens AG 0.8Vodafone Group PLC 0.8Sanofi 0.8BASF SE 0.8SAP SE 0.8Prudential PLC 0.8Reckitt Benckiser Group PLC 0.8Novo Nordisk A/S 0.7BNP Paribas SA 0.7Glencore PLC 0.7Deutsche Telekom AG 0.6Rio Tinto Ltd. 0.6National Australia Bank Ltd. 0.6ING Groep NV 0.6LVMH Moet Hennessy Louis Vuitton SA 0.6Compass Group PLC 0.6AXA SA 0.6ENI SpA 0.6Top 25 Holdings 20.3






MSCI EAFE Total Return Net Index (CAD)


EAFE Equity ETF -2.4 – – – 1.3Benchmark -2.5 – – – -0.6




INDEX DESCRIPTION MSCI EAFE Total Return Net Index (CAD) This index is a broad measure of the Canadian dollar performance of stocks from developed equity markets covering countries in Europe, Australasia and the Far East. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

106



RBC QUANT EAFE EQUITY LEADERS (CAD HEDGED) ETF

December 31, 2016








107



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality equity securities in markets in Europe, Australasia and the Far East (EAFE) that have the potential for long-term capital growth, while seeking to minimize the exposure to currency fluctuations between foreign currencies and the Canadian dollar.

The ETF intends to invest substantially all of its assets in units of the RBC Quant EAFE Equity Leaders ETF (the “underlying RBC ETF”) but may also invest directly in a portfolio of equity securities in markets in Europe, Australasia and the Far East. Portfolio securities for the underlying RBC ETF (and for the ETF, to the extent it invests directly in equity securities) will be selected using a rules-based, multi-factor investment approach designed to select companies with a high quality of earnings while filtering out slow-growth companies and securities with expensive valuations. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.





The ETF’s relative exposure to HSBC, Toyota and Rio Tinto had the most positive impact on the ETF’s returns, while Royal Dutch Shell, UBS and SoftBank were negative for performance. The ETF had the highest relative exposure to ABN AMRO, Glencore and Atlas Copco, and the smallest relative exposure to GlaxoSmithKline, Anheuser-Busch and Commonwealth Bank of Australia.

At the sector level, the ETF had the highest relative weightings in Industrials, Utilities and Consumer Discretionary, and the lowest relative exposure to Health Care, Consumer Staples and Energy.









108



Brokers and Dealers The ETF has established standard brokerage and dealing agreements at market rates with related parties. These related-party commissions were $1,000 (2015 – $0) or 3% (2015 – 0%) of the total transaction costs paid for this ETF.






109






EAFE Equity (CAD Hedged) ETFDec. 31, 2016 18.38 0.49 – 1.43 0.34 2.26 – (0.44) (0.83) – (1.27) 18.76 Dec. 31, 20153 20.00† 0.39 – (1.96) 0.34 (1.23) – (0.16) – (0.24) (0.40) 18.38





EAFE Equity (CAD Hedged) ETFDec. 31, 2016 10 316 550 0.55 0.55 0.36 5.58 18.76 19.01 Dec. 31, 20154 1 838 100 0.57 0.57 0.25 21.17 18.38 18.36




4 From May 5, 2015.



110





MSCI EAFE Total Return Net Index (hedged to CAD)


EAFE Equity (CAD Hedged) ETF 4.7 – – – -1.1Benchmark 5.8 – – – -1.6




INDEX DESCRIPTION MSCI EAFE Total Return Net Index (hedged to CAD) This index is a broad measure of the Canadian dollar performance of stocks from developed equity markets covering countries in Europe, Australasia and the Far East. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is hedged to Canadian dollars.




International Equities Financials 18.2 Industrials 16.4 Consumer Discretionary 12.0 Consumer Staples 10.2 Materials 9.0 Health Care 7.3 Information Technology 6.2 Real Estate 5.4 Telecommunication Services 5.4 Energy 4.8 Utilities 4.8 Other Net Assets 0.3


HSBC Holdings PLC 1.4Nestlé SA 1.3BP PLC 1.2Roche Holding AG 1.1Toyota Motor Corp. 1.0Total SA 0.9Diageo PLC 0.9Siemens AG 0.8Vodafone Group PLC 0.8Sanofi 0.8BASF SE 0.8SAP SE 0.8Prudential PLC 0.8Reckitt Benckiser Group PLC 0.8Novo Nordisk A/S 0.7BNP Paribas SA 0.7Glencore PLC 0.7Deutsche Telekom AG 0.6Rio Tinto Ltd. 0.6National Australia Bank Ltd. 0.6ING Groep NV 0.6LVMH Moet Hennessy Louis Vuitton SA 0.6Compass Group PLC 0.6AXA SA 0.6ENI SpA 0.6Top 25 Holdings 20.3

* The ETF invests substantially all of its assets directly in the RBC Quant EAFE Equity Leaders ETF. The above are the Top 25 holdings of the RBC Quant EAFE Equity Leaders ETF.



111



RBC QUANT EMERGING MARKETS DIVIDEND LEADERS ETF

December 31, 2016








112



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality emerging market dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the ETF will be selected using a rules-based, multi-factor investment approach that considers a company’s balance sheet strength, the stability and sustainability of its dividend payout and its ability to grow dividends in the future. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.




The ETF’s relative exposure to China Petroleum & Chemical, Bharat Petroleum and Banco Bradesco had the most positive impact on the ETF’s returns, while Samsung Electronics, Taiwan Semiconductor and Tencent were negative for performance. The ETF had the highest relative exposure to China Petroleum & Chemical, Sasol and India’s Oil & Natural Gas Corp., and the smallest relative exposure to Samsung Electronics, Taiwan Semiconductor and Tencent.

At the sector level, the ETF had the highest relative weightings in Financials, Energy and Telecommunication Services, and the lowest relative exposure to Information Technology, Consumer Discretionary and Consumer Staples.










113







114






Emerging Markets Div. ETFDec. 31, 2016 18.32 0.82 (0.20) (1.28) 1.76 1.10 – (0.67) – – (0.67) 18.41 Dec. 31, 2015 20.36 0.93 (0.37) (0.90) (2.61) (2.95) – (0.60) – – (0.60) 18.32 Dec. 31, 20143 20.00† 0.09 (0.11) (0.28) 0.78 0.48 – (0.03) – (0.07) (0.10) 20.36





Emerging Markets Div. ETFDec. 31, 2016 25 769 1 400 0.76 0.76 0.41 200.79 18.41 18.33 Dec. 31, 2015 20 149 1 100 0.76 0.76 0.60 225.06 18.32 18.17Dec. 31, 20144 6 108 300 0.79 0.79 0.22 632.85 20.36 20.61






Management Fees

Emerging Markets Div. ETF 0.64%


115





MSCI Emerging Markets Total Return Net Index (CAD)


Emerging Markets Div. ETF 4.3 – – – 0.0Benchmark 7.3 – – – 2.8




INDEX DESCRIPTION MSCI Emerging Markets Total Return Net Index (CAD) This index is a broad measure of the Canadian dollar performance of emerging-market equities. As of May 2010, the index consisted of the following 21 emerging-market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. The net total return index reinvests dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.




International Equities Financials 32.2 Information Technology 15.9 Telecommunication Services 11.1 Energy 10.9 Materials 8.0 Real Estate 6.7 Industrials 4.5 Consumer Discretionary 4.3 Consumer Staples 3.5 Utilities 2.1 Health Care 0.4Other Net Assets 0.4


China Mobile Ltd. 2.3Hon Hai Precision Industry Co., Ltd. 2.2China Petroleum & Chemical Corp. 2.1Infosys Ltd. 2.0Sasol Ltd. 1.9Tata Consultancy Services Ltd. 1.7Bank of China Ltd. 1.5Itau Unibanco Holding SA 1.5Telekomunikasi Indonesia Persero Tbk PT 1.5Chunghwa Telecom Co., Ltd. 1.3HCL Technologies Ltd. 1.3Oil & Natural Gas Corp., Ltd. 1.2FirstRand Ltd. 1.2Polskie Gornictwo Naftowe I Gazownictwo SA 1.2Shinhan Financial Group Co., Ltd. 1.1Pegatron Corp. 1.1S-Oil Corp. 1.1Grupo Financiero Banorte SAB de CV 1.1Catcher Technology Co., Ltd. 1.1Tupras Turkiye Petrol Rafinerileri AS 1.1The Siam Cement PCL 1.0Lenovo Group Ltd. 1.0Credicorp., Ltd. 1.0Vodacom Group Ltd. 1.0Bharat Petroleum Corp., Ltd. 1.0Top 25 Holdings 34.5


116



RBC QUANT EMERGING MARKETS EQUITY LEADERS ETF

December 31, 2016








117



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure to the performance of a diversified portfolio of high-quality emerging market equity securities that have the potential for long-term capital growth.

Portfolio securities for the ETF will be selected using a rules-based, multi-factor investment approach designed to select companies with a high quality of earnings while filtering out slow growth companies and securities with expensive valuations. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies. The portfolio holdings will be reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.
















118






Emerging Markets Equity ETFDec. 31, 20163 20.00† 0.65 (0.24) (0.16) 1.67 1.92 – (0.44) – (0.02) (0.46) 21.43





Emerging Markets Equity ETFDec. 31, 20164 4 285 200 0.75 0.75 0.45 190.14 21.43 21.80






Management Fees

Emerging Markets Equity ETF 0.64%



119





Equities Financials 25.1 Information Technology 24.4 Energy 8.3 Telecommunication Services 7.8 Consumer Staples 7.5 Materials 6.5 Consumer Discretionary 6.4 Industrials 5.5 Utilities 3.2 Health Care 2.6 Real Estate 2.5Other Net Assets 0.2


Alibaba Group Holding Ltd. 4.2Samsung Electronics Co., Ltd. 3.8Baidu Inc. 2.9Taiwan Semiconductor Manufacturing Co., Ltd. 2.5NetEase Inc. 1.7China Mobile Ltd. 1.7Petroleo Brasileiro SA 1.6Hon Hai Precision Industry Co., Ltd. 1.6Cielo SA 1.3China Construction Bank Corp. 1.2China Petroleum & Chemical Corp. 1.2SK Hynix Inc. 1.0PetroChina Co., Ltd. 1.0Industrial & Commercial Bank of China Ltd. 1.0CNOOC Ltd. 0.9Bank of China Ltd. 0.9Itau Unibanco Holding SA 0.9Hyundai Mobis Co., Ltd. 0.8Telekomunikasi Indonesia Persero Tbk PT 0.8Asustek Computer Inc. 0.8Astra International Tbk PT 0.8Tata Motors Ltd. 0.7LG Display Co., Ltd. 0.7Ping An Insurance Group Co. of China Ltd. 0.7Chunghwa Telecom Co., Ltd. 0.7Top 25 Holdings 35.4


120


GLOBAL EQUITY ETF

RBC STRATEGIC GLOBAL DIVIDEND LEADERS ETF

December 31, 2016








121



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality global dividend-paying equity securities that will provide regular income and that have the potential for long-term capital growth.

The ETF invests substantially all of its assets in RBC Quant Dividend Leaders ETFs (other than RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF, RBC Quant European Dividend Leaders (CAD Hedged) ETF and RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF). The ETF may also invest directly in a portfolio of global dividend-paying equity securities.

The portfolio asset allocation will be reconstituted and rebalanced from time to time, and no less frequently than quarterly. The frequency of the reconstitution and rebalancing may change without notice.

In order to adjust the portfolio’s asset mix in a more timely manner, the portfolio manager may use derivatives as a substitute for direct investment in a particular market, on a short-term basis, until the portfolio’s assets can be reallocated among the RBC Quant Dividend Leaders ETFs.

Portfolio securities for each of the applicable RBC Quant Dividend Leaders ETFs, and for the ETF, to the extent it invests directly in equity securities, will be selected using a rules-based, multi-factor investment approach designed to select high-quality global dividend-paying equity securities (i.e. companies with strong balance sheets, stable and sustainable dividend payouts and the ability to grow dividends in the future). Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies.












122







123






Strat. Global Div. ETFDec. 31, 20163 20.00† 0.71 (0.02) 0.48 2.28 3.45 – (0.64) (0.51) – (1.15) 22.78





Strat. Global Div. ETFDec. 31, 20164 3 417 150 0.59 0.59 0.12 21.51 22.78 21.86








124




International Equities Financials 23.3 Energy 13.5 Real Estate 12.2 Information Technology 7.7 Telecommunication Services 7.5 Industrials 7.5 Utilities 6.7 Health Care 6.7 Consumer Staples 5.1 Consumer Discretionary 5.0 Materials 4.3Other Net Assets 0.5


RBC Quant U.S. Dividend Leaders ETF 35.1RBC Quant Canadian Dividend Leaders ETF 32.7RBC Quant EAFE Dividend Leaders ETF 22.8RBC Quant Emerging Markets Dividend Leaders ETF 9.2Total 99.8





125


GLOBAL EQUITY ETF

RBC STRATEGIC GLOBAL EQUITY LEADERS ETF

December 31, 2016








126



Investment Objective and StrategiesThe ETF seeks to provide unitholders with broad exposure, either directly or indirectly through investment in other mutual funds managed by RBC GAM or an affiliate, to the performance of a diversified portfolio of high-quality global equity securities that have the potential for long-term capital growth.

The ETF invests substantially all of its assets in RBC Quant Equity Leaders ETFs (other than RBC Quant U.S. Equity Leaders (CAD Hedged) ETF and RBC Quant EAFE Equity Leaders (CAD Hedged) ETF). The ETF may also invest directly in a portfolio of global equity securities.

The portfolio asset allocation will be reconstituted and rebalanced from time to time, and no less frequently than quarterly. The frequency of the reconstitution and rebalancing may change without notice.

In order to adjust the portfolio’s asset mix in a more timely manner, the portfolio manager may use derivatives as a substitute for direct investment in a particular market, on a short-term basis, until the portfolio’s assets can be reallocated among the RBC Quant Equity Leaders ETFs.

Portfolio securities for each of the applicable RBC Quant Equity Leaders ETFs, and for the ETF, to the extent it invests directly in equity securities, will be selected using a rules-based, multi-factor investment approach designed to select high-quality global equity securities (i.e. companies with a high quality of earnings) while filtering out slow growth companies and securities with expensive valuations. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization companies.













127







128






Strat. Global Equity ETFDec. 31, 20163 20.00† 0.43 (0.03) 0.41 2.39 3.20 – (0.39) (0.45) – (0.84) 22.75





Strat. Global Equity ETFDec. 31, 20164 2 275 100 0.60 0.60 0.19 24.27 22.75 21.96








129





International Equities Financials 23.0 Information Technology 11.6 Industrials 10.9 Energy 9.9 Consumer Discretionary 8.5 Consumer Staples 7.7 Materials 7.4 Health Care 6.7 Telecommunication Services 5.2 Utilities 4.9 Real Estate 3.4Other Net Assets 0.8


RBC Quant U.S. Equity Leaders ETF 35.2RBC Quant Canadian Equity Leaders ETF 32.6RBC Quant EAFE Equity Leaders ETF 23.0RBC Quant Emerging Markets Equity Leaders ETF 8.9Total 99.7




130


GLOBAL EQUITY ETF

RBC QUANT GLOBAL INFRASTRUCTURE LEADERS ETF

December 31, 2016








131



Investment Objective and StrategiesThe ETF seeks to provide unitholders with exposure to the performance of a diversified global portfolio of high-quality equity securities of companies that own or operate infrastructure assets that will provide regular income and that have the potential for long-term capital growth.

Portfolio securities for the ETF are selected from the global listed infrastructure universe using a rules-based, multi-factor investment approach that considers a combination of the financial strength, growth and stability factors of the company. The global listed infrastructure universe, as determined by the portfolio management team, is made up of companies that own or operate assets primarily in the transportation (toll roads, airports, railroads and marine ports), energy (storage and transportation, renewable energy and pipelines), utilities (electric utilities, gas utilities and water), and communication (wireless towers) sectors, domiciled around the world. Securities are weighted in accordance with a modified capitalization weighting methodology designed to reduce the dispersion of weights between larger and smaller capitalization securities. The portfolio holdings are reconstituted and rebalanced on a quarterly basis. The frequency of the reconstitution and rebalancing may change without notice.















132






Global Infrastructure ETFDec. 31, 20163 20.00† 0.27 (0.10) (0.09) 1.10 1.18 – (0.21) – – (0.21) 20.18





Global Infrastructure ETFDec. 31, 20164 9 083 450 0.64 0.64 0.76 125.38 20.18 20.30






Management Fees

Global Infrastructure ETF 0.55%



133





International Equities Utilities 55.6 Telecommunication Services 36.2 Energy 4.3 Consumer Discretionary 3.2 Industrials 0.4 Other Net Assets 0.3


Verizon Communications Inc. 6.3AT&T Inc. 5.6Ameren Corp. 4.5Centrica PLC 4.4Inter Pipeline Ltd. 4.3Xcel Energy Inc. 4.2Vectren Corp. 4.2National Grid PLC 4.1Entergy Corp. 4.0Fortis Inc. 4.0Great Plains Energy Inc. 3.9Rogers Communications Inc. 3.9Nippon Telegraph & Telephone Corp. 3.9Telkom SA SOC Ltd. 3.8Proximus 3.6Chubu Electric Power Co., Inc. 3.1Hawaiian Electric Industries Inc. 2.9MTN Group Ltd. 2.6Pinnacle West Capital Corp. 2.4Eutelsat Communications SA 2.3Millicom International Cellular SA 2.1AES Corp. 1.9BCE Inc. 1.8Tohoku Electric Power Co., Inc. 1.7DTE Energy Co. 1.6Top 25 Holdings 87.1


134

The accompanying financial statements have been prepared by RBC Global Asset Management Inc. (“RBC GAM”) as manager of the RBC ETFs

(the “ETFs”) 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 ETFs, 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 Frank Lippa, CPA, CAChief Executive Officer Chief Financial Officer and Chief Operating OfficerRBC Global Asset Management Inc. RBC Global Asset Management Inc.

March 8, 2017

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

135135

INDEPENDENT AUDITOR’S REPORT

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,

cash flows and changes in net assets attributable to holders of

redeemable units for the periods indicated in note 2, and the related

notes, which comprise a summary of significant accounting policies

and other explanatory information.

Management’s responsibility for the financial statementsManagement 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 responsibilityOur 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.

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

To the Unitholders of:

RBC 1-5 Year Laddered Corporate Bond ETFRBC 1-5 Year Laddered Canadian Bond ETFRBC Target 2017 Corporate Bond Index ETFRBC Target 2018 Corporate Bond Index ETFRBC Target 2019 Corporate Bond Index ETFRBC Target 2020 Corporate Bond Index ETFRBC Target 2021 Corporate Bond Index ETFRBC Target 2022 Corporate Bond Index ETFRBC Target 2023 Corporate Bond Index ETFRBC Canadian Preferred Share ETFRBC Quant Canadian Dividend Leaders ETF

RBC Quant Canadian Equity Leaders ETFRBC Quant U.S. Dividend Leaders ETFRBC Quant U.S. Dividend Leaders (CAD Hedged) ETFRBC Quant U.S. Equity Leaders ETFRBC Quant U.S. Equity Leaders (CAD Hedged) ETFRBC Quant European Dividend Leaders ETFRBC Quant European Dividend Leaders (CAD Hedged) ETFRBC Quant EAFE Dividend Leaders RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF

RBC Quant EAFE Equity Leaders ETFRBC Quant EAFE Equity Leaders (CAD Hedged) ETFRBC Quant Emerging Markets Dividend Leaders ETFRBC Quant Emerging Markets Equity Leaders ETFRBC Strategic Global Dividend Leaders ETFRBC Strategic Global Equity Leaders ETFRBC Quant Global Infrastructure Leaders ETF(collectively referred to as the “ETFs”)

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.

OpinionIn 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 flows of each of the Funds for the periods indicated in note 2,

in accordance with International Financial Reporting Standards.

Other matterThe financial statements of each of the Funds as at December 31, 2015

and for the periods indicated in note 2, as applicable, were audited

by another auditor who expressed an unmodified opinion on those

statements on March 4, 2016.

Chartered Professional Accountants, Licensed Public Accountants

Toronto, OntarioMarch 8, 2017

136

SCHEDULE OF INVESTMENT PORTFOLIO (in $000s)

2016 ANNUAL FINANCIAL STATEMENTS

December 31, 2016

The accompanying notes are an integral part of the financial statements.


Number Fair % of Net of Units Security Cost Value Assets

ETF UNITS 1 954 092 RBC Target 2018 Corporate Bond Index ETF* $ 38 945 $ 38 087 1 914 392 RBC Target 2019 Corporate Bond Index ETF* 38 853 38 055 1 857 553 RBC Target 2020 Corporate Bond Index ETF* 38 633 38 030 1 876 737 RBC Target 2021 Corporate Bond Index ETF* 38 088 37 976 1 930 859 RBC Target 2022 Corporate Bond Index ETF* 38 171 37 976

TOTAL ETF UNITS 192 690 190 124 99.9 Less: Transaction costs (41) – –TOTAL INVESTMENTS $ 192 649 190 124 99.9 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 114 0.1NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 190 238 100.0

* Investment in related party (see note 8 in the generic notes).

137

FINANCIAL STATEMENTS

The accompanying notes are an integral part of these financial statements.


Statements of Financial Position (in $000s except per unit amounts)

(see note 2 in the generic notes)December 31

2016December 31

2015

ASSETSInvestments at fair value $ 190 124 $ 148 920 Cash 1 4 Due from investment dealers – 162 Subscriptions receivable 975 –Dividends receivable, interest accrued and other assets 501 426 TOTAL ASSETS 191 601 149 512 LIABILITIESDue to investment dealers 975 –Distributions payable 388 589 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 363 589 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 190 238 $ 148 923

Investments at cost $ 192 649 $ 150 578

NAV PER UNIT $ 19.51 $ 19.73

Statements of Comprehensive Income (in $000s except per unit amounts)

For the periods ended December 31 (see note 2 in the generic notes) 2016 2015

INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 5 563 $ 4 143Securities lending revenue (see note 7 in the generic notes) 11 12 Net realized gain (loss) on investments (1 199) (774)Change in unrealized gain (loss) on investments (867) (1 345)TOTAL INCOME (LOSS) 3 508 2 036 EXPENSES (see notes – ETF Specific Information)Transaction costs 40 47 TOTAL EXPENSES 40 47 INCREASE (DECREASE) IN NAV $ 3 468 $ 1 989 INCREASE (DECREASE) IN NAV PER UNIT $ 0.40 $ 0.33

138




Statements of Cash Flow (in $000s)

For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 3 468 $ 1 989 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 1 199 774 Change in unrealized loss (gain) on investments 867 1 344 (Increase) decrease in accrued receivables (1 050) (251)Increase (decrease) in accrued payables 975 – Cost of investments purchased (86 117) (132 332)Proceeds on sales of investments 43 009 50 179NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (37 649) (78 297)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 47 276 86 199 Cash paid on redemption of redeemable units (3 939) (4 044)Distributions paid to holders of redeemable units (5 691) (3 857)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 37 646 $ 78 298 Net increase (decrease) in cash for the period (3) 1 Cash (bank overdraft), beginning of period 4 3 CASH (BANK OVERDRAFT), END OF PERIOD $ 1 $ 4

Interest received (paid) $ 5 488 $ – Dividends received, net of withholding taxes $ – $ 3 891

139




Statements of Changes in NAV (in $000s)

For the periods ended December 31 (see note 2 in the generic notes)

Total2016 2015

NAV AT BEGINNING OF PERIOD $ 148 923 $ 72 016 INCREASE (DECREASE) IN NAV 3 468 1 989 Early redemption fees – –Proceeds from redeemable units issued 47 276 83 201 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (3 939) (4 044)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 43 337 79 157 Distributions from net income (5 452) (4 239)Distributions from net gains – – Distributions from capital (38) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (5 490) (4 239)NET INCREASE (DECREASE) IN NAV 41 315 76 907 NAV AT END OF PERIOD $ 190 238 $ 148 923

140

NOTES TO FINANCIAL STATEMENTS – ETF SPECIFIC INFORMATION

Please see the generic notes at the back of the financial statements.

December 31, 2016


General information (see note 1 in the generic notes)

The investment objective of the ETF is to provide unitholders

with exposure to the performance of a diversified portfolio

of Canadian corporate bonds, divided (“laddered”) into

five groupings with staggered maturities from one to five

years, which will provide regular income while seeking to

preserve capital.

Financial instrument risk and capital management (see note 4 in the generic notes)

Credit risk (%)

The table below summarizes the ETF’s credit risk exposure

grouped by credit ratings as at:

RatingDecember 31

2016December 31

2015

AAA 1.8 1.1AA 34.5 31.6A 40.5 44.3BBB 23.2 23.0Total 100.0 100.0

Concentration risk (%)

The table below summarizes the ETF’s investment portfolio

(after consideration of derivative products, if any) as at:

Investment mixDecember 31

2016December 31

2015

Corporate Bonds Financials 61.4 65.3 Communication 11.7 11.2 Infrastructure 8.0 9.0 Energy 7.3 7.4 Industrials 4.8 4.7 Real Estate 2.0 1.4Provincial Bonds 4.7 –Other Net Assets 0.1 1.0 Total 100.0 100.0

Interest rate risk (%)

The table below summarizes the ETF’s exposure to interest

rate risk by remaining term to maturity as at:

Term to maturityDecember 31

2016December 31

2015

Less than 1 year – –1 – 5 years 80.0 80.05 – 10 years 20.0 20.0> 10 years – –Total 100.0 100.0

As at December 31, 2016, had prevailing interest rates risen or

lowered by 1%, with all other factors kept constant, the ETF’s

net assets may have decreased or increased, respectively, by

approximately 3.3% (December 31, 2015 – 3.3%). In practice,

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

December 31, 2016 and 2015.

December 31, 2016 Level 1 Level 2 Level 3 Total

ETF units 190 124 – – 190 124 Total financial instruments 190 124 – – 190 124 % of total portfolio 100.0 – – 100.0



For the periods ended December 31, 2016 and 2015, there

were no transfers of financial instruments between Level 1,

Level 2 and Level 3.

Management fees (see note 8 in the generic notes)

A management fee is not charged directly to the ETF as this

ETF invests in the units of other RBC ETFs.

Underlying mutual fund ownership interest (%)

The table below summarizes the ETF’s interest in the

underlying mutual funds as a percentage of NAV, and the

ETF’s ownership interest as a percentage of the net assets of

the underlying funds (“Ownership”). All underlying funds are

established and conduct business in Canada, and have an

associate relationship to the ETF.

December 31 2016

December 31 2015

NAV Ownership NAV Ownership

RBC Target 2017 Corporate Bond Index ETF – – 20.0 38.6RBC Target 2018 Corporate Bond Index ETF 20.0 34.0 20.0 39.6RBC Target 2019 Corporate Bond Index ETF 20.0 29.9 20.0 32.9RBC Target 2020 Corporate Bond Index ETF 20.0 40.4 20.0 50.9RBC Target 2021 Corporate Bond Index ETF 20.0 42.2 20.0 64.1RBC Target 2022 Corporate Bond Index ETF 20.0 61.3 – –

141



December 31, 2016

Taxes ($000s) (see note 6 in the generic notes)

The non-capital and capital losses as at December 31, 2016

for the ETF were approximately:

Capital losses 1 975Non-capital losses –

Redeemable units (000s) (see note 5 in the generic notes)

The NAV per unit is arrived at by dividing the net asset

value of the ETF by the total number of units outstanding

at the end of each trading day of the ETF. The ETF’s capital

is managed in accordance with the investment objective as

outlined in the Prospectus.


Opening units 7 550 3 600 Issued number of units 2 400 4 150 Reinvested number of units – – Redeemed number of units (200) (200)Ending number of units 9 750 7 550

Transaction costs ($000s except %)

Transaction costs, including brokerage commissions, in

consideration of portfolio transactions for the periods ended:

December 31 2016

December 31 2015

$ % $ %

Total transaction costs 40 100 47 100Related-party brokerage commissions* 40 100 47 100Commission arrangements† – – – –

* See note 8 in the generic notes.† Commission arrangements are part of commission amounts paid to dealers. The ETF uses

commission arrangements (formerly known as “soft dollars”) for research and/or order execution goods and services.


Securities lending revenue ($000s except %) (see note 7 in the generic notes)

Fair value of securities on loan and collateral received as at:

December 31 2016

December 31 2015

Fair value of securities loaned 320 243Fair value of collateral received 326 248

The table below provides a reconciliation of the gross revenue

generated from the securities lending transactions of the ETF

to the securities lending revenue disclosed in the Statements of

Comprehensive Income.

December 31 2016

December 31 2015

$ % $ %

Gross revenue 17 100 19 100RBC IS (paid) (6) (35) (7) (35)Tax withheld – – – – ETF revenue 11 65 12 65

142



December 31, 2016



Par Value Coupon Fair % of Net (000s) Security Rate % Maturity Cost Value Assets

CANADIAN BONDSFEDERAL & PROVINCIAL 7 334 Canada Housing Trust No. 1 1.950 15-Jun-2019 $ 7 504 $ 7 498 7 140 Canadian Government Bond 4.250 01-Jun-2018 7 510 7 494 3 783 Province of Alberta 1.250 01-Jun-2020 3 766 3 765 3 495 Province of British Columbia 3.250 18-Dec-2021 3 774 3 763 7 034 Province of Ontario 3.150 02-Jun-2022 7 519 7 505 3 372 Province of Quebec 4.500 01-Dec-2020 3 831 3 756 3 347 Province of Quebec 4.250 01-Dec-2021 3 757 3 746

TOTAL CANADIAN BONDS 37 661 37 527 30.0


ETF UNITS 895 476 RBC Target 2018 Corporate Bond Index ETF* $ 17 590 $ 17 454 877 342 RBC Target 2019 Corporate Bond Index ETF* 17 592 17 440 851 197 RBC Target 2020 Corporate Bond Index ETF* 17 563 17 427 860 299 RBC Target 2021 Corporate Bond Index ETF* 17 616 17 408 885 138 RBC Target 2022 Corporate Bond Index ETF* 17 492 17 409

TOTAL ETF UNITS 87 853 87 138 69.7Less: Transaction costs (8) – –TOTAL INVESTMENTS $ 125 506 124 665 99.7OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 352 0.3NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 125 017 100.0


143




Statement of Financial Position (in $000s except per unit amounts)


2016

ASSETSInvestments at fair value $ 124 665 Cash 254 Subscriptions receivable 983 Dividends receivable, interest accrued and other assets 323 TOTAL ASSETS 126 225 LIABILITIESDue to investment dealers 982 Distributions payable 221 Accounts payable and accrued expenses 5 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 208 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 125 017

Investments at cost $ 125 506

NAV PER UNIT $ 19.69

Statement of Comprehensive Income (in $000s except per unit amounts)

For the period ended December 31 (see note 2 in the generic notes) 2016

INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 1 685 Securities lending revenue (see note 7 in the generic notes) 4 Net realized gain (loss) on investments (484)Change in unrealized gain (loss) on investments (841)TOTAL INCOME (LOSS) 364 EXPENSES (see notes – ETF Specific Information)Management fees 23GST/HST 3Transaction costs 17TOTAL EXPENSES 43 INCREASE (DECREASE) IN NAV $ 321 INCREASE (DECREASE) IN NAV PER UNIT $ 0.12

144




Statement of Cash Flow (in $000s)

For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 321 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments 484 Change in unrealized loss (gain) on investments 841 (Increase) decrease in accrued receivables (323)Increase (decrease) in accrued payables 5 Cost of investments purchased (173 620)Proceeds on sales of investments 48 612 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (123 680)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 125 322 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (1 388)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 123 934 Net increase (decrease) in cash for the period 254 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 254

Interest received (paid) $ 1 362 Dividends received, net of withholding taxes $ –

145




Statement of Changes in NAV (in $000s)

For the period ended December 31 (see note 2 in the generic notes)

Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 321 Early redemption fees – Proceeds from redeemable units issued 126 305 Reinvestments of distributions to holders of redeemable units – Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 126 305 Distributions from net income (1 584)Distributions from net gains – Distributions from capital (25)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (1 609)NET INCREASE (DECREASE) IN NAV 125 017 NAV AT END OF PERIOD $ 125 017

146



December 31, 2016




with exposure primarily to the performance of a diversified

portfolio of Canadian corporate and government bonds,

divided (“laddered”) into five groupings with staggered

maturities from one to five years, which will provide regular

income while seeking to preserve capital.

The ETF was started in January 2016.


Credit risk (%)



RatingDecember 31

2016

AAA 16.3AA 33.2A 34.4BBB 16.1Total 100.0





2016

Corporate Bonds Financials 42.7 Communication 8.2 Infrastructure 5.6 Energy 5.1 Industrials 3.4 Real Estate 1.4Federal and Provincial Bonds 33.3Other Net Assets 0.3Total 100.0





2016

Less than 1 year –1 – 5 years 80.05 – 10 years 20.0> 10 years –Total 100.0




approximately 3.3%. In practice, actual results could differ from

this sensitivity analysis and the difference could be material.



December 31, 2016.


ETF units 87 138 – – 87 138 Fixed-income and debt securities – 37 527 – 37 527 Total financial instruments 87 138 37 527 – 124 665 % of total portfolio 69.9 30.1 – 100.0

For the period ended December 31, 2016, there were no

transfers of financial instruments between Level 1, Level 2

and Level 3.


RBC GAM is the manager, trustee and portfolio manager of

the ETF. A management fee is charged indirectly and directly

to the ETF: indirectly as this ETF invests in the units of other

RBC ETFs and the other RBC ETFs pay management fees;

and directly for other portfolio manager activities. The total

management fee will not exceed 0.22%, before GST/HST, of

the daily net asset value of the ETF.








December 31 2016

NAV Ownership

RBC Target 2018 Corporate Bond Index ETF 14.0 15.6RBC Target 2019 Corporate Bond Index ETF 14.0 13.7RBC Target 2020 Corporate Bond Index ETF 14.0 18.5RBC Target 2021 Corporate Bond Index ETF 14.0 19.3RBC Target 2022 Corporate Bond Index ETF 14.0 28.1

147



December 31, 2016




Capital losses 493Non-capital losses –








Opening units – Issued number of units 6 350 Reinvested number of units – Redeemed number of units – Ending number of units 6 350



consideration of portfolio transactions for the period ended:

December 31 2016

$ %

Total transaction costs 17 100Related-party brokerage commissions* 17 100Commission arrangements† – –






December 31 2016

Fair value of securities loaned 145Fair value of collateral received 148



to the securities lending revenue disclosed in the Statement of


December 31 2016

$ %

Gross revenue 6 100 RBC IS (paid) (2) (35)Tax withheld – – ETF revenue 4 65

148



December 31, 2016




CANADIAN BONDSCORPORATE 823 407 International Inc. 3.870 24-Nov-2017 $ 864 $ 842 822 Alimentation Couche-Tard Inc. 2.861 01-Nov-2017 835 832 1 241 Bank of Montreal 5.450 17-Jul-2017 1 346 1 270 956 Bank of Montreal 4.550 01-Aug-2017 1 017 975 2 275 Bank of Montreal 2.240 11-Dec-2017 2 300 2 299 2 783 Bank of Nova Scotia 4.100 08-Jun-2017 2 927 2 820 1 871 Bank of Nova Scotia*, FRN 2.898 03-Aug-2022 1 908 1 887 942 Bell Canada 4.370 13-Sep-2017 990 963 1 592 Caisse Centrale Desjardins 3.502 05-Oct-2017 1 655 1 621 2 487 Canadian Imperial Bank of Commerce 3.950 14-Jul-2017 2 612 2 526 2 196 Canadian Imperial Bank of Commerce 2.350 18-Oct-2017 2 231 2 218 1 300 Ford Credit Canada Ltd. 4.875 08-Feb-2017 1 361 1 304 1 179 Greater Toronto Airports Authority 4.850 01-Jun-2017 1 262 1 198 2 663 HSBC Bank Canada 3.558 04-Oct-2017 2 768 2 711 1 069 HSBC Bank Canada*, FRN 4.800 10-Apr-2022 1 124 1 077 1 595 Hydro One Inc. 5.180 18-Oct-2017 1 737 1 646 1 300 Manufacturers Life Insurance Co.*, FRN 4.165 01-Jun-2022 1 352 1 315 1 587 National Bank of Canada 2.689 21-Aug-2017 1 615 1 603 763 National Bank of Canada*, FRN 3.261 11-Apr-2022 779 767 1 240 Rogers Communications Inc. 3.000 06-Jun-2017 1 267 1 250 3 441 Royal Bank of Canada† 3.660 25-Jan-2017 3 561 3 445 1 001 Shaw Communications Inc. 5.700 02-Mar-2017 1 069 1 008 1 869 Sun Life Financial Inc.*, FRN 4.380 02-Mar-2022 1 940 1 878 1 778 TELUS Corp. 4.950 15-Mar-2017 1 883 1 791 3 195 Toronto-Dominion Bank*, FRN 5.763 18-Dec-2106 3 495 3 324 641 Toronto Hydro Corp. 5.150 14-Nov-2017 698 663 765 TransCanada PipeLines Ltd. 5.100 11-Jan-2017 812 765 1 185 VW Credit Canada Inc. 2.450 14-Nov-2017 1 198 1 195

TOTAL INVESTMENTS $ 46 606 45 193 98.8OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 545 1.2NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 45 738 100.0

* Interest rate risk (see note 4 in the generic notes).† Investment in related party (see note 8 in the generic notes).

149






2016December 31

2015

ASSETSInvestments at fair value $ 45 193 $ 76 181 Cash 343 380 Dividends receivable, interest accrued and other assets 467 851 TOTAL ASSETS 46 003 77 412 LIABILITIESDistributions payable 250 261 Accounts payable and accrued expenses 15 20 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 265 281 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 45 738 $ 77 131


NAV PER UNIT $ 19.06 $ 19.53



INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 3 422 $ 2 781 Securities lending revenue (see note 7 in the generic notes) 4 1 Net realized gain (loss) on investments (2 200) (108)Change in unrealized gain (loss) on investments 292 (1 169)TOTAL INCOME (LOSS) 1 518 1 505 EXPENSES (see notes – ETF Specific Information)Management fees 219 178 Independent Review Committee costs 4 3 GST/HST 22 16 TOTAL EXPENSES 245 197 INCREASE (DECREASE) IN NAV $ 1 273 $ 1 308 INCREASE (DECREASE) IN NAV PER UNIT $ 0.28 $ 0.37

150




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 273 $ 1 308 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes – –Net realized loss (gain) on investments 2 200 108 Change in unrealized loss (gain) on investments (292) 1 169 (Increase) decrease in accrued receivables 384 (265)Increase (decrease) in accrued payables (5) 5 Cost of investments purchased (44 539) (27 611)Proceeds on sales of investments 73 619 3 941 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 32 640 (21 345)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 31 869 26 794 Cash paid on redemption of redeemable units (61 274) (2 936)Distributions paid to holders of redeemable units (3 272) (2 398)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (32 677) $ 21 460 Net increase (decrease) in cash for the period (37) 115 Cash (bank overdraft), beginning of period 380 265 CASH (BANK OVERDRAFT), END OF PERIOD $ 343 $ 380

Interest received (paid) $ 3 806 $ 2 516 Dividends received, net of withholding taxes $ – $ –


151






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 77 131 $ 54 495 INCREASE (DECREASE) IN NAV 1 273 1 308 Early redemption fees – –Proceeds from redeemable units issued 31 869 26 794 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (61 274) (2 936)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (29 405) 23 858 Distributions from net income (3 261) (2 530)Distributions from net gains – – Distributions from capital – – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (3 261) (2 530)NET INCREASE (DECREASE) IN NAV (31 393) 22 636 NAV AT END OF PERIOD $ 45 738 $ 77 131

152



December 31, 2016



The investment objective of the ETF is to provide income for

a limited period of time ending on its termination date by

replicating, to the extent possible, the investment results that

correspond generally to the performance, before fees and

expenses, of the FTSE TMX Canada 2017 Maturity Corporate

Bond Index*.


Credit risk (%)



RatingDecember 31

2016December 31

2015

AA 41.6 35.6A 36.4 42.7BBB 22.0 21.7Total 100.0 100.0





2016December 31

2015

Corporate Bonds Financials 74.8 72.8 Communication 11.0 14.0 Infrastructure 9.5 8.8 Industrials 1.8 1.6 Energy 1.7 1.6 Other Net Assets 1.2 1.2 Total 100.0 100.0





2016December 31

2015

Less than 1 year 100.0 –1 – 5 years – 100.05 – 10 years – –> 10 years – –Total 100.0 100.0





actual results could differ from this sensitivity analysis and

the difference could be material.





Fixed-income and debt securities – 45 193 – 45 193 Total financial instruments – 45 193 – 45 193 % of total portfolio – 100.0 – 100.0







RBC GAM is paid a management fee per annum of the NAV by

the ETF as compensation for its services.

The management fee of the ETF is calculated at the following

annual percentage, before GST/HST, of the daily net asset

value of the ETF.

Until December 31, 2016 0.25%Effective January 1, 2017 0.20%





153



December 31, 2016









Opening units 3 950 2 750 Issued number of units 1 650 1 350 Reinvested number of units – – Redeemed number of units (3 200) (150)Ending number of units 2 400 3 950



December 31 2016

December 31 2015

Fair value of securities loaned 1 831 3 422Fair value of collateral received 1 867 3 491





December 31 2016

December 31 2015

$ % $ %

Gross revenue 6 100 2 100RBC IS (paid) (2) (35) (1) (35)Tax withheld – – – –ETF revenue 4 65 1 65

Investments by other related investment funds (%) (see note 8 in the generic notes)

The table below summarizes, as a percentage, the net assets

of the ETF owned by other related investment funds as at:

December 31 2016

December 31 2015

RBC 1-5 Year Laddered Corporate Bond ETF – 38.6

154



December 31, 2016




CANADIAN BONDSCORPORATE 3 596 American Express Canada Credit Corp. 2.310 29-Mar-2018 $ 3 639 $ 3 643 832 Aon Finance NS 1 ULC 4.760 08-Mar-2018 891 859 5 191 Bank of Montreal 3.210 13-Sep-2018 5 410 5 352 4 539 Bank of Montreal*, FRN 6.170 28-Mar-2023 5 065 4 790 5 017 Bank of Nova Scotia 2.242 22-Mar-2018 5 075 5 080 4 705 Bank of Nova Scotia 2.750 13-Aug-2018 4 832 4 810 3 128 bcIMC Realty Corp. 2.790 02-Aug-2018 3 217 3 198 3 127 Bell Canada 4.400 16-Mar-2018 3 331 3 241 1 251 Bell Canada 4.880 26-Apr-2018 1 346 1 308 2 508 Bell Canada 3.500 10-Sep-2018 2 613 2 592 2 802 Canadian Imperial Bank of Commerce*, FRN 6.000 06-Jun-2023 3 130 2 973 2 517 Dollarama Inc. 3.095 05-Nov-2018 2 578 2 579 1 869 Enbridge Pipelines Inc. 6.620 19-Nov-2018 2 173 2 047 935 Enmax Corp. 6.150 19-Jun-2018 1 038 989 1 257 EPCOR Utilities Inc. 5.800 31-Jan-2018 1 392 1 318 1 107 Finning International Inc. 6.020 01-Jun-2018 1 235 1 169 3 127 Ford Credit Canada Ltd. 3.700 02-Aug-2018 3 253 3 218 3 128 Greater Toronto Airports Authority 5.260 17-Apr-2018 3 455 3 291 3 133 Great-West Lifeco Finance Delaware LP II*, FRN 7.127 26-Jun-2068 3 572 3 356 6 270 HSBC Bank Canada 2.078 26-Nov-2018 6 314 6 333 4 697 Hydro One Inc. 2.780 09-Oct-2018 4 851 4 817 2 406 Manulife Financial Corp. 5.505 26-Jun-2018 2 645 2 543 4 697 National Bank of Canada 2.794 09-Aug-2018 4 827 4 805 5 489 Royal Bank of Canada† 3.770 30-Mar-2018 5 814 5 665 4 607 Royal Bank of Canada† 2.890 11-Oct-2018 4 751 4 728 3 132 Sobeys Inc. 3.520 08-Aug-2018 3 230 3 171 1 953 Sun Life Financial Inc.*, FRN 5.590 30-Jan-2023 2 106 2 034 2 160 Suncor Energy Inc. 5.800 22-May-2018 2 399 2 289 3 560 Toronto-Dominion Bank*, FRN 5.828 09-Jul-2023 3 970 3 782 3 123 Toyota Credit Canada Inc. 2.750 18-Jul-2018 3 205 3 187 3 137 Toyota Credit Canada Inc. 2.800 21-Nov-2018 3 226 3 214 2 049 VW Credit Canada Inc. 2.800 20-Aug-2018 2 090 2 084 6 274 Wells Fargo Canada Corp. 2.780 15-Nov-2018 6 443 6 429

TOTAL INVESTMENTS $ 113 116 110 894 99.1OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 179 0.9NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 112 073 100.0


155






2016December 31

2015

ASSETSInvestments at fair value $ 110 894 $ 74 470 Cash 487 304 Dividends receivable, interest accrued and other assets 1 037 737 TOTAL ASSETS 112 418 75 511 LIABILITIESDistributions payable 316 213 Accounts payable and accrued expenses 29 19 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 345 232 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 112 073 $ 75 279


NAV PER UNIT $ 19.49 $ 19.81



INCOME (see note 3 in the generic notes) Interest for distribution purposes $ 3 353 $ 2 324 Securities lending revenue (see note 7 in the generic notes) 10 4 Net realized gain (loss) on investments (126) 28 Change in unrealized gain (loss) on investments (1 424) (789)TOTAL INCOME (LOSS) 1 813 1 567 EXPENSES (see notes – ETF Specific Information)Management fees 231 160 Independent Review Committee costs 4 3 GST/HST 23 15 TOTAL EXPENSES 258 178 INCREASE (DECREASE) IN NAV $ 1 555 $ 1 389 INCREASE (DECREASE) IN NAV PER UNIT $ 0.33 $ 0.44

156




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 555 $ 1 389 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes – –Net realized loss (gain) on investments 126 (28)Change in unrealized loss (gain) on investments 1 424 789 (Increase) decrease in accrued receivables (300) (277)Increase (decrease) in accrued payables 10 7 Cost of investments purchased (47 299) (34 112)Proceeds on sales of investments 9 325 3 240NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (35 159) (28 992)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 40 285 32 143 Cash paid on redemption of redeemable units (1 967) (1 012)Distributions paid to holders of redeemable units (2 976) (1 971)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 35 342 $ 29 160 Net increase (decrease) in cash for the period 183 168 Cash (bank overdraft), beginning of period 304 136 CASH (BANK OVERDRAFT), END OF PERIOD $ 487 $ 304



157






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 75 279 $ 45 850 INCREASE (DECREASE) IN NAV 1 555 1 389 Early redemption fees – –Proceeds from redeemable units issued 40 285 31 148 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (1 967) (1 012)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 38 318 30 136 Distributions from net income (3 075) (2 096)Distributions from net gains – – Distributions from capital (4) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (3 079) (2 096)NET INCREASE (DECREASE) IN NAV 36 794 29 429 NAV AT END OF PERIOD $ 112 073 $ 75 279

158



December 31, 2016








Bond Index*.


Credit risk (%)



RatingDecember 31

2016December 31

2015

AAA 5.1 5.3AA 31.0 31.8A 42.9 43.1BBB 21.0 19.8Total 100.0 100.0





2016December 31

2015

Corporate Bonds Financials 70.3 69.3 Infrastructure 9.3 9.6 Communication 6.3 6.6 Industrials 6.1 6.4 Energy 3.9 4.1 Real Estate 2.9 2.9 Other Net Assets 1.2 1.1 Total 100.0 100.0





2016December 31

2015

Less than 1 year – –1 – 5 years 100.0 100.05 – 10 years – –> 10 years – –Total 100.0 100.0






















value of the ETF.






159



December 31, 2016









Opening units 3 800 2 300 Issued number of units 2 050 1 550 Reinvested number of units – – Redeemed number of units (100) (50)Ending number of units 5 750 3 800



December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %





December 31 2016

December 31 2015

RBC 1-5 Year Laddered Canadian Bond ETF 15.6 –RBC 1-5 Year Laddered Corporate Bond ETF 34.0 39.6Total 49.6 39.6

160



December 31, 2016




CANADIAN BONDSCORPORATE 12 282 Bank of Nova Scotia*, FRN 3.036 18-Oct-2024 $ 12 605 $ 12 674 7 058 Brookfield Asset Management Inc. 3.950 09-Apr-2019 7 401 7 352 2 935 Cameco Corp. 5.670 02-Sep-2019 3 263 3 146 3 703 Canadian Imperial Bank of Commerce 2.350 24-Jun-2019 3 809 3 780 3 524 CU Inc. 6.800 13-Aug-2019 4 217 3 998 4 708 Enbridge Inc. 4.770 02-Sep-2019 5 139 5 068 2 164 Enbridge Pipelines Inc. 4.490 12-Nov-2019 2 383 2 343 2 345 Fairfax Financial Holdings Ltd. 7.500 19-Aug-2019 2 690 2 630 7 057 Greater Toronto Airports Authority 5.960 20-Nov-2019 8 296 7 964 4 277 IGM Financial Inc. 7.350 08-Apr-2019 5 059 4 792 2 773 Intact Financial Corp. 5.410 03-Sep-2019 3 109 3 040 5 365 Manulife Financial Corp. 7.768 08-Apr-2019 6 412 6 054 11 771 National Bank of Canada 2.404 28-Oct-2019 11 989 12 035 2 938 NAV Canada 5.304 17-Apr-2019 3 327 3 197 1 578 Rogers Communications Inc. 5.380 04-Nov-2019 1 773 1 735 6 370 Royal Bank of Canada† 2.980 07-May-2019 6 612 6 583 5 885 Royal Bank of Canada*†, FRN 2.990 06-Dec-2024 6 025 6 074 7 355 Shaw Communications Inc. 5.650 01-Oct-2019 8 239 8 025 1 755 SNC-Lavalin Group Inc. 6.190 03-Jul-2019 1 990 1 899 3 409 Sun Life Financial Inc. 5.700 02-Jul-2019 3 863 3 746 874 TELUS Corp. 5.050 04-Dec-2019 974 955 2 938 Toronto Hydro Corp. 4.490 12-Nov-2019 3 253 3 181 1 721 TransAlta Corp. 6.400 18-Nov-2019 1 836 1 833 12 327 Wells Fargo Canada Corp. 2.944 25-Jul-2019 12 756 12 734 1 051 Westcoast Energy Inc. 5.600 16-Jan-2019 1 171 1 128

TOTAL INVESTMENTS $ 128 191 125 966 99.0OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 258 1.0NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 127 224 100.0


161






2016December 31

2015

ASSETSInvestments at fair value $ 125 966 $ 89 682 Cash 316 89 Due from investment dealers – 220 Dividends receivable, interest accrued and other assets 1 384 1 004 TOTAL ASSETS 127 666 90 995 LIABILITIESDistributions payable 410 306 Accounts payable and accrued expenses 32 23 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 442 329 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 127 224 $ 90 666


NAV PER UNIT $ 19.88 $ 20.15



INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 4 619 $ 3 176 Securities lending revenue (see note 7 in the generic notes) 4 5 Net realized gain (loss) on investments (229) (54)Change in unrealized gain (loss) on investments (1 474) (877)TOTAL INCOME (LOSS) 2 920 2 250 EXPENSES (see notes – ETF Specific Information)Management fees 275 196 Independent Review Committee costs 3 3 GST/HST 26 16 TOTAL EXPENSES 304 215 INCREASE (DECREASE) IN NAV $ 2 616 $ 2 035 INCREASE (DECREASE) IN NAV PER UNIT $ 0.48 $ 0.53

162




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 2 616 $ 2 035 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes – –Net realized loss (gain) on investments 229 54 Change in unrealized loss (gain) on investments 1 474 877 (Increase) decrease in accrued receivables (380) (341)Increase (decrease) in accrued payables 9 7 Cost of investments purchased (58 039) (42 172)Proceeds on sales of investments 20 272 11 546 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (33 819) (27 994)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 38 127 30 733 Cash paid on redemption of redeemable units – – Distributions paid to holders of redeemable units (4 081) (2 766)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 34 046 $ 27 967 Net increase (decrease) in cash for the period 227 (27)Cash (bank overdraft), beginning of period 89 116 CASH (BANK OVERDRAFT), END OF PERIOD $ 316 $ 89



163






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 90 666 $ 60 811 INCREASE (DECREASE) IN NAV 2 616 2 035 Early redemption fees – –Proceeds from redeemable units issued 38 127 30 733 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units – – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 38 127 30 733 Distributions from net income (4 182) (2 913)Distributions from net gains – – Distributions from capital (3) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (4 185) (2 913)NET INCREASE (DECREASE) IN NAV 36 558 29 855 NAV AT END OF PERIOD $ 127 224 $ 90 666

164



December 31, 2016








Bond Index*.


Credit risk (%)



RatingDecember 31

2016December 31

2015

AA 20.3 17.7A 56.9 57.7BBB 22.8 24.6Total 100.0 100.0





2016December 31

2015

Corporate Bonds Financials 58.3 59.5 Infrastructure 11.3 11.2 Energy 11.3 10.9 Industrials 9.7 8.7 Communication 8.4 8.6 Other Net Assets 1.0 1.1 Total 100.0 100.0





2016December 31

2015























value of the ETF.






165



December 31, 2016









Opening units 4 500 3 000 Issued number of units 1 900 1 500 Reinvested number of units – – Redeemed number of units – – Ending number of units 6 400 4 500



December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %





December 31 2016

December 31 2015


166



December 31, 2016




CANADIAN BONDSCORPORATE 1 733 407 International Inc. 4.990 16-Jun-2020 $ 1 993 $ 1 929 6 373 Bank of Montreal 2.840 04-Jun-2020 6 637 6 608 7 011 Bank of Nova Scotia 2.270 13-Jan-2020 7 164 7 140 1 813 Bank of Nova Scotia 2.090 09-Sep-2020 1 842 1 832 7 824 Caisse Centrale Desjardins 1.748 02-Mar-2020 7 817 7 832 5 215 Capital Desjardins Inc. 5.187 05-May-2020 5 877 5 721 2 899 Enbridge Inc. 4.530 09-Mar-2020 3 153 3 121 2 020 Enbridge Pipelines Inc. 4.450 06-Apr-2020 2 232 2 190 795 Fairfax Financial Holdings Ltd. 7.250 22-Jun-2020 920 907 2 898 General Motors Financial of Canada Ltd. 3.080 22-May-2020 2 940 2 938 1 285 Genworth MI Canada Inc. 5.680 15-Jun-2020 1 427 1 388 2 879 Great-West Lifeco Inc. 4.650 13-Aug-2020 3 229 3 159 6 086 HSBC Bank Canada 2.938 14-Jan-2020 6 315 6 278 1 446 HSBC Bank Canada 1.816 07-Jul-2020 1 436 1 438 1 741 Hydro One Inc. 4.400 01-Jun-2020 1 952 1 899 1 010 Loblaw Companies Ltd. 5.220 18-Jun-2020 1 144 1 119 5 795 National Bank of Canada 1.742 03-Mar-2020 5 789 5 799 1 735 OMERS Realty Corp. 3.203 24-Jul-2020 1 835 1 818 2 606 Rogers Communications Inc. 4.700 29-Sep-2020 2 893 2 858 8 692 Royal Bank of Canada* 1.920 17-Jul-2020 8 791 8 732 1 450 Shaw Communications Inc. 5.500 07-Dec-2020 1 650 1 610 2 901 Sun Life Financial Inc.†, FRN 2.600 25-Sep-2025 2 895 2 926 1 733 TELUS Corp. 5.050 23-Jul-2020 1 955 1 912 438 Teranet Holdings LP 4.807 16-Dec-2020 485 474 2 899 Thomson Reuters Corp. 4.350 30-Sep-2020 3 165 3 121 1 010 Toronto-Dominion Bank 1.693 02-Apr-2020 1 010 1 010 6 559 Toronto-Dominion Bank 2.563 24-Jun-2020 6 774 6 742 725 Westcoast Energy Inc. 4.570 02-Jul-2020 798 784


* Investment in related party (see note 8 in the generic notes).† Interest rate risk (see note 4 in the generic notes).

167






2016December 31

2015

ASSETSInvestments at fair value $ 93 284 $ 57 882 Cash 388 280 Dividends receivable, interest accrued and other assets 744 471 TOTAL ASSETS 94 416 58 633 LIABILITIESDistributions payable 216 128 Accounts payable and accrued expenses 24 15 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 240 143 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 94 176 $ 58 490


NAV PER UNIT $ 20.47 $ 20.52



INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 2 302 $ 1 563 Securities lending revenue (see note 7 in the generic notes) 5 1 Net realized gain (loss) on investments (40) (126)Change in unrealized gain (loss) on investments (383) (603)TOTAL INCOME (LOSS) 1 884 835 EXPENSES (see notes – ETF Specific Information)Management fees 190 116 Independent Review Committee costs 4 3 GST/HST 20 13 TOTAL EXPENSES 214 132 INCREASE (DECREASE) IN NAV $ 1 670 $ 703 INCREASE (DECREASE) IN NAV PER UNIT $ 0.45 $ 0.32

168




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 670 $ 703 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 40 126 Change in unrealized loss (gain) on investments 383 603 (Increase) decrease in accrued receivables (273) (340)Increase (decrease) in accrued payables 9 14 Cost of investments purchased (46 407) (67 805)Proceeds on sales of investments 10 582 22 321NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (33 996) (44 378)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 36 086 45 840 Cash paid on redemption of redeemable units – – Distributions paid to holders of redeemable units (1 982) (1 285)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 34 104 $ 44 555 Net increase (decrease) in cash for the period 108 177 Cash (bank overdraft), beginning of period 280 103 CASH (BANK OVERDRAFT), END OF PERIOD $ 388 $ 280



169






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 58 490 $ 14 343 INCREASE (DECREASE) IN NAV 1 670 703 Early redemption fees – –Proceeds from redeemable units issued 36 086 44 818 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units – – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 36 086 44 818 Distributions from net income (2 068) (1 374)Distributions from net gains – – Distributions from capital (2) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (2 070) (1 374)NET INCREASE (DECREASE) IN NAV 35 686 44 147 NAV AT END OF PERIOD $ 94 176 $ 58 490

170



December 31, 2016








Bond Index*.


Credit risk (%)



RatingDecember 31

2016December 31

2015

AA 51.0 46.2A 25.0 29.4BBB 24.0 24.4Total 100.0 100.0





2016December 31

2015

Corporate Bonds Financials 74.9 72.9 Communication 10.1 11.8 Energy 6.4 7.5 Infrastructure 4.1 4.8 Real Estate 1.9 – Industrials 1.7 2.0 Other Net Assets 0.9 1.0 Total 100.0 100.0





2016December 31

2015























value of the ETF.






171



December 31, 2016









Opening units 2 850 700 Issued number of units 1 750 2 150 Reinvested number of units – – Redeemed number of units – – Ending number of units 4 600 2 850



December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %





December 31 2016

December 31 2015


172



December 31, 2016




CANADIAN BONDSCORPORATE 2 868 407 International Inc. 4.300 26-May-2021 $ 3 216 $ 3 154 3 731 Bank of Montreal 3.400 23-Apr-2021 3 984 3 956 2 453 Bank of Nova Scotia 3.270 11-Jan-2021 2 599 2 584 2 329 Bank of Nova Scotia 2.873 04-Jun-2021 2 426 2 417 2 508 bcIMC Realty Corp. 2.100 03-Jun-2021 2 554 2 520 2 272 Brookfield Asset Management Inc. 5.300 01-Mar-2021 2 540 2 506 3 320 Capital Desjardins Inc.*, FRN 4.954 15-Dec-2026 3 744 3 694 3 586 Daimler Canada Finance Inc. 1.910 08-Jul-2021 3 558 3 544 2 868 Enbridge Inc. 3.160 11-Mar-2021 2 913 2 962 1 700 Fairfax Financial Holdings Ltd. 6.400 25-May-2021 1 918 1 924 5 383 Ford Credit Canada Ltd. 2.580 10-May-2021 5 352 5 346 2 867 Honda Canada Finance Inc. 2.155 18-Feb-2021 2 914 2 890 2 867 Honda Canada Finance Inc. 1.823 07-Dec-2021 2 843 2 829 1 022 HSBC Bank Canada 2.449 29-Jan-2021 1 038 1 036 4 949 HSBC Bank Canada 2.908 29-Sep-2021 5 089 5 098 5 382 National Bank of Canada 1.809 26-Jul-2021 5 373 5 337 2 149 OMERS Realty Corp. 2.971 05-Apr-2021 2 250 2 238 3 405 Rogers Communications Inc. 5.340 22-Mar-2021 3 881 3 838 2 452 Royal Bank of Canada† 2.860 04-Mar-2021 2 554 2 542 6 187 Royal Bank of Canada† 1.583 13-Sep-2021 6 092 6 063 2 149 Shaw Communications Inc. 3.150 19-Feb-2021 2 205 2 193 2 150 Sun Life Financial Inc. 4.570 23-Aug-2021 2 402 2 380 2 508 Sun Life Financial Inc.*, FRN 3.100 19-Feb-2026 2 575 2 572 3 945 Thomson Reuters Corp. 3.309 12-Nov-2021 4 079 4 099 2 149 Toronto Hydro Corp. 3.540 18-Nov-2021 2 338 2 311 2 867 Toyota Credit Canada Inc. 2.200 25-Feb-2021 2 907 2 892 3 586 TransCanada PipeLines Ltd. 3.650 15-Nov-2021 3 841 3 861 2 467 Wells Fargo Canada Corp. 3.040 29-Jan-2021 2 587 2 571



173






2016December 31

2015

ASSETSInvestments at fair value $ 89 357 $ 46 089 Cash 249 119 Due from investment dealers – 15 Subscriptions receivable 1 011 –Dividends receivable, interest accrued and other assets 674 379 TOTAL ASSETS 91 291 46 602 LIABILITIESDue to investment dealers 1 010 –Distributions payable 211 117 Accounts payable and accrued expenses 23 10 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 244 127 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 90 047 $ 46 475


NAV PER UNIT $ 20.24 $ 20.21



INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 2 254 $ 492 Securities lending revenue (see note 7 in the generic notes) 6 – Net realized gain (loss) on investments 100 (7)Change in unrealized gain (loss) on investments (478) 7 TOTAL INCOME (LOSS) 1 882 492 EXPENSES (see notes – ETF Specific Information)Management fees 170 35 Independent Review Committee costs 3 –GST/HST 17 4 TOTAL EXPENSES 190 39 INCREASE (DECREASE) IN NAV $ 1 692 $ 453 INCREASE (DECREASE) IN NAV PER UNIT $ 0.51 $ 0.67

174





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 692 $ 453 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONS Interest for distribution purposes – –Net realized loss (gain) on investments (100) 7Change in unrealized loss (gain) on investments 478 (7)(Increase) decrease in accrued receivables (295) (304)Increase (decrease) in accrued payables 13 8 Cost of investments purchased (81 705) (41 882)Proceeds on sales of investments 39 084 4 761 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (40 833) (36 964)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 44 963 41 464 Cash paid on redemption of redeemable units (2 049) (4 045)Distributions paid to holders of redeemable units (1 951) (362)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 40 963 $ 37 057 Net increase (decrease) in cash for the period 130 93 Cash (bank overdraft), beginning of period 119 26 CASH (BANK OVERDRAFT), END OF PERIOD $ 249 $ 119

Interest received (paid) $ 1 959 $ 188 Dividends received, net of withholding taxes $ – $ –

175






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 46 475 $ 9 060 INCREASE (DECREASE) IN NAV 1 692 453 Early redemption fees – –Proceeds from redeemable units issued 45 974 41 464 Reinvestments of distributions to holders of redeemable units 107 – Redemption of redeemable units (2 049) (4 045)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 44 032 37 419 Distributions from net income (2 042) (393)Distributions from net gains (107) – Distributions from capital (2) (64)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (2 151) (457)NET INCREASE (DECREASE) IN NAV 43 572 37 415 NAV AT END OF PERIOD $ 90 047 $ 46 475

176



December 31, 2016








Bond Index*.


Credit risk (%)



RatingDecember 31

2016December 31

2015

AA 34.2 26.4A 43.0 49.2BBB 22.8 24.4Total 100.0 100.0





2016December 31

2015

Corporate Bonds Financials 66.2 51.8 Communication 11.2 15.1 Energy 7.6 12.7 Infrastructure 6.1 10.5 Real Estate 5.3 4.3 Industrials 2.8 4.8Other Net Assets 0.8 0.8 Total 100.0 100.0





2016December 31

2015

Less than 1 year – –1 – 5 years 100.0 –5 – 10 years – 100.0> 10 years – –Total 100.0 100.0






















value of the ETF.



The ETF had no capital or non-capital losses as at

December 31, 2016.

177



December 31, 2016









Opening units 2 300 450 Issued number of units 2 250 2 050 Reinvested number of units 5 – Units consolidated* (5) –Redeemed number of units (100) (200)Ending number of units 4 450 2 300

* The units of the ETF are consolidated immediately after a distribution is reinvested so that the total number of units outstanding of the ETF after consolidation is the same as before the distribution.



December 31 2016

December 31 2015

Fair value of securities loaned 16 420 28Fair value of collateral received 16 749 29





December 31 2016

December 31 2015

$ % $ %

Gross revenue 9 100 – –RBC IS (paid) (3) (35) – –Tax withheld – – – – ETF revenue 6 65 – –




December 31 2016

December 31 2015


178



December 31, 2016




CANADIAN BONDSCORPORATE 6 172 Bank of Montreal 2.120 16-Mar-2022 $ 6 206 $ 6 173 5 100 Bell Canada Inc. 3.000 03-Oct-2022 5 265 5 241 1 766 Enbridge Inc. 3.190 05-Dec-2022 1 823 1 815 2 019 Greater Toronto Airports Authority 3.040 21-Sep-2022 2 140 2 129 3 086 Hydro One Inc. 3.200 13-Jan-2022 3 291 3 275 2 145 Magna International Inc. 3.100 15-Dec-2022 2 206 2 198 5 103 Manufacturers Life Insurance Co.*, FRN 3.181 22-Nov-2027 5 266 5 250 3 843 National Bank of Canada 2.105 18-Mar-2022 3 857 3 833 2 581 North West Redwater Partnership / NWR Financing Co., Ltd. 2.100 23-Feb-2022 2 580 2 578 3 086 Rogers Communications Inc. 4.000 06-Jun-2022 3 352 3 333 6 175 Royal Bank of Canada† 1.968 02-Mar-2022 6 154 6 118 5 103 TELUS Corp. 2.350 28-Mar-2022 5 095 5 075

47 235 47 018 75.9PROVINCIAL 5 922 Province of Alberta 2.550 15-Dec-2022 6 134 6 115 2 268 Province of British Columbia 2.700 18-Dec-2022 2 385 2 376 5 606 Province of Quebec 3.500 01-Dec-2022 6 121 6 096

14 640 14 587 23.5TOTAL INVESTMENTS $ 61 875 61 605 99.4OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 348 0.6NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 61 953 100.0


179






2016

ASSETSInvestments at fair value $ 61 605 Cash 191 Dividends receivable, interest accrued and other assets 328 TOTAL ASSETS 62 124 LIABILITIESDistributions payable 158 Accounts payable and accrued expenses 13 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 171 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 61 953





INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 137 Change in unrealized gain (loss) on investments (270)TOTAL INCOME (LOSS) (133)EXPENSES (see notes – ETF Specific Information)Management fees 14 GST/HST 2 TOTAL EXPENSES 16 INCREASE (DECREASE) IN NAV $ (149)INCREASE (DECREASE) IN NAV PER UNIT $ (0.22)

180





For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ (149)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments – Change in unrealized loss (gain) on investments 270 (Increase) decrease in accrued receivables (328)Increase (decrease) in accrued payables 13 Cost of investments purchased (61 881)Proceeds on sales of investments 6 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (62 069)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 62 271 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (11)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 62 260 Net increase (decrease) in cash for the period 191 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 191

Interest received (paid) $ (191)Dividends received, net of withholding taxes $ –

181






Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV (149)Early redemption fees – Proceeds from redeemable units issued 62 271 Reinvestments of distributions to holders of redeemable units – Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 62 271 Distributions from net income (122)Distributions from net gains – Distributions from capital (47)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (169)NET INCREASE (DECREASE) IN NAV 61 953 NAV AT END OF PERIOD $ 61 953

182



December 31, 2016








Bond Index*.

The ETF was started in September 2016.


Credit risk (%)



RatingDecember 31

2016

AAA 3.9AA 36.1A 34.9BBB 25.1Total 100.0





2016

Corporate Bonds Financials 34.4 Communication 22.1 Infrastructure 8.7 Energy 7.1 Industrials 3.6Provincial Bonds 23.5Other Net Assets 0.6 Total 100.0





2016

Less than 1 year –1 – 5 years –5 – 10 years 100.0> 10 years –Total 100.0



net assets may have decreased or increased, respectively,

by approximately 5.1%. In practice, actual results could

differ from this sensitivity analysis and the difference could

be material.



December 31, 2016.





and Level 3.






value of the ETF.




December 31, 2016.

183



December 31, 2016









Opening units – Issued number of units 3 150 Reinvested number of units – Redeemed number of units – Ending number of units 3 150



December 31 2016

Fair value of securities loaned 9 973 Fair value of collateral received 10 173




December 31 2016

RBC 1-5 Year Laddered Canadian Bond ETF 28.1RBC 1-5 Year Laddered Corporate Bond ETF 61.3Total 89.4

184



December 31, 2016




CANADIAN BONDSCORPORATE 234 AltaLink LP 3.668 06-Nov-2023 $ 260 $ 255 136 Bell Canada Inc. 3.350 22-Mar-2023 143 142 82 Bell Canada Inc. 4.700 11-Sep-2023 93 91 266 Brookfield Asset Management Inc. 4.540 31-Mar-2023 291 287 211 Enbridge Inc. 3.940 30-Jun-2023 226 224 140 First Capital Realty Inc. 3.900 30-Oct-2023 149 146 110 Loblaw Companies Ltd. 4.860 12-Sep-2023 126 123 234 OMERS Realty Corp. 3.358 05-Jun-2023 252 247 235 TELUS Corp. 3.350 15-Mar-2023 246 243 392 Toronto-Dominion Bank 1.909 18-Jul-2023 385 381 352 TransCanada Pipelines Ltd. 3.690 19-Jul-2023 382 378 235 Wells Fargo Canada Corp. 3.460 24-Jan-2023 254 249

2 807 2 766 70.7PROVINCIAL 362 Province of Manitoba 2.550 02-Jun-2023 379 372 358 Province of New Brunswick 2.850 02-Jun-2023 379 373 343 Province of Quebec 3.000 01-Sep-2023 371 362

1 129 1 107 28.3TOTAL INVESTMENTS $ 3 936 3 873 99.0OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 39 1.0NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 3 912 100.0

185






2016

ASSETSInvestments at fair value $ 3 873 Cash 25 Dividends receivable, interest accrued and other assets 32 TOTAL ASSETS 3 930 LIABILITIESDistributions payable 17 Accounts payable and accrued expenses 1 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 18 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 3 912





INCOME (see note 3 in the generic notes)Interest for distribution purposes $ 31 Net realized gain (loss) on investments (8)Change in unrealized gain (loss) on investments (63)TOTAL INCOME (LOSS) (40)EXPENSES (see notes – ETF Specific Information)Management fees 2 TOTAL EXPENSES 2INCREASE (DECREASE) IN NAV $ (42)INCREASE (DECREASE) IN NAV PER UNIT $ (0.32)

186





For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ (42)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments 8 Change in unrealized loss (gain) on investments 63 (Increase) decrease in accrued receivables (32)Increase (decrease) in accrued payables 1 Cost of investments purchased (4 335)Proceeds on sales of investments 391 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3 946)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 3 985 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (14)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 3 971 Net increase (decrease) in cash for the period 25 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 25

Interest received (paid) $ (1)Dividends received, net of withholding taxes $ –

187






Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV (42)Early redemption fees – Proceeds from redeemable units issued 3 985 Reinvestments of distributions to holders of redeemable units – Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 3 985 Distributions from net income (28)Distributions from net gains – Distributions from capital (3)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (31)NET INCREASE (DECREASE) IN NAV 3 912 NAV AT END OF PERIOD $ 3 912

188



December 31, 2016








Bond Index*.



Credit risk (%)



RatingDecember 31

2016

AA 25.8A 49.1BBB 25.1Total 100.0





2016

Corporate Bonds Financials 16.1 Energy 15.3 Communication 12.2 Industrials 10.5 Real Estate 10.1 Infrastructure 6.4Provincial Bonds 28.4Other Net Assets 1.0 Total 100.0





2016

Less than 1 year –1 – 5 years –5 – 10 years 100.0> 10 years –Total 100.0



net assets may have decreased or increased, respectively,

by approximately 5.7%. In practice, actual results could

differ from this sensitivity analysis and the difference could

be material.



December 31, 2016.





and Level 3.






value of the ETF.






189



December 31, 2016









Opening units – Issued number of units 200 Reinvested number of units – Redeemed number of units – Ending number of units 200



December 31 2016

Fair value of securities loaned 505 Fair value of collateral received 515

190



December 31, 2016



Fair % of Net Shares Security Cost Value Assets

CANADIAN PREFERRED SECURITIESConsumer Discretionary 27 280 Shaw Communications Inc.,

Preferred Series A, 4.500% $ 389 $ 407

389 407 0.3Energy 29 439 AltaGas Ltd.,

Preferred Series A, 3.380% 503 527 57 058 AltaGas Ltd.,

Preferred Series E, 5.000% 1 272 1 348 28 686 AltaGas Ltd.,

Preferred Series I, 5.250% 735 738 22 264 AltaGas Ltd.,

Preferred Series G, 4.750% 478 492 102 260 Enbridge Inc.,

Preferred Series D, 4.000% 1 646 1 755 111 209 Enbridge Inc.,

Preferred Series F, 4.000% 1 835 1 952 96 183 Enbridge Inc.,

Preferred Series H, 4.000% 1 463 1 549 33 515 Enbridge Inc.,

Preferred Series P, 4.000% 559 600 91 330 Enbridge Inc.,

Preferred Series N, 4.000% 1 576 1 695 34 235 Enbridge Inc.,

Preferred Series R, 4.000% 572 617 119 237 Enbridge Inc.,

Preferred Series B, 4.000% 1 901 2 059 51 521 Enbridge Inc.,

Preferred Series 3, 4.000% 845 891 16 149 Enbridge Inc.,


Preferred Series 11, 4.400% 987 1 032 38 522 Enbridge Inc.,


Preferred Series L, 4.000% 467 473 27 208 Enbridge Inc.,

Preferred Series J, 4.000% 788 808 21 874 Husky Energy Inc.,

Preferred Series 7, 4.600% 479 502 31 513 Husky Energy Inc.,



Preferred Series 1, 4.450% 360 387 28 686 Pembina Pipeline Corp.,


Preferred Series 9, 4.750% 768 801


Energy (cont.) 27 280 Pembina Pipeline Corp.,

Preferred Series 5, 5.000% $ 567 $ 596 16 723 Pembina Pipeline Corp.,


Preferred Series 1, 4.250% 1 440 1 516 27 021 Pembina Pipeline Corp.,


Preferred Series 11, 5.750% 479 485 49 071 TransCanada Corp.,


Preferred Series 7, 4.000% 1 635 1 688 49 332 TransCanada Corp.,





Preferred Series 1, 4.600% 406 422 38 912 Veresen Inc.,

Preferred Series C, 5.000% 739 817 68 154 Veresen Inc.,

Preferred Series A, 4.400% 1 103 1 220 36 797 Veresen Inc.,

Preferred Series E, 5.000% 834 851

33 147 34 898 23.7Financials 37 742 Bank of Montreal,

Preferred Series 16, 5.200% 913 935 17 595 Bank of Montreal,

Preferred Series 25, 1.805% 355 367 71 965 Bank of Montreal,

Preferred Series 29, 3.900% 1 369 1 403 70 764 Bank of Montreal,




Preferred Series 33, 3.800% 1 236 1 292 51 898 Bank of Nova Scotia,



Preferred Series 34, 5.500% 1 010 1 022

191


December 31, 2016




Financials (cont.) 46 497 Bank of Nova Scotia,

Preferred Series 38, 4.850% $ 1 199 $ 1 197 41 640 Bank of Nova Scotia,

Preferred Series 20, 5.000% 1 010 1 022 30 733 Brookfield Asset Management Inc.,

Preferred Series 38, 4.400% 607 635 27 215 Brookfield Asset Management Inc.,


Preferred Series 42, 4.500% 1 218 1 278 26 128 Brookfield Asset Management Inc.,



Preferred Series 28-A, 4.600% 714 742 44 684 Brookfield Asset Management Inc.,




Preferred Series 32, 4.500% 780 831 59 251 Canadian Imperial Bank of Commerce,

Preferred Series 39, 3.900% 1 146 1 157 45 594 Canadian Imperial Bank of Commerce,

Preferred Series 41, 3.750% 860 890 43 538 Canadian Imperial Bank of Commerce,

Preferred Series 43, 3.600% 915 951 22 507 Canadian Western Bank,

Preferred Series 7, 6.250% 599 606 25 467 Canadian Western Bank,

Preferred Series 5, 4.400% 480 485 18 388 Element Fleet Management Corp.,

Preferred Series G, 6.500% 465 467 18 388 Element Fleet Management Corp.,

Preferred Series C, 6.500% 460 459 11 333 Empire Life Insurance,

Preferred Series 1, 5.750% 298 298 18 300 Fairfax Financial Holdings Ltd.,

Preferred Series C, 4.578% 364 372 33 372 Fairfax Financial Holdings Ltd.,

Preferred Series M, 4.750% 760 784 26 630 Fairfax Financial Holdings Ltd.,

Preferred Series G, 3.318% 434 439 37 741 Fairfax Financial Holdings Ltd.,

Preferred Series I, 3.708% 671 695 82 954 Fairfax Financial Holdings Ltd.,

Preferred Series K, 5.000% 1 731 1 817 23 140 Great-West Lifeco Inc.,

Preferred Series N, 3.650% 323 331 70 171 Industrial Alliance Insurance &

Financial Services Inc., Preferred 1 441 1 567 28 502 Intact Financial Corp.,



Financials (cont.) 112 287 Intact Financial Corp.,

Preferred Series 1, 4.200% $ 1 814 $ 1 941 16 133 Laurentian Bank of Canada, Class A,

Preferred Series 11, 4.000% 395 402 13 396 Laurentian Bank of Canada, Class A,

Preferred Series 15, 5.850% 352 352 36 701 Laurentian Bank of Canada, Class A,

Preferred Series 13, 4.300% 701 728 14 258 Manulife Financial Corporation,


Preferred Series 11, 4.000% 1 392 1 505 78 078 Manulife Financial Corporation,








Preferred Series 1-7, 4.600% 1 729 1 847 37 091 Manulife Financial Corporation,

Preferred Series 19, 3.800% 708 746 123 089 National Bank of Canada,

Preferred Series 30, 4.100% 2 362 2 407 66 044 National Bank of Canada,



Preferred Series 36, 5.400% 1 308 1 312 21 743 Power Financial Corp.,

Preferred Series T, 4.200% 435 456 24 385 Power Financial Corp.,

Preferred Series P, 2.306% 334 351 43 669 Royal Bank of Canada,

Preferred Series BF, 3.600%* 894 939 88 320 Royal Bank of Canada,

Preferred Series BD, 3.600%* 1 830 1 902 63 089 Royal Bank of Canada,

Preferred Series BB, 3.900%* 1 203 1 240 118 325 Royal Bank of Canada,

Preferred Series AZ, 4.000%* 2 258 2 317 87 318 Royal Bank of Canada,

Preferred Series BK, 5.500%* 2 325 2 351 80 593 Royal Bank of Canada,

Preferred Series BM, 5.500%* 2 151 2 190 57 318 Sun Life Financial Inc.,

Preferred Series 12R, 4.250% 1 151 1 251 21 354 Sun Life Financial Inc.,

Preferred Series 10R, 2.842% 363 376

192


December 31, 2016




Financials (cont.) 18 652 Sun Life Financial Inc.,

Preferred Series 8R, 4.350% $ 273 $ 290 35 369 Toronto-Dominion Bank,

Preferred Series Y, 5.100% 864 879 91 812 Toronto-Dominion Bank,

Preferred Series 14, 4.850% 2 353 2 369 66 165 Toronto-Dominion Bank,





Preferred Series S, 5.000% 738 753 82 473 Toronto-Dominion Bank,



78 515 81 242 55.1Real Estate 33 737 Brookfield Office Properties Inc.,

Preferred Series AA, 4.750% 657 702 18 137 Brookfield Office Properties Inc.,

Preferred Series CC, 6.000% 478 478 56 797 Brookfield Office Properties Inc.,

Preferred Series T, 4.600% 1 076 1 158 30 473 Brookfield Office Properties Inc.,

Preferred Series N, 3.782% 536 564 56 876 Brookfield Office Properties Inc.,

Preferred Series P, 5.150% 1 010 1 081 13 449 Brookfield Office Properties Inc.,

Preferred Series R, 4.155% 259 280 21 607 RioCan Real Estate Investment Trust,

Preferred Series C, 4.700% 527 537

4 543 4 800 3.3Telecommunication Services 85 045 BCE Inc.,

Preferred Series AQ, 4.250% 1 750 1 806 128 827 BCE Inc.,

Preferred Series AK, 4.150% 1 900 1 965 26 110 BCE Inc.,

Preferred Series AM, 2.764% 400 410 36 701 BCE Inc.,

Preferred Series AO, 4.550% 781 811

4 831 4 992 3.4Utilities 12 882 Algonquin Power & Utilities Corp.,

Preferred Series D, 5.000% 276 293 29 718 Algonquin Power & Utilities Corp.,

Preferred Series A, 4.500% 565 596 26 240 Brookfield Infrastructure

Partners LP, Preferred Series 5, 5.350% 670 682


Utilities (cont.) 17 877 Brookfield Infrastructure

Partners LP, Preferred Series 3, 5.500% $ 459 $ 463

21 484 Brookfield Renewable Partners LP, Preferred Series 9, 5.750% 550 559

19 930 Brookfield Renewable Partners LP, Preferred Series 7, 5.500% 507 512

41 770 Brookfield Renewable Power Preferred Equity Inc., Preferred, 4.400% 775 810

36 701 Canadian Utilities Ltd., Preferred Series FF, 4.500% 970 995

101 749 Canadian Utilities Ltd., Preferred Series Y, 4.000% 1 978 2 123

20 996 Capital Power Corp., Preferred Series 3, 4.600% 362 396

91 433 Emera Inc., Preferred Series C, 4.100% 1 873 1 981

34 257 Emera Inc., Preferred Series F, 4.250% 700 734

88 844 Fortis Inc., Preferred Series G, 5.250% 1 597 1 660

81 702 Fortis Inc., Preferred Series M, 4.100% 1 607 1 672

51 149 Fortis Inc., Preferred Series K, 4.000% 905 928

14 171 Fortis Inc., Preferred Series H, 4.900% 195 201

5 930 Northland Power Inc., Preferred Series 1, 3.510% 100 105

37 741 Northland Power Inc., Preferred Series 3, 5.000% 778 849

8 508 TransAlta Corp., Preferred Series G, 5.300% 146 166

57 189 TransAlta Corp., Preferred Series E, 5.000% 894 1 077

86 426 TransAlta Corp., Preferred Series C, 4.600% 1 274 1 444

39 107 TransAlta Corp., Preferred Series A, 2.709% 434 473

37 497 Westcoast Energy Inc., Preferred Series 12, 5.200% 971 967

13 136 Westcoast Energy Inc., Preferred Series 10, 5.250% 338 337

18 924 20 023 13.6 TOTAL CANADIAN PREFERRED SECURITIES 140 349 146 362 99.3 Less: Transaction costs (6) – – TOTAL INVESTMENTS $ 140 343 146 362 99.3 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 996 0.7 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 147 358 100.0


193






2016

ASSETSInvestments at fair value $ 146 362 Cash 977 Due from investment dealers 133 Subscriptions receivable 7 610 Dividends receivable, interest accrued and other assets 397 TOTAL ASSETS 155 479 LIABILITIESDue to investment dealers 7 545 Distributions payable 513 Accounts payable and accrued expenses 63 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 8 121 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 147 358





INCOME (see note 3 in the generic notes)Dividends $ 944 Net realized gain (loss) on investments 170 Net gain (loss) on foreign currencies and other net assets (3)Change in unrealized gain (loss) on investments 6 019 TOTAL INCOME (LOSS) 7 130 EXPENSES (see notes – ETF Specific Information)Management fees 94 GST/HST 11 Transaction costs 14 TOTAL EXPENSES 119 INCREASE (DECREASE) IN NAV $ 7 011 INCREASE (DECREASE) IN NAV PER UNIT $ 3.32

194





For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 7 011 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments (170)Change in unrealized loss (gain) on investments (6 019)(Increase) decrease in accrued receivables (397)Increase (decrease) in accrued payables 63 Cost of investments purchased (148 367)Proceeds on sales of investments 15 606 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (132 273)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 143 974 Cash paid on redemption of redeemable units (10 380)Distributions paid to holders of redeemable units (344)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 133 250 Net increase (decrease) in cash for the period 977 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 977

Interest received (paid) $ – Dividends received, net of withholding taxes $ 547

195






Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 7 011 Early redemption fees – Proceeds from redeemable units issued 151 584 Reinvestments of distributions to holders of redeemable units 61 Redemption of redeemable units (10 380)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 141 265 Distributions from net income (357)Distributions from net gains (226)Distributions from capital (335) TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (918)NET INCREASE (DECREASE) IN NAV 147 358 NAV AT END OF PERIOD $ 147 358

196



December 31, 2016




with exposure to the performance of a diversified portfolio of

primarily Canadian preferred share securities that will provide

regular income and that have the potential for long-term

capital growth.







2016

Canadian Equities Financials 55.1 Energy 23.7 Utilities 13.6 Telecommunication Services 3.4 Real Estate 3.3 Consumer Discretionary 0.3 Other Net Assets 0.6 Total 100.0

Other price risk (% impact on net assets)

Due to the fact that the ETF has been in existence for

less than six months, the impact on net assets of the ETF

using the historical correlation between the ETF’s return

and a broad-based index is not disclosed because there

is insufficient data and any resulting calculation could be

materially misleading.



December 31, 2016.


Preferred shares 146 362 – – 146 362 Total financial instruments 146 362 – – 146 362 % of total portfolio 100.0 – – 100.0



and Level 3.



the ETF as compensation for its services. The management fee

of the ETF is calculated at 0.53% annually, before GST/HST, of




December 31, 2016.








Opening units – Issued number of units 7 264 Reinvested number of units 3 Units consolidated* (3)Redeemed number of units (500)Ending number of units 6 764





December 31 2016

$ %






December 31 2016

Fair value of securities loaned 2 213 Fair value of collateral received 2 257

197



December 31, 2016



Fair % of Net Holdings Security Cost Value Assets

CANADIAN EQUITIESConsumer Discretionary 58 670 Cineplex Inc. $ 2 931 $ 3 005

2 931 3 005 2.7Consumer Staples 19 918 The North West Co. Inc. 511 548

511 548 0.5Energy 43 622 ARC Resources Ltd. 939 1 008 72 555 Birchcliff Energy Ltd. 631 680 17 440 Bonterra Energy Corp. 643 507 80 642 Cameco Corp. 981 1 132 42 426 Canadian Natural Resources Ltd. 1 307 1 815 46 092 Enbridge Income Fund

Holdings Inc. 1 389 1 603 34 419 Enerflex Ltd. 400 587 60 740 Ensign Energy Services Inc. 450 570 42 785 Freehold Royalties Ltd. 709 606 79 605 Inter Pipeline Ltd. 2 253 2 359 51 569 Keyera Corp. 2 051 2 086 51 389 Parkland Fuel Corp. 1 147 1 446 32 637 Pason Systems Inc. 580 641 66 587 Pembina Pipeline Corp. 2 571 2 793 26 065 Peyto Exploration &

Development Corp. 877 866 31 050 PrairieSky Royalty Ltd. 848 992 153 653 Surge Energy Inc. 435 509 63 907 TORC Oil & Gas Ltd. 404 529 132 247 Veresen Inc. 1 625 1 734 70 724 Whitecap Resources Inc. 763 860

21 003 23 323 21.3Financials 41 405 Canadian Imperial Bank

of Commerce 3 984 4 536 93 189 CI Financial Corp. 2 897 2 690 43 570 Genworth MI Canada Inc. 1 404 1 467 76 416 Great-West Lifeco Inc. 2 592 2 688 53 227 Home Capital Group Inc. 1 635 1 668 49 008 IGM Financial Inc. 2 035 1 872 40 044 Industrial Alliance Insurance &

Financial Services Inc. 1 713 2 138 30 607 Intact Financial Corp. 2 598 2 941 75 763 Power Financial Corp. 2 527 2 543 72 563 Royal Bank of Canada* 5 587 6 594

26 972 29 137 26.6Health Care 15 318 Extendicare Inc. 140 151

140 151 0.1


Industrials 34 065 Morneau Shepell Inc. $ 653 $ 654 26 788 Russel Metals Inc. 646 685 38 293 Transcontinental Inc., Class A 704 850 26 779 Westshore Terminals

Investment Corp. 628 693

2 630 2 882 2.6Information Technology 28 073 Computer Modelling Group Ltd. 297 256

297 256 0.2Materials 11 785 Agrium Inc. 1 504 1 591 49 634 Dominion Diamond Corp. 821 646 27 058 Intertape Polymer Group Inc. 478 681 36 519 Labrador Iron Ore Royalty Corp. 551 680 156 900 Nevsun Resources Ltd. 653 651 289 460 Western Forest Products Inc. 617 547

4 624 4 796 4.4Real Estate 53 001 Allied Properties Real Estate

Investment Trust 1 760 1 905 80 457 Brookfield Property Partners LP 2 149 2 360 65 525 Canadian Apartment Properties

Real Estate Investment Trust 1 795 2 056 41 292 Canadian Real Estate

Investment Trust 1 853 1 912 16 456 Chartwell Retirement Residences

Real Estate Investment Trust 251 241 117 537 Cominar Real Estate

Investment Trust 1 906 1 730 97 761 Crombie Real Estate

Investment Trust 1 251 1 328 80 995 First Capital Realty Inc. 1 611 1 674 32 595 Granite Real Estate

Investment Trust 1 324 1 461 105 915 H&R Real Estate Investment Trust 2 186 2 369 73 359 Milestone Apartments Real Estate

Investment Trust 1 345 1 394 97 135 RioCan Real Estate Investment Trust 2 749 2 587 62 683 Smart Real Estate Investment Trust 1 941 2 024

22 121 23 041 21.1Telecommunication Services 78 487 BCE Inc. 4 479 4 554 62 949 Rogers Communications Inc.,

Class B 3 063 3 260 86 027 TELUS Corp. 3 544 3 678

11 086 11 492 10.5

198


December 31, 2016



Utilities 35 094 Atco Ltd., Class I, Non-Voting $ 1 526 $ 1 567 43 941 Brookfield Renewable

Partners LP 1 552 1 751 45 718 Canadian Utilities Ltd., Class A 1 713 1 655 69 511 Hydro One Ltd. 1 772 1 639 127 299 Just Energy Group Inc. 932 934 104 220 Superior Plus Corp. 1 218 1 329 83 050 TransAlta Renewables Inc. 1 091 1 191

9 804 10 066 9.2TOTAL CANADIAN EQUITIES 102 119 108 697 99.2Less: Transaction costs (34) – –TOTAL INVESTMENTS $ 102 085 108 697 99.2OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 689 0.8NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 109 386 100.0



199






2016December 31

2015

ASSETSInvestments at fair value $ 108 697 $ 60 791 Cash 528 329 Due from investment dealers – 12 Subscriptions receivable 1 031 – Dividends receivable, interest accrued and other assets 492 285 TOTAL ASSETS 110 748 61 417 LIABILITIESDue to investment dealers 1 025 – Distributions payable 294 197 Accounts payable and accrued expenses 43 25 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 362 222 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 109 386 $ 61 195


NAV PER UNIT $ 20.64 $ 17.74



INCOME (see note 3 in the generic notes)Dividends $ 3 401 $ 2 458 Other income (loss) 298 148 Securities lending revenue (see note 7 in the generic notes) 83 19 Net realized gain (loss) on investments (13) (3 604)Net gain (loss) on foreign currencies and other net assets (3) (1)Change in unrealized gain (loss) on investments 14 055 (5 214)TOTAL INCOME (LOSS) 17 821 (6 194)EXPENSES (see notes – ETF Specific Information)Management fees 342 235 Independent Review Committee costs 4 3 GST/HST 31 23 Transaction costs 55 56 TOTAL EXPENSES 432 317 INCREASE (DECREASE) IN NAV $ 17 389 $ (6 511)INCREASE (DECREASE) IN NAV PER UNIT $ 3.79 $ (2.11)

200





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 17 389 $ (6 511)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 13 3 604 Change in unrealized loss (gain) on investments (14 055) 5 214 (Increase) decrease in accrued receivables (207) (126)Increase (decrease) in accrued payables 18 7 Cost of investments purchased (80 196) (64 030)Proceeds on sales of investments 47 369 40 156NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (29 669) (21 686)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 36 147 24 099 Cash paid on redemption of redeemable units (2 910) – Distributions paid to holders of redeemable units (3 369) (2 325)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 29 868 $ 21 774 Net increase (decrease) in cash for the period 199 88 Cash (bank overdraft), beginning of period 329 241 CASH (BANK OVERDRAFT), END OF PERIOD $ 528 $ 329

Interest received (paid) $ – $ – Dividends received, net of withholding taxes $ 3 194 $ 2 332

201






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 61 195 $ 47 010 INCREASE (DECREASE) IN NAV 17 389 (6 511)Early redemption fees – –Proceeds from redeemable units issued 37 178 23 076 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (2 910) – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 34 268 23 076 Distributions from net income (3 079) (2 092)Distributions from net gains – – Distributions from capital (387) (288)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (3 466) (2 380)NET INCREASE (DECREASE) IN NAV 48 191 14 185 NAV AT END OF PERIOD $ 109 386 $ 61 195

202



December 31, 2016





high-quality Canadian dividend-paying equity securities that

will provide regular income and have the potential for long-

term capital growth.






2016December 31

2015

Canadian Equities Financials 26.6 53.7 Energy 21.3 19.7 Real Estate 20.8 – Telecommunication Services 10.5 8.3 Utilities 9.2 5.2 Materials 4.4 5.8 Consumer Discretionary 2.7 4.2 Industrials 2.6 1.8 Consumer Staples 0.5 0.3 Health Care 0.4 0.3 Information Technology 0.2 0.3 Other Net Assets 0.8 0.4 Total 100.0 100.0


The table below shows the impact of a 1% change in the

broad-based index (noted below) on the ETF’s net assets,

using a 35-month (December 31, 2015 – 23-month)

historical correlation of data of the ETF’s return and the

index, with all other factors kept constant, as at:

December 31 2016

December 31 2015

S&P/TSX Capped Composite Total Return Index + or - 1.0 + or - 0.9

Since historical correlation may not be representative of future

correlation, actual results could differ from this sensitivity

analysis and the difference could be material.





Equities 108 697 – – 108 697 Total financial instruments 108 697 – – 108 697 % of total portfolio 100.0 – – 100.0






















Opening units 3 450 2 300 Issued number of units 2 000 1 150 Reinvested number of units – – Redeemed number of units (150) – Ending number of units 5 300 3 450

203



December 31, 2016




December 31 2016

December 31 2015

$ % $ %

Total transaction costs 55 100 56 100Related-party brokerage commissions* 5 9 4 7Commission arrangements† 3 5 – –





December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %

Gross revenue 141 100 31 100RBC IS (paid) (49) (35) (11) (35)Tax withheld (9) (6) (1) (5)ETF revenue 83 59 19 60




December 31 2016

December 31 2015

RBC Strategic Global Dividend Leaders ETF 1.1 –


204



December 31, 2016




CANADIAN EQUITIESConsumer Discretionary 957 BRP Inc. $ 23 $ 27 557 Canadian Tire Corp., Ltd. 72 78 889 Cineplex Inc. 44 46 662 Dorel Industries Inc. 23 26 1 179 Great Canadian Gaming Corp. 25 29 2 097 Magna International Inc. 120 122 1 844 Thomson Reuters Corp. 97 108 937 Uni-Select Inc. 28 28

432 464 5.1Consumer Staples 2 400 Alimentation Couche-Tard Inc. 153 146 1 837 Jean Coutu Group PJC Inc. 38 38 1 699 Loblaw Cos., Ltd. 114 120 1 634 Maple Leaf Foods Inc. 47 46

352 350 3.9Energy 3 853 Advantage Oil & Gas Ltd. 30 35 6 260 Bonavista Energy Corp. 25 30 843 Bonterra Energy Corp. 22 25 4 533 Canadian Natural Resources Ltd. 165 194 6 465 Cenovus Energy Inc. 125 131 5 116 Crescent Point Energy Corp. 99 93 4 087 Crew Energy Inc. 20 31 7 141 Encana Corp. 91 113 4 625 Enerplus Corp. 37 59 1 353 Ensign Energy Services Inc. 11 13 2 329 Freehold Royalties Ltd. 27 33 2 853 Gibson Energy Inc. 46 54 4 473 Husky Energy Inc. 64 73 3 407 Inter Pipeline Ltd. 92 101 795 Mullen Group Ltd. 13 16 3 075 Pembina Pipeline Corp. 117 129 2 394 Precision Drilling Corp. 14 18 484 ShawCor Ltd. 15 17 6 332 Suncor Energy Inc. 229 277 8 593 Surge Energy Inc. 20 28 3 578 TORC Oil & Gas Ltd. 29 30 4 829 Veresen Inc. 60 63

1 351 1 563 17.2Financials 5 044 Bank of Montreal 404 487 7 588 Bank of Nova Scotia 490 567 3 591 Brookfield Asset Management Inc. 157 159 3 625 Canadian Imperial Bank of Commerce 355 397 2 652 CI Financial Corp. 74 77 3 968 Great-West Lifeco Inc. 129 140 1 205 IGM Financial Inc. 46 46 1 916 Industrial Alliance Insurance &

Financial Services Inc. 89 102


Financials (cont.) 3 830 Power Financial Corp. $ 127 $ 129 7 657 Royal Bank of Canada* 664 696 4 877 Sun Life Financial Inc. 213 251

2 748 3 051 33.6Health Care 1 790 Extendicare Inc. 16 18 1 381 Valeant Pharmaceuticals

International Inc. 175 27

192 45 0.5Industrials 1 701 Aecon Group Inc. 27 26 948 Badger Daylighting Ltd. 24 30 358 Boyd Group Income Fund 31 31 3 144 CAE Inc. 52 59 2 522 Canadian National Railway Co. 203 228 732 Canadian Pacific Railway Ltd. 132 140 2 159 Finning International Inc. 49 57 1 411 Morneau Shepell Inc. 27 27 1 222 Ritchie Bros Auctioneers Inc. 47 56 961 Russel Metals Inc. 19 25 1 401 TFI International Inc. 37 49 1 191 Toromont Industries Ltd. 46 50 1 603 Transcontinental Inc. 30 36 1 215 Westshore Terminals

Investment Corp. 25 31

749 845 9.3Information Technology 4 851 BlackBerry Ltd. 50 44 1 375 Celestica Inc. 80 88 1 878 CGI Group Inc. 31 30 2 031 Computer Modelling Group Ltd. 17 19 1 105 Descartes Systems Group Inc. 32 32 839 Sierra Wireless Inc. 18 18

228 231 2.5Materials 1 132 Agnico Eagle Mines Ltd. 80 64 1 167 Agrium Inc. 139 157 6 383 Alacer Gold Corp. 17 14 3 180 Alamos Gold Inc. 36 29 9 787 B2Gold Corp. 29 31 4 355 Barrick Gold Corp. 77 94 2 234 Chemtrade Logistics Income Fund 40 42 1 706 Detour Gold Corp. 33 31 1 022 Endeavour Mining Corp. 21 21 9 623 FBR 38 40 4 221 First Quantum Minerals Ltd. 52 56 3 957 Goldcorp Inc. 79 72 5 497 IAMGOLD Corp. 19 29 920 Interfor Corp. 14 14 639 Intertape Polymer Group Inc. 13 16 2 801 Klondex Mines Ltd. 17 18

205


December 31, 2016




Materials (cont.) 5 430 Lucara Diamond Corp. $ 22 $ 17 6 283 Lundin Mining Corp. 36 40 6 251 New Gold Inc. 29 29 512 Norbord Inc. 16 17 1 597 Pan American Silver Corp. 25 32 5 192 SEMAFO Inc. 28 23 2 423 Teck Resources Ltd. 44 65 1 171 Torex Gold Resources Inc. 22 24 502 West Fraser Timber Co., Ltd. 21 24 5 746 Western Forest Products Inc. 12 11 8 737 Yamana Gold Inc. 51 33

1 010 1 045 11.5Real Estate 842 Allied Properties Real Estate

Investment Trust 29 30 725 Altus Group Ltd. 22 22 1 468 Brookfield Property Partners LP 44 43 1 116 Canadian Apartment Properties REIT 33 35 668 Canadian Real Estate

Investment Trust 29 31 619 Colliers International Group Inc. 34 31 1 647 Cominar Real Estate

Investment Trust 24 24 560 Granite Real Estate

Investment Trust 22 25 1 907 H&R Real Estate Investment Trust 41 43

279 284 3.1Telecommunication Services 3 840 BCE Inc. 221 223 2 625 Rogers Communications Inc. 136 136 3 718 TELUS Corp. 160 159

517 518 5.7Utilities 4 829 Algonquin Power & Utilities Corp. 52 55 1 251 Atco Ltd. 53 56 1 665 Brookfield Renewable Partners LP 62 66 1 743 Canadian Utilities Ltd. 64 63 1 976 Capital Power Corp. 39 46 3 000 Fortis Inc. 121 124 2 581 Hydro One Ltd. 65 61 2 612 Innergex Renewable Energy Inc. 34 37 3 346 Superior Plus Corp. 39 43 7 032 TransAlta Corp. 41 52 2 636 TransAlta Renewables Inc 38 38

608 641 7.1 TOTAL CANADIAN EQUITIES 8 465 9 037 99.5 Less: Transaction costs (1) – – TOTAL INVESTMENTS $ 8 464 9 037 99.5 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 41 0.5 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 9 078 100.0


206






2016December 31

2015

ASSETSInvestments at fair value $ 9 037 $ 3 333 Cash 54 19 Due from investment dealers – 6 Dividends receivable, interest accrued and other assets 30 13 TOTAL ASSETS 9 121 3 371 LIABILITIESDistributions payable 39 17 Accounts payable and accrued expenses 4 1 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 43 18 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 9 078 $ 3 353


NAV PER UNIT $ 20.17 $ 16.76



INCOME (see note 3 in the generic notes)Dividends $ 191 $ 73 Other income (loss) 3 1 Securities lending revenue (see note 7 in the generic notes) 1 –Net realized gain (loss) on investments 61 (123)Change in unrealized gain (loss) on investments 1 077 (504)TOTAL INCOME (LOSS) 1 333 (553)EXPENSES (see notes – ETF Specific Information)Management fees 24 9 GST/HST 3 1 Transaction costs 4 1 TOTAL EXPENSES 31 11 INCREASE (DECREASE) IN NAV $ 1 302 $ (564)INCREASE (DECREASE) IN NAV PER UNIT $ 4.04 $ (3.21)

207





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 302 $ (564)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (61) 123 Change in unrealized loss (gain) on investments (1 077) 504 (Increase) decrease in accrued receivables 13 (13)Increase (decrease) in accrued payables 3 1 Cost of investments purchased (10 413) (5 316)Proceeds on sales of investments 5 853 1 350 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (4 380) (3 915)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 5 459 3 961 Cash paid on redemption of redeemable units (925) – Distributions paid to holders of redeemable units (119) (27)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 4 415 $ 3 934 Net increase (decrease) in cash for the period 35 19 Cash (bank overdraft), beginning of period 19 – CASH (BANK OVERDRAFT), END OF PERIOD $ 54 $ 19

Interest received (paid) $ – $ – Dividends received, net of withholding taxes $ 204 $ 60

208






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 3 353 $ – INCREASE (DECREASE) IN NAV 1 302 (564)Early redemption fees – –Proceeds from redeemable units issued 5 489 3 961 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (925) – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 4 564 3 961 Distributions from net income (141) (44)Distributions from net gains – – Distributions from capital – – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (141) (44)NET INCREASE (DECREASE) IN NAV 5 725 3 353 NAV AT END OF PERIOD $ 9 078 $ 3 353

209



December 31, 2016




with broad exposure to the performance of a diversified

portfolio of high-quality Canadian equity securities that have

the potential for long-term capital growth.

The ETF was started in May 2015.






2016December 31

2015

Canadian Equities Financials 34.8 37.7 Energy 17.2 14.6 Materials 11.5 9.5 Industrials 9.3 8.5 Utilities 7.1 5.8 Telecommunication Services 5.7 6.4 Consumer Discretionary 3.9 6.1 Consumer Staples 3.9 4.4 Real Estate 3.1 – Information Technology 2.5 3.2 Health Care 0.5 3.2 Other Net Assets 0.5 0.6 Total 100.0 100.0




using a 19-month (December 31, 2015 – 7-month) historical

correlation of data of the ETF’s return and the index, with all

other factors kept constant, as at:

December 31 2016

December 31 2015

S&P/TSX Capped Composite Total Return Index + or - 1.1 + or - 1.0






























Opening units 200 – Issued number of units 300 200 Reinvested number of units – – Redeemed number of units (50) – Ending number of units 450 200

210



December 31, 2016





December 31 2016

December 31 2015

$ % $ %

Total transaction costs 4 100 1 100Related-party brokerage commissions* – – – –Commission arrangements† – – – –





December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %

Gross revenue 2 100 – –RBC IS (paid) (1) (35) – –Tax withheld – – – –ETF revenue 1 65 – –




December 31 2016

December 31 2015

RBC Strategic Global Equity Leaders ETF 8.2 –

211



December 31, 2016




UNITED STATES EQUITIESConsumer Discretionary 14 600 Buckle Inc. $ 550 $ 446 10 824 Cato Corp. 479 437 22 986 Coach Inc. 1 157 1 080 13 678 Garmin Ltd. 767 889 42 968 General Motors Co. 1 926 2 008 10 039 Genuine Parts Co. 1 209 1 286 30 120 H&R Block Inc. 814 929 9 852 Hasbro Inc. 1 022 1 028 18 497 HSN Inc. 1 055 851 9 752 John Wiley & Sons Inc. 610 713 14 541 L Brands Inc. 1 534 1 284 15 121 Leggett & Platt Inc. 965 991 25 505 McDonald’s Corp. 3 336 4 163 18 889 Nutrisystem Inc. 534 878 29 172 Stein Mart Inc. 358 214 7 537 Sturm Ruger & Co Inc. 602 533 13 080 Superior Industries International Inc. 377 462 29 561 TEGNA Inc. 908 848 9 709 Tupperware Brands Corp. 757 685 18 663 VF Corp. 1 435 1 335 11 017 Wyndham Worldwide Corp. 997 1 128 29 793 Yum! Brands Inc. 2 107 2 530

23 499 24 718 6.7Consumer Staples 51 624 Altria Group Inc. 3 443 4 681 14 024 Clorox Co. 2 026 2 257 85 778 Coca-Cola Co. 4 546 4 769 38 119 Colgate-Palmolive Co. 3 394 3 345 15 790 Hershey Co. 1 859 2 190 23 504 Kellogg Co. 2 339 2 323 19 779 Kimberly-Clark Corp. 2 832 3 027 12 505 Medifast Inc. 679 698 33 763 PepsiCo Inc. 4 180 4 738 38 150 Philip Morris International Inc. 4 149 4 681 36 842 Sysco Corp. 2 294 2 736 43 483 Wal-Mart Stores Inc. 3 951 4 031

35 692 39 476 10.7Energy 54 030 Archrock Inc. 990 956 61 723 ConocoPhillips 4 468 4 150 59 521 Exxon Mobil Corp. 6 473 7 204 47 112 Marathon Petroleum Corp. 2 242 3 181 38 406 Oceaneering International Inc. 1 829 1 453 13 204 ONEOK Inc. 730 1 017 28 894 Phillips 66 3 148 3 348 43 379 Schlumberger Ltd. 4 463 4 884 18 219 Tesoro Corp. 1 827 2 137 34 936 Valero Energy Corp. 2 662 3 201

28 832 31 531 8.5


Financials 8 079 American Financial Group Inc. $ 778 $ 955 8 322 Ameriprise Financial Inc. 1 058 1 238 6 008 AMERISAFE Inc. 464 502 14 695 Arthur J Gallagher & Co. 869 1 024 22 627 Associated Banc-Corp. 542 750 26 469 Bank Mutual Corp. 303 335 6 086 Bank of Hawaii Corp. 480 724 3 470 BlackRock Inc. 1 573 1 771 14 119 Cathay General Bancorp. 561 720 10 583 CME Group Inc. 1 406 1 637 16 044 Dime Community Bancshares Inc. 362 432 16 007 First Financial Bancorp. 431 611 28 681 Fulton Financial Corp. 503 723 14 298 Glacier Bancorp Inc. 494 695 11 670 Hanmi Financial Corp. 349 546 6 558 Hanover Insurance Group Inc. 683 800 25 226 Hope Bancorp Inc. 562 741 10 817 Horace Mann Educators Corp. 451 621 70 690 Huntington Bancshares Inc. 1 166 1 253 26 591 Invesco Ltd. 1 207 1 082 30 336 JPMorgan Chase & Co. 2 773 3 510 13 344 Lincoln National Corp. 719 1 186 35 412 Morgan Stanley 1 479 2 006 10 055 NBT Bancorp Inc. 422 565 18 161 Oritani Financial Corp. 393 457 12 537 PNC Financial Services Group Inc. 1 459 1 966 15 594 Principal Financial Group Inc. 1 043 1 210 29 397 Progressive Corp. 1 293 1 400 15 563 Provident Financial Services Inc. 371 591 7 669 RLI Corp. 652 649 11 171 S&T Bancorp Inc. 410 585 5 141 Safety Insurance Group Inc. 453 508 20 794 SunTrust Banks Inc. 1 212 1 530 12 993 T. Rowe Price Group Inc. 1 278 1 311 4 171 Tompkins Financial Corp. 296 529 10 256 Travelers Cos Inc. 1 510 1 684 38 509 Trustco Bank Corp. NY 338 452 18 487 Unum Group 773 1 089 31 907 US Bancorp. 1 839 2 198 12 215 Webster Financial Corp. 605 889 42 862 Wells Fargo & Co. 3 096 3 168

36 656 44 643 12.1Health Care 48 759 Abbvie Inc. 3 631 4 095 21 027 Amgen Inc. 4 266 4 123 52 186 Bristol-Myers Squibb Co. 3 950 4 090 25 764 Cardinal Health Inc. 2 472 2 487 35 503 Eli Lilly & Co. 3 577 3 502 39 180 Gilead Sciences Inc. 4 044 3 763 38 099 Johnson & Johnson 5 037 5 885 10 680 Landauer Inc. 569 689

212


December 31, 2016




Health Care (cont.) 57 486 Merck & Co., Inc. $ 4 084 $ 4 538 32 383 Meridian Bioscience Inc. 751 769 116 967 Pfizer Inc. 5 235 5 095

37 616 39 036 10.6Industrials 12 920 3M Co. 2 626 3 094 3 800 Allegiant Travel Co. 719 848 10 877 Applied Industrial Technologies Inc. 615 866 14 186 Boeing Co. 2 794 2 962 15 445 Brady Corp. 665 778 10 563 CEB Inc. 788 858 14 005 CH Robinson Worldwide Inc. 1 316 1 376 9 573 Cummins Inc. 1 748 1 755 22 379 Eaton Corp. PLC 1 964 2 013 28 252 Emerson Electric Co. 2 005 2 112 24 681 Fastenal Co. 1 355 1 555 12 379 HNI Corp. 592 928 18 549 Honeywell International Inc. 2 820 2 882 7 584 Hubbell Inc. 1 015 1 187 7 265 Lockheed Martin Corp. 1 889 2 435 3 967 National Presto Industries Inc. 447 566 14 305 Norfolk Southern Corp. 1 658 2 073 44 559 Pitney Bowes Inc. 1 162 908 8 110 Powell Industries Inc. 360 424 18 610 Raven Industries Inc. 515 629 24 746 Resources Connection Inc. 489 639 19 393 Robert Half International Inc. 987 1 269 9 161 Rockwell Automation Inc. 1 321 1 651 20 936 Union Pacific Corp. 2 430 2 911 17 913 United Parcel Service Inc. 2 349 2 754 19 302 United Technologies Corp. 2 718 2 838 20 898 Waste Management Inc. 1 692 1 987 5 036 Watsco Inc. 883 1 000

39 922 45 298 12.3Information Technology 27 140 Analog Devices Inc. 1 997 2 643 51 098 Apple Inc. 6 538 7 937 25 052 Automatic Data Processing Inc. 2 967 3 453 114 772 Cisco Systems Inc. 3 951 4 651. 127 097 HP Inc. 2 432 2 529 105 303 Intel Corp. 4 398 5 122 21 734 International Business

Machines Corp. 4 442 4 838 19 778 KLA-Tencor Corp. 2 099 2 087 86 894 Microsoft Corp. 5 954 7 241 19 751 Motorola Solutions Inc. 2 138 2 196 32 782 National Instruments Corp. 1 314 1 355 30 891 NIC Inc. 815 990 31 381 Paychex Inc. 2 250 2 562 46 479 QUALCOMM Inc. 3 806 4 064 28 794 TE Connectivity Ltd. 2 274 2 675 20 186 Tessera Holding Corp. 819 1 197 332 Tessera Technologies Inc. 17 20 38 992 Texas Instruments Inc. 2 954 3 816 29 811 Xilinx Inc. 1 867 2 413

53 032 61 789 16.7


Materials 6 134 Air Products & Chemicals Inc. $ 1 075 $ 1 183 7 100 Avery Dennison Corp. 686 669 8 886 Bemis Co. Inc. 583 570 17 240 Commercial Metals Co. 351 504 5 280 Compass Minerals International Inc. 559 555 5 336 Haynes International Inc. 237 308 5 398 Innophos Holdings Inc. 313 378 10 255 LyondellBasell Industries NV 1 110 1 180 12 883 Myers Industries Inc. 256 247 12 203 Nucor Corp. 743 974 6 692 Packaging Corp. of America 586 761 11 997 PH Glatfelter Co. 316 384 7 512 Praxair Inc. 1 143 1 180 6 308 Reliance Steel & Aluminum Co. 534 673 10 012 RPM International Inc. 702 723 7 107 Schweitzer-Mauduit International Inc. 351 434 5 083 Scotts Miracle-Gro Co. 425 651 8 961 Sonoco Products Co. 493 633

10 463 12 007 3.2Real Estate 8 566 Agree Realty Corp. 391 529 10 447 American Assets Trust Inc. 553 604 14 246 American Campus Communities Inc. 745 951 6 121 AvalonBay Communities Inc. 1 375 1 453 7 796 Boston Properties Inc. 1 244 1 315 8 786 Camden Property Trust 959 991 17 354 Chesapeake Lodging Trust 586 602 17 598 Douglas Emmett Inc. 735 863 7 060 EastGroup Properties Inc. 561 699 8 608 EPR Properties 696 829 16 766 Equity Residential 1 545 1 447 10 404 Extra Space Storage Inc. 1 061 1 078 5 571 Federal Realty Investment Trust 1 036 1 062 32 870 Franklin Street Properties Corp. 477 571 12 304 HFF Inc. 439 499 12 659 Highwoods Properties Inc. 756 866 20 892 Hospitality Properties Trust 811 889 18 461 Kite Realty Group Trust 647 581 16 777 Liberty Property Trust 756 889 6 858 Life Storage Inc. 755 784 9 603 LTC Properties Inc. 524 605 15 596 National Retail Properties Inc. 925 924 4 240 PS Business Parks Inc. 476 663 5 421 Public Storage 1 413 1 624 23 435 Retail Opportunity Investments Corp. 628 664 5 164 Saul Centers Inc. 359 461 7 582 Simon Property Group Inc. 1 756 1 806 27 297 Summit Hotel Properties Inc. 448 587 15 517 Tanger Factory Outlet Centers Inc. 705 745 8 071 Taubman Centers Inc. 757 800 14 001 Urstadt Biddle Properties Inc. 372 453 16 434 Ventas Inc. 1 254 1 378 16 284 Weingarten Realty Investors 772 782 33 676 Weyerhaeuser Co. 1 386 1 359

27 903 30 353 8.2

213


December 31, 2016




Telecommunication Services 122 524 AT&T Inc. $ 6 244 $ 6 987 30 028 Spok Holdings Inc. 646 836 38 743 Telephone & Data Systems Inc. 1 367 1 500 90 124 Verizon Communications Inc. 5 539 6 452

13 796 15 775 4.3Utilities 51 050 AES Corp. 777 796 7 107 ALLETE Inc. 532 612 16 108 Alliant Energy Corp. 644 818 15 229 American Electric Power Co., Inc. 1 147 1 286 16 080 Aqua America Inc. 597 648 7 733 Atmos Energy Corp. 568 769 14 241 Dominion Resources Inc. 1 270 1 463 8 168 DTE Energy Co. 846 1 079 7 902 El Paso Electric Co. 384 493 14 313 Eversource Energy 1 051 1 060 14 520 Hawaiian Electric Industries Inc. 577 644 6 142 IDACORP Inc. 595 663 18 359 MDU Resources Group Inc. 511 708 11 737 New Jersey Resources Corp. 446 559 9 628 NextEra Energy Inc. 1 303 1 542 17 434 OGE Energy Corp. 685 782 25 019 PPL Corp. 1 037 1 142 19 693 Public Service Enterprise Group Inc. 1 005 1 159 8 641 Sempra Energy 1 180 1 166 21 847 Southern Co. 1 433 1 441 6 238 Southwest Gas Corp. 461 641 13 464 UGI Corp. 655 832 9 403 Vectren Corp. 520 658 13 029 WEC Energy Group Inc. 1 009 1 025 6 433 WGL Holdings Inc. 483 658 19 431 Xcel Energy Inc. 1 044 1 061

20 760 23 705 6.4 TOTAL UNITED STATES EQUITIES 328 171 368 331 99.7 Less: Transaction costs (36) – – TOTAL INVESTMENTS $ 328 135 368 331 99.7 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 246 0.3 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 369 577 100.0

214






2016December 31

2015

ASSETSInvestments at fair value $ 368 331 $ 250 425 Cash 1 268 1 263 Due from investment dealers 21 –Subscriptions receivable 1 516 –Dividends receivable, interest accrued and other assets 528 443 TOTAL ASSETS 371 664 252 131 LIABILITIESDue to investment dealers 1 519 633 Distributions payable 431 489 Accounts payable and accrued expenses 137 97 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 2 087 1 219 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 369 577 $ 250 912


NAV PER UNIT $ 29.93 $ 26.69



INCOME (see note 3 in the generic notes)Dividends $ 9 127 $ 6 990 Other income (loss) 229 248 Securities lending revenue (see note 7 in the generic notes) 42 6 Net realized gain (loss) on investments 12 879 11 462 Net gain (loss) on foreign currencies and other net assets 33 20 Change in unrealized gain (loss) on investments 23 350 8 921 TOTAL INCOME (LOSS) 45 660 27 647 EXPENSES (see notes – ETF Specific Information)Management fees 1 132 805 Independent Review Committee costs 4 3 GST/HST 109 67 Transaction costs 75 103 Withholding tax 1 306 1 036 TOTAL EXPENSES 2 626 2 014 INCREASE (DECREASE) IN NAV $ 43 034 $ 25 633 INCREASE (DECREASE) IN NAV PER UNIT $ 4.04 $ 3.16

215





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 43 034 $ 25 633 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (12 879) (11 462)Change in unrealized loss (gain) on investments (23 350) (8 921)(Increase) decrease in accrued receivables (85) (183)Increase (decrease) in accrued payables 40 44 Cost of investments purchased (280 273) (324 237)Proceeds on sales of investments 199 461 226 467NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (74 052) (92 659)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 104 197 113 319 Cash paid on redemption of redeemable units (23 612) (14 668)Distributions paid to holders of redeemable units (6 528) (5 170)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 74 057 $ 93 481 Net increase (decrease) in cash for the period 5 822 Cash (bank overdraft), beginning of period 1 263 441 CASH (BANK OVERDRAFT), END OF PERIOD $ 1 268 $ 1 263


216






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 250 912 $ 132 021 INCREASE (DECREASE) IN NAV 43 034 25 633 Early redemption fees – –Proceeds from redeemable units issued 105 713 113 319 Reinvestments of distributions to holders of redeemable units 11 298 11 221 Redemption of redeemable units (23 612) (14 668)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 93 399 109 872 Distributions from net income (6 441) (5 330)Distributions from net gains (11 299) (11 284)Distributions from capital (28) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (17 768) (16 614)NET INCREASE (DECREASE) IN NAV 118 665 118 891 NAV AT END OF PERIOD $ 369 577 $ 250 912

217



December 31, 2016





high-quality U.S. dividend-paying equity securities that will

provide regular income and that have the potential for long-

term capital growth.






2016December 31

2015

United States Equities Information Technology 16.7 13.4 Industrials 12.3 12.6 Financials 12.1 19.2 Consumer Staples 10.7 12.3 Health Care 10.6 10.6 Energy 8.5 8.0 Real Estate 8.2 – Consumer Discretionary 6.7 8.8 Utilities 6.4 6.9 Telecommunication Services 4.3 4.7 Materials 3.2 3.4 Other Net Assets 0.3 0.1 Total 100.0 100.0

Currency risk (% of net assets)

The table below summarizes the ETF’s net exposure (after

hedging, if any) to currency risk as at:

CurrencyDecember 31

2016December 31

2015

United States dollar 99.7 100.2Total 99.7 100.2

As at December 31, 2016, if the Canadian dollar had

strengthened or weakened by 1% in relation to the above

currencies, with all other factors kept constant, the ETF’s








using a 35-month (December 31, 2015 – 23-month)

historical correlation of data of the ETF’s return and the

index, with all other factors kept constant, as at:

December 31 2016

December 31 2015

S&P 1500 Total Return Index (CAD) + or - 0.8 + or - 0.9





















December 31, 2016.

218



December 31, 2016








Opening units 9 400 5 550 Issued number of units 3 850 4 450 Reinvested number of units 379 420Units consolidated* (379) (420)Redeemed number of units (900) (600)Ending number of units 12 350 9 400





December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015







December 31 2016

December 31 2015

$ % $ %

Gross revenue 68 100 10 100RBC IS (paid) (24) (35) (4) (35)Tax withheld (2) (3) – –ETF revenue 42 62 6 65




December 31 2016

December 31 2015

RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF 29.1 21.3RBC Strategic Global Dividend Leaders ETF 0.1 –Total 29.2 21.3

219



December 31, 2016




ETF UNITS 3 597 647 RBC Quant U.S. Dividend

Leaders ETF* $ 98 174 $ 107 660

TOTAL ETF UNITS 98 174 107 660 102.1Less: Transaction costs (4) – –TOTAL INVESTMENTS $ 98 170 107 660 102.1UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (2 313) (2.2)TOTAL PORTFOLIO 105 347 99.9OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 82 0.1NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 105 429 100.0

SCHEDULE AForeign Exchange Contracts Unrealized Contracts Maturity Date Gain (Loss)

Bought CAD 102 875 Sold USD 78 392 @ 1.3123 13-Jan-2017 $ (2 232)Bought CAD 3 297 Sold USD 2 513 @ 1.3122 13-Jan-2017 (72)Bought CAD 61 Sold USD 47 @ 1.3088 13-Jan-2017 (2)Bought USD 850 Sold CAD 1 146 @ 1.3486 13-Jan-2017 (7)Bought CAD 1 155 Sold USD 861 @ 1.3407 13-Jan-2017 –

TOTAL FOREIGN EXCHANGE $ (2 313)

All counterparties have a credit rating of at least A.


220






2016December 31

2015

ASSETSInvestments at fair value $ 107 660 $ 53 393 Cash 252 168 Due from investment dealers 1 149 –Subscriptions receivable 1 159 –Dividends receivable, interest accrued and other assets 127 104 TOTAL ASSETS 110 347 53 665 LIABILITIESDue to investment dealers 1 146 –Redemptions payable 1 163 –Unrealized loss on foreign exchange contracts 2 313 1 174 Distributions payable 296 86 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 4 918 1 260 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 105 429 $ 52 405


NAV PER UNIT $ 23.17 $ 20.16



INCOME (see note 3 in the generic notes)Dividends $ 2 149 $ 890 Securities lending revenue (see note 7 in the generic notes) 7 10 Net realized gain (loss) on investments 7 747 591 Net gain (loss) on foreign currencies and other net assets 3 052 (4 942)Change in unrealized gain (loss) on investments 5 682 3 567 Change in unrealized gain (loss) in value of forward contracts (1 139) (1 094)TOTAL INCOME (LOSS) 17 498 (978)EXPENSES (see notes – ETF Specific Information)Transaction costs 8 4 TOTAL EXPENSES 8 4 INCREASE (DECREASE) IN NAV $ 17 490 $ (982)INCREASE (DECREASE) IN NAV PER UNIT $ 3.92 $ (0.61)

221





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 17 490 $ (982)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (7 747) (591)Change in unrealized loss (gain) on investments and foreign exchange contracts (4 543) (2 473)(Increase) decrease in accrued receivables (23) (82)Increase (decrease) in accrued payables – – Cost of investments purchased (80 492) (50 855)Proceeds on sales of investments 39 651 12 394 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (35 664) (42 589)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 62 061 48 849 Cash paid on redemption of redeemable units (24 263) (5 390)Distributions paid to holders of redeemable units (2 050) (748)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 35 748 $ 42 711 Net increase (decrease) in cash for the period 84 122 Cash (bank overdraft), beginning of period 168 46 CASH (BANK OVERDRAFT), END OF PERIOD $ 252 $ 168

Interest received (paid) $ – $ – Dividends received, net of withholding taxes $ 2 126 $ 808

222





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 52 405 $ 10 735 INCREASE (DECREASE) IN NAV 17 490 (982)Early redemption fees – –Proceeds from redeemable units issued 63 220 48 849 Reinvestments of distributions to holders of redeemable units 3 939 – Redemption of redeemable units (25 426) (5 390)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 41 733 43 459 Distributions from net income (2 249) (807)Distributions from net gains (3 939) – Distributions from capital (11) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (6 199) (807)NET INCREASE (DECREASE) IN NAV 53 024 41 670 NAV AT END OF PERIOD $ 105 429 $ 52 405


223



December 31, 2016



with exposure, either directly or indirectly through investment

in other ETFs managed by RBC GAM, to the performance of

a diversified portfolio of high-quality U.S. dividend-paying

equity securities that will provide regular income and that have

the potential for long-term capital growth, while seeking to

minimize the exposure to currency fluctuations between the

U.S. and Canadian dollars.


The ETF invests in the RBC Quant U.S. Dividend Leaders ETF.

The ETF’s exposure to financial instrument risk is based on

the underlying ETF asset mix.





2016December 31

2015

United States Equities Information Technology 16.7 13.4 Industrials 12.3 12.6 Financials 12.1 19.2 Consumer Staples 10.7 12.3 Health Care 10.6 10.6 Energy 8.5 8.0 Real Estate 8.2 – Consumer Discretionary 6.7 8.8 Utilities 6.4 6.9 Telecommunication Services 4.3 4.7 Materials 3.2 3.4 Other Net Assets 0.3 0.1 Total 100.0 100.0


Since the currency risk of the ETF has been hedged using

foreign exchange contracts, the ETF has minimal sensitivity

to changes in foreign exchange rates.







December 31 2016

December 31 2015

S&P 1500 Total Return Index (USD) + or - 0.8 + or - 0.7








ETF units 107 660 – – 107 660 Derivatives – assets – – – –Derivatives – liabilities – (2 313) – (2 313)Total financial instruments 107 660 (2 313) – 105 347 % of total portfolio 102.2 (2.2) – 100.0


ETF units 53 393 – – 53 393 Derivatives – assets – 33 – 33 Derivatives – liabilities – (1 207) – (1 207)Total financial instruments 53 393 (1 174) – 52 219 % of total portfolio 102.2 (2.2) – 100.0








224



December 31, 2016




underlying mutual fund as a percentage of NAV, and the


the underlying fund (“Ownership”). The underlying fund is

established and conducts business in Canada, and has an


December 31 2016

December 31 2015


RBC Quant U.S. Dividend Leaders ETF 102.1 29.1 101.8 21.3



December 31, 2016.








Opening units 2 600 500 Issued number of units 3 100 2 350 Reinvested number of units 168 – Units consolidated* (168) –Redeemed number of units (1 150) (250)Ending number of units 4 550 2 600





December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %


225



December 31, 2016




UNITED STATES EQUITIESConsumer Discretionary 442 Amazon Inc. $ 447 $ 445 1 183 Best Buy Co., Inc. 56 68 729 Carnival Corp. 48 51 1 032 CBS Corp. 73 88 1 070 Coach Inc. 54 50 683 Darden Restaurants Inc. 57 67 895 Dollar General Corp. 93 89 782 Dollar Tree Inc. 85 81 608 Foot Locker Inc. 49 58 6 075 Ford Motor Co. 97 99 312 Garmin Ltd. 18 20 501 Genuine Parts Co. 62 64 919 Goodyear Tire & Rubber Co. 36 38 549 Harley-Davidson Inc. 36 43 192 Hasbro Inc. 22 20 1 231 Interpublic Group of Cos. Inc. 37 39 710 Kohl’s Corp. 52 47 288 Leggett & Platt Inc. 18 19 1 451 Lowe’s Cos. Inc. 140 138 662 Mattel Inc. 25 24 716 Michael Kors Holdings Ltd. 46 41 91 Mohawk Industries Inc. 22 24 545 Nordstrom Inc. 37 35 455 Omnicom Group Inc. 51 52 111 Priceline Group Inc. 203 219 328 PVH Corp. 50 40 967 Ross Stores Inc. 74 85 459 Scripps Networks Interactive Inc. 44 44 1 274 Target Corp. 127 123 447 Tiffany & Co. 49 46 1 143 TJX Cos. Inc. 111 115 2 937 Twenty-First Century Fox Inc. 109 110 698 Urban Outfitters Inc. 28 27 940 VF Corp. 73 67 1 513 Walt Disney Co. 200 212 112 Whirlpool Corp. 25 27 311 Wyndham Worldwide Corp. 29 32 240 Wynn Resorts Ltd. 29 28

2 812 2 875 11.1Consumer Staples 2 030 Altria Group Inc. 160 184 1 347 Archer-Daniels-Midland Co. 77 82 733 Campbell Soup Co. 58 59 1 171 Church & Dwight Co., Inc. 69 69 3 515 Coca-Cola Co. 197 196 1 313 ConAgra Foods Inc. 59 70 787 Costco Wholesale Corp. 155 169 1 691 CVS Health Corp. 172 179 594 Dr Pepper Snapple Group Inc. 67 72 1 128 General Mills Inc. 91 93 477 Hershey Co. 59 66


Consumer Staples (cont.) 1 164 Hormel Foods Corp. $ 53 $ 54 377 JM Smucker Co. 71 65 746 Kellogg Co. 72 74 861 Kimberly-Clark Corp. 139 132 980 Kraft Heinz Co. 108 115 457 McCormick & Co., Inc. 53 57 1 348 PepsiCo Inc. 178 189 2 728 Procter & Gamble Co. 289 309 764 Tyson Foods Inc. 66 63 2 069 Wal-Mart Stores Inc. 196 192 1 455 Whole Foods Market Inc. 60 60

2 449 2 549 9.8Energy 718 Anadarko Petroleum Corp. 59 67 615 Apache Corp. 42 52 262 Concho Resources Inc. 42 47 1 365 ConocoPhillips 85 92 632 EOG Resources Inc. 71 86 402 EQT Corp. 37 35 7 086 Exxon Mobil Corp. 779 858 3 159 FMC Technologies Inc. 135 151 1 609 Helmerich & Payne Inc. 134 167 572 Hess Corp. 42 48 1 873 Marathon Oil Corp. 39 43 884 Noble Energy Inc. 41 45 1 584 Valero Energy Corp. 128 145

1 634 1 836 7.1Financials 224 Affiliated Managers Group Inc. 46 44 851 Aflac Inc. 74 79 815 Allstate Corp. 71 81 1 413 American Express Co. 126 140 520 Ameriprise Financial Inc. 72 77 294 Assurant Inc. 32 37 14 138 Bank of America Corp. 311 419 2 007 Bank of New York Mellon Corp. 111 128 2 694 BB&T Corp. 156 170 237 BlackRock Inc. 108 121 1 095 Capital One Financial Corp. 110 128 507 Cincinnati Financial Corp. 44 52 2 547 Citizens Financial Group Inc. 106 122 1 079 Discover Financial Services 83 104 1 254 E*TRADE Financial Corp. 44 58 3 415 Fifth Third Bancorp. 88 124 1 012 Hartford Financial Services Group Inc. 59 65 1 490 Invesco Ltd. 59 61 4 190 JPMorgan Chase & Co. 374 484 1 707 Leucadia National Corp. 49 53 917 Loews Corp. 54 58 2 668 Morgan Stanley 143 151 1 905 Navient Corp. 37 42 704 Northern Trust Corp. 67 84 1 315 PNC Financial Services Group Inc. 164 206

226


December 31, 2016




Financials (cont.) 883 Principal Financial Group Inc. $ 59 $ 69 819 Prudential Financial Inc. 86 114 6 129 Regions Financial Corp. 85 118 945 State Street Corp. 100 98 1 920 SunTrust Banks Inc. 111 141 811 T. Rowe Price Group Inc. 77 82 484 Torchmark Corp. 39 48 564 Travelers Cos Inc. 82 93 837 Unum Group 37 49

3 264 3 900 15.0Health Care 1 511 Agilent Technologies Inc. 83 92 1 296 Amgen Inc. 262 254 1 313 Baxter International Inc. 77 78 426 Becton Dickinson and Co. 94 95 480 Biogen Inc. 206 183 863 Cardinal Health Inc. 89 83 1 018 Cerner Corp. 72 65 215 Cooper Cos Inc. 51 50 2 017 Eli Lilly & Co. 199 199 2 403 Gilead Sciences Inc. 280 231 777 HCA Holdings Inc. 76 77 291 Henry Schein Inc. 59 59 974 Hologic Inc. 46 52 103 Intuitive Surgical Inc. 83 88 2 782 Johnson & Johnson 404 429 332 Laboratory Corp. of America Holdings 56 57 741 Mallinckrodt PLC 64 50 513 McKesson Corp. 115 97 1 678 Medtronic PLC 177 160 3 761 Merck & Co., Inc, 287 297 7 892 Pfizer Inc. 346 344 501 Quest Diagnostics Inc. 53 62 1 003 UnitedHealth Group Inc. 189 215 391 Varian Medical Systems Inc. 45 47 404 Waters Corp. 72 73

3 485 3 437 13.2Industrials 745 3M Co. 176 177 168 Acuity Brands Inc. 58 52 792 Boeing Co. 161 165 1 005 Caterpillar Inc. 128 125 257 Cintas Corp. 34 40 1 723 CSX Corp. 81 83 425 Cummins Inc. 67 78 716 Deere & Co. 90 99 1 324 Delta Air Lines Inc. 69 87 1 040 Eaton Corp. PLC 90 94 1 364 Emerson Electric Co. 93 102 613 Expeditors International of

Washington Inc. 40 44 677 Flowserve Corp. 42 44 668 Fortune Brands Home & Security Inc. 52 48 643 Illinois Tool Works Inc. 91 106 740 Ingersoll-Rand PLC 66 74 592 Jacobs Engineering Group Inc. 37 45


Industrials (cont.) 287 L-3 Communications

Holdings Inc. $ 50 $ 59 1 L3 Technologies Inc. – – 564 Norfolk Southern Corp. 69 82 974 PACCAR Inc. 79 83 394 Parker-Hannifin Corp. 61 74 672 Pentair PLC 54 51 879 Quanta Services Inc. 32 41 566 Raytheon Co. 105 108 636 Republic Services Inc. 42 49 481 Robert Half International Inc. 29 31 397 Rockwell Automation Inc. 60 72 1 239 Southwest Airlines Co. 69 83 438 Stanley Black & Decker Inc. 69 67 727 United Continental Holdings Inc. 54 71 656 United Parcel Service Inc. 92 101 390 United Rentals Inc. 43 55 654 Waste Management Inc. 51 62 198 WW Grainger Inc. 58 62 740 Xylem Inc. 48 49

2 440 2 663 10.2Information Technology 1 404 Accenture PLC 200 221 541 Alphabet Inc. 537 560 4 048 Apple Inc. 587 629 3 454 Applied Materials Inc. 140 149 1 347 Automatic Data Processing Inc. 155 186 1 762 CA Inc. 71 75 7 274 Cisco Systems Inc. 307 295 796 Citrix Systems Inc. 83 95 3 663 Corning Inc. 103 119 3 670 eBay Inc. 142 146 1 162 Electronic Arts Inc. 111 123 2 678 Facebook Inc. 431 413 5 974 HP Inc. 114 119 6 594 Intel Corp. 289 321 1 402 International Business

Machines Corp. 283 312 900 Intuit Inc. 125 138 1 833 Mastercard Inc. 238 254 1 648 NetApp Inc. 78 78 1 386 Paychex Inc. 98 113 3 210 PayPal Holdings Inc. 164 170 941 Red Hat Inc. 90 88 1 626 Seagate Technology PLC 84 83 896 Skyworks Solutions Inc. 91 90 1 294 Teradata Corp. 50 47 2 137 Texas Instruments Inc. 196 209 675 VeriSign Inc. 67 69 2 884 Western Union Co. 76 84 1 250 Xilinx Inc. 81 101

4 991 5 287 20.2Materials 436 Air Products & Chemicals Inc. 83 84 412 Albemarle Corp. 44 48 215 Avery Dennison Corp. 19 20 1 596 Dow Chemical Co. 106 121 555 FMC Corp. 40 42

227


December 31, 2016




Materials (cont.) 587 International Paper Co. $ 36 $ 42 708 LyondellBasell Industries NV 78 81 113 Martin Marietta Materials Inc. 27 34 610 Nucor Corp. 41 49 579 PPG Industries Inc. 78 74 542 Praxair Inc. 88 85 213 Vulcan Materials Co. 31 36

671 716 2.8Real Estate 590 Apartment Investment &

Management Co. 32 36 264 AvalonBay Communities Inc. 60 62 334 Boston Properties Inc. 55 56 705 Equity Residential 64 61 1 424 General Growth Properties Inc. 50 48 1 259 HCP Inc. 49 50 1 180 Kimco Realty Corp. 41 40 397 Macerich Co. 40 38 1 025 Prologis Inc. 69 72 620 Realty Income Corp. 48 48 685 Ventas Inc. 59 57 426 Vornado Realty Trust 56 60 686 Welltower Inc. 60 62

683 690 2.7Telecommunication Services 9 516 AT&T Inc. 497 543 6 851 Verizon Communications Inc. 450 490

947 1 033 4.0Utilities 2 421 AES Corp. 37 38 743 Alliant Energy Corp. 37 38 798 Ameren Corp. 49 56 1 014 American Electric Power Co., Inc. 81 86 1 368 CenterPoint Energy Inc. 39 45 940 CMS Energy Corp. 48 52 440 DTE Energy Co. 50 58 1 073 Duke Energy Corp. 107 112 771 Edison International 68 74 577 Entergy Corp. 54 57 876 Eversource Energy. 63 65 1 119 FirstEnergy Corp. 48 46 1 546 NRG Energy Inc. 24 25 352 Pinnacle West Capital Corp. 32 37 445 SCANA Corp. 39 44 1 281 Xcel Energy Inc. 65 70

841 903 3.5TOTAL UNITED STATES EQUITIES 24 217 25 889 99.6Less: Transaction costs (1) – –TOTAL INVESTMENTS $ 24 216 25 889 99.6OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 99 0.4NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 25 988 100.0

228






2016December 31

2015

ASSETSInvestments at fair value $ 25 889 $ 13 263Cash 122 81Dividends receivable, interest accrued and other assets 28 14 TOTAL ASSETS 26 039 13 358 LIABILITIESDistributions payable 40 73Accounts payable and accrued expenses 11 4 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 51 77 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 25 988 $ 13 281


NAV PER UNIT $ 23.63 $ 22.13



INCOME (see note 3 in the generic notes)Dividends $ 391 $ 122 Other income (loss) 8 2 Securities lending revenue (see note 7 in the generic notes) 1 –Net realized gain (loss) on investments 916 81 Change in unrealized gain (loss) on investments 916 756 TOTAL INCOME (LOSS) 2 232 961 EXPENSES (see notes – ETF Specific Information)Management fees 69 20 GST/HST 9 3 Transaction costs 4 1 Withholding tax 59 18 TOTAL EXPENSES 141 42 INCREASE (DECREASE) IN NAV $ 2 091 $ 919 INCREASE (DECREASE) IN NAV PER UNIT $ 2.58 $ 2.63

229





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 2 091 $ 919 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (916) (81)Change in unrealized loss (gain) on investments (916) (756)(Increase) decrease in accrued receivables (14) (14)Increase (decrease) in accrued payables 7 4 Cost of investments purchased (31 682) (17 003)Proceeds on sales of investments 20 888 4 577 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (10 542) (12 354)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 17 582 13 534 Cash paid on redemption of redeemable units (6 733) (1 026)Distributions paid to holders of redeemable units (266) (73)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 10 583 $ 12 435 Net increase (decrease) in cash for the period 41 81 Cash (bank overdraft), beginning of period 81 – CASH (BANK OVERDRAFT), END OF PERIOD $ 122 $ 81


230






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 13 281 $ – INCREASE (DECREASE) IN NAV 2 091 919 Early redemption fees – –Proceeds from redeemable units issued 17 582 13 534 Reinvestments of distributions to holders of redeemable units 522 – Redemption of redeemable units (6 733) (1 026)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 11 371 12 508 Distributions from net income (232) (66)Distributions from net gains (522) (44)Distributions from capital – (36)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (754) (146)NET INCREASE (DECREASE) IN NAV 12 707 13 281 NAV AT END OF PERIOD $ 25 988 $ 13 281

231



December 31, 2016





portfolio of high-quality U.S. equity securities that have the

potential for long-term capital growth.







2016December 31

2015

United States Equities Information Technology 20.3 22.0 Financials 15.0 16.2 Health Care 13.2 14.9 Consumer Discretionary 11.1 12.0 Industrials 10.2 10.3 Consumer Staples 9.8 9.3 Energy 7.1 6.1 Telecommunication Services 4.0 2.5 Utilities 3.5 3.8 Materials 2.8 2.8 Real Estate 2.7 – Other Net Assets 0.3 0.1 Total 100.0 100.0




CurrencyDecember 31

2016December 31

2015

United States dollar 100.2 100.5Total 100.2 100.5














December 31 2016

December 31 2015

S&P 500 Total Return Index (CAD) + or - 0.9 + or - 0.8





















December 31, 2016.

232



December 31, 2016








Opening units 600 – Issued number of units 800 600 Reinvested number of units 22 – Units consolidated* (22) –Redeemed number of units (300) – Ending number of units 1 100 600





December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015







December 31 2016

December 31 2015

$ % $ %

Gross revenue 2 100 – –RBC IS (paid) (1) (35) – –Tax withheld – – – – ETF revenue 1 65 – –




December 31 2016

December 31 2015

RBC Quant U.S. Equity Leaders (CAD Hedged) ETF 36.7 29.1RBC Strategic Global Equity Leaders ETF 3.1 –Total 39.8 29.1

233



December 31, 2016




ETF UNITS 403 715 RBC Quant U.S. Equity

Leaders ETF* $ 8 895 $ 9 538

TOTAL ETF UNITS $ 8 895 9 538 101.6UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (177) (1.9)TOTAL PORTFOLIO 9 361 99.7OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 23 0.3NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 9 384 100.0


Bought CAD 8 150 Sold USD 6 211 @ 1.3123 13-Jan-2017 $ (177)Bought CAD 273 Sold USD 208 @ 1.3112 13-Jan-2017 (6)Bought CAD 1 036 Sold USD 768 @ 1.3482 13-Jan-2017 6

TOTAL FOREIGN EXCHANGE $ (177)



234






2016December 31

2015

ASSETSInvestments at fair value $ 9 538 $ 3 866 Cash 26 3 Subscriptions receivable 1 047 –Dividends receivable, interest accrued and other assets 12 21 TOTAL ASSETS 10 623 3 890 LIABILITIESDue to investment dealers 1 035 –Unrealized loss on foreign exchange contracts 177 52 Distributions payable 27 24 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 239 76 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 9 384 $ 3 814


NAV PER UNIT $ 20.85 $ 19.07



INCOME (see note 3 in the generic notes)Dividends $ 99 $ 50 Securities lending revenue (see note 7 in the generic notes) – 1 Net realized gain (loss) on investments 307 30 Net gain (loss) on foreign currencies and other net assets 82 (224)Change in unrealized gain (loss) on investments 513 130 Change in unrealized gain (loss) in value of forward contracts (125) (52)TOTAL INCOME (LOSS) 876 (65)EXPENSES (see notes – ETF Specific Information)Transaction costs 1 – TOTAL EXPENSES 1 – INCREASE (DECREASE) IN NAV $ 875 $ (65)INCREASE (DECREASE) IN NAV PER UNIT $ 2.38 $ (0.56)

235





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 875 $ (65)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (307) (30)Change in unrealized loss (gain) on investments and foreign exchange contracts (388) (78)(Increase) decrease in accrued receivables 9 (21)Increase (decrease) in accrued payables – – Cost of investments purchased (8 623) (5 852)Proceeds on sales of investments 4 806 2 146 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3 628) (3 900)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 7 717 5 804 Cash paid on redemption of redeemable units (3 940) (1 873)Distributions paid to holders of redeemable units (126) (28)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 3 651 $ 3 903 Net increase (decrease) in cash for the period 23 3 Cash (bank overdraft), beginning of period 3 – CASH (BANK OVERDRAFT), END OF PERIOD $ 26 $ 3


236





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 3 814 $ – INCREASE (DECREASE) IN NAV 875 (65)Early redemption fees – –Proceeds from redeemable units issued 8 764 5 804 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (3 940) (1 873)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 4 824 3 931 Distributions from net income (100) (23)Distributions from net gains – – Distributions from capital (28) (29)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (128) (52)NET INCREASE (DECREASE) IN NAV 5 570 3 814 NAV AT END OF PERIOD $ 9 384 $ 3 814


237



December 31, 2016



with broad exposure, either directly or indirectly through

investment in other ETFs managed by RBC GAM, to the

performance of a diversified portfolio of high-quality U.S.

equity securities that have the potential for long-term capital

growth, while seeking to minimize the exposure to currency

fluctuations between the U.S. and Canadian dollars.



The ETF invests in the RBC Quant U.S. Equity Leaders ETF.







2016December 31

2015

United States Equities Information Technology 20.3 22.0 Financials 15.0 16.2 Health Care 13.2 14.9 Consumer Discretionary 11.1 12.0 Industrials 10.2 10.3 Consumer Staples 9.8 9.3 Energy 7.1 6.1 Telecommunication Services 4.0 2.5 Utilities 3.5 3.8 Materials 2.8 2.8 Real Estate 2.7 –Other Net Assets 0.3 0.1 Total 100.0 100.0











December 31 2016

December 31 2015

S&P 500 Total Return Index (USD) + or - 1.0 + or - 0.9








ETF units 9 538 – – 9 538 Derivatives – assets – – – – Derivatives – liabilities – (177) – (177)Total financial instruments 9 538 (177) – 9 361 % of total portfolio 101.9 (1.9) – 100.0


ETF units 3 866 – – 3 866 Derivatives – assets – 1 – 1 Derivatives – liabilities – (53) – (53)Total financial instruments 3 866 (52) – 3 814 % of total portfolio 101.4 (1.4) – 100.0








238



December 31, 2016









December 31 2016

December 31 2015


RBC Quant U.S. Equity Leaders ETF 101.6 36.7 101.4 29.1












Opening units 200 – Issued number of units 450 300 Reinvested number of units – – Redeemed number of units (200) (100)Ending number of units 450 200




December 31 2016

December 31 2015

$ % $ %

Total transaction costs 1 100 – –Related-party brokerage commissions* 1 100 – –Commission arrangements† – – – –





December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %

Gross revenue – – 2 100RBC IS (paid) – – (1) (35)Tax withheld – – – – ETF revenue – – 1 65

239



December 31, 2016




EUROPEAN EQUITIESConsumer Discretionary 15 934 Berkeley Group Holdings PLC $ 784 $ 741 8 371 Hugo Boss AG 858 688 294 683 ITV PLC 1 000 1 008 14 136 Nokian Renkaat OYJ 613 708 5 911 Paddy Power Betfair PLC 989 849 26 870 Persimmon PLC 903 791 17 641 ProSiebenSat.1 Media AG 965 914 6 206 RTL Group SA 649 612 43 187 SES SA 1 266 1 278 307 643 Taylor Wimpey PLC 796 783

8 823 8 372 8.0Consumer Staples 25 531 Marine Harvest ASA 600 619 29 412 Unilever NV 1 651 1 628

2 251 2 247 2.1Energy 108 588 Petrofac Ltd. 1 438 1 564 186 944 Royal Dutch Shell PLC 6 444 6 947 79 110 Total SA 4 975 5 452

12 857 13 963 13.3Financials 131 746 Aberdeen Asset Management PLC 828 562 23 097 Admiral Group PLC 763 699 8 178 Allianz SE 1 663 1 816 47 749 AXA SA 1 439 1 620 4 707 Baloise Holding AG 763 797 278 615 Banco Santander SA 1 709 1 954 21 280 BNP Paribas SA 1 455 1 823 222 010 CaixaBank SA 860 986 20 663 CNP Assurances 442 514 63 073 Credit Agricole SA 969 1 051 29 465 Danske Bank A/S 1 099 1 201 132 126 Direct Line Insurance Group PLC 896 809 53 252 DnB ASA 848 1 065 28 427 Gjensidige Forsikring ASA 616 607 7 333 Groupe Bruxelles Lambert SA 790 827 5 415 Hannover Rueck SE 725 787 218 141 HSBC Holdings PLC 2 273 2 375 86 521 ING Groep NV 1 416 1 636 79 909 Investec PLC 698 710 283 818 Legal & General Group PLC 1 297 1 164 90 846 Natixis SA 678 689 95 314 Nordea Bank AB 1 380 1 425 307 973 Old Mutual PLC 1 110 1 058 15 206 Provident Financial PLC 742 718 19 171 Sampo Oyj 1 159 1 155 77 902 Skandinaviska Enskilda Banken AB 1 088 1 099 62 682 Svenska Handelsbanken AB 1 061 1 171


Financials (cont.) 37 706 Swedbank AB $ 1 128 $ 1 226 10 781 Swiss Re AG 1 333 1 373 22 059 Tryg A/S 580 536 77 038 UBS Group AG 1 656 1 621

33 464 35 074 33.4Health Care 51 531 Coloplast A/S 4 934 4 669 199 940 Novo Nordisk A/S 8 872 9 688

13 806 14 357 13.7Index Funds 9 Vanguard FTSE Europe ETF 1 1

1 1 –Industrials 9 772 Adecco Group AG 803 860 8 412 Andritz AG 564 568 4 196 Kuehne + Nagel International AG 719 745 14 374 Metso OYJ 478 551 9 647 Randstad Holding NV 637 703 314 SGS SA 810 858 24 197 Skanska AB 644 768

4 655 5 053 4.8Information Technology 72 097 Telefonaktiebolaget LM Ericsson 545 569

545 569 0.5Materials 73 352 CRH PLC 3 401 3 419 34 694 Voestalpine AG 1 548 1 830

4 949 5 249 5.0Real Estate 5 511 Fonciere Des Regions Real Estate

Investment Trust 629 647 4 285 Gecina S.A. Real Estate

Investment Trust 737 797 6 426 ICADE Real Estate Investment Trust 599 616 4 015 Unibail-Rodamco SE Real Estate

Investment Trust 1 300 1 288 24 053 Vonovia SE 1 050 1 051

4 315 4 399 4.2Telecommunication Services 24 448 Elisa OYJ 1 017 1 070 82 571 Inmarsat PLC 1 152 1 027 27 357 Proximus 1 191 1 059 2 440 Swisscom AG 1 681 1 468 86 785 Tele2 AB 1 040 936 70 877 Telenor ASA 1 441 1 424 267 135 TeliaSonera AB 1 585 1 448

9 107 8 432 8.0

240


December 31, 2016



Utilities 120 554 E.ON SE $ 1 044 $ 1 142 24 669 Enagas SA 812 842 32 362 Endesa SA 872 921 42 897 Fortum OYJ 968 884 103 953 National Grid PLC 1 826 1 640 49 751 SSE PLC 1 424 1 280 148 675 Terna Rete Elettrica Nazionale SpA 964 915

7 910 7 624 7.2TOTAL EUROPEAN EQUITIES 102 683 105 340 100.2Less: Transaction costs (261) – –TOTAL INVESTMENTS $ 102 422 105 340 100.2 OTHER NET ASSETS (LIABILITIES) ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (179) (0.2)NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 105 161 100.0


241






2016December 31

2015

ASSETSInvestments at fair value $ 105 340 $ 94 736 Cash 354 63 Due from investment dealers 6 157 169 Dividends receivable, interest accrued and other assets 131 189 TOTAL ASSETS 111 982 95 157 LIABILITIESDue to investment dealers 3 225 –Redemptions payable 3 252 –Distributions payable 290 217 Accounts payable and accrued expenses 54 48 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 6 821 265 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 105 161 $ 94 892


NAV PER UNIT $ 21.68 $ 22.33



INCOME (see note 3 in the generic notes)Dividends $ 5 041 $ 3 102 Other income (loss) (3) (2)Securities lending revenue (see note 7 in the generic notes) 137 64 Net realized gain (loss) on investments (4 015) (578)Net gain (loss) on foreign currencies and other net assets 43 84 Change in unrealized gain (loss) on investments 2 129 663 TOTAL INCOME (LOSS) 3 332 3 333 EXPENSES (see notes – ETF Specific Information)Management fees 504 361 Independent Review Committee costs 4 1 GST/HST 59 45 Transaction costs 449 418 Withholding tax 617 438 TOTAL EXPENSES 1 633 1 263 INCREASE (DECREASE) IN NAV $ 1 699 $ 2 070 INCREASE (DECREASE) IN NAV PER UNIT $ 0.35 $ 0.63

242





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 699 $ 2 070 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 4 015 578 Change in unrealized loss (gain) on investments (2 129) (664)(Increase) decrease in accrued receivables 58 (182)Increase (decrease) in accrued payables 6 44 Cost of investments purchased (213 341) (252 509)Proceeds on sales of investments 198 088 164 867NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (11 604) (85 796)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 47 902 101 096 Cash paid on redemption of redeemable units (32 147) (13 170)Distributions paid to holders of redeemable units (3 860) (2 073)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 11 895 $ 85 853 Net increase (decrease) in cash for the period 291 57 Cash (bank overdraft), beginning of period 63 6 CASH (BANK OVERDRAFT), END OF PERIOD $ 354 $ 63


243






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 94 892 $ 7 170 INCREASE (DECREASE) IN NAV 1 699 2 070 Early redemption fees – –Proceeds from redeemable units issued 47 902 101 096 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (35 399) (13 170)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 12 503 87 926 Distributions from net income (3 927) (2 084)Distributions from net gains – – Distributions from capital (6) (190)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (3 933) (2 274)NET INCREASE (DECREASE) IN NAV 10 269 87 722 NAV AT END OF PERIOD $ 105 161 $ 94 892

244



December 31, 2016





high-quality European dividend-paying equity securities that

will provide regular income and that have the potential for

long-term capital growth.






2016December 31

2015

European Equities Financials 33.4 26.4 Health Care 13.7 9.5 Energy 13.3 12.1 Telecommunication Services 8.0 12.7 Consumer Discretionary 8.0 5.1 Utilities 7.2 8.7 Materials 5.0 6.0 Industrials 4.8 9.8 Real Estate 4.2 – Consumer Staples 2.1 9.5 Information Technology 0.5 –Other Net Assets (0.2) 0.2 Total 100.0 100.0




CurrencyDecember 31

2016December 31

2015

Euro 43.0 45.3Pound sterling 22.7 31.1Swiss franc 15.3 9.3Swedish krona 8.2 10.0Danish krone 7.3 4.0Norwegian krone 3.5 0.6Total 100.0 100.3














December 31 2016

December 31 2015

MSCI Europe Total Return Index (CAD) + or - 0.9 + or - 0.9























245



December 31, 2016









Opening units 4 250 350 Issued number of units 2 300 4 500 Reinvested number of units – – Redeemed number of units (1 700) (600)Ending number of units 4 850 4 250




December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %





December 31 2016

December 31 2015

RBC Quant European Dividend Leaders (CAD Hedged) ETF 53.7 73.3

246



December 31, 2016




ETF UNITS 2 683 833 RBC Quant European

Dividend Leaders ETF* $ 58 832 $ 58 192

TOTAL ETF UNITS 58 832 58 192 101.3Less: Transaction costs (4) – –TOTAL INVESTMENTS $ 58 828 58 192 101.3UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (668) (1.2)TOTAL PORTFOLIO 57 524 100.1OTHER NET ASSETS (LIABILITIES) ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (77) (0.1)NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 57 447 100.0


Bought CAD 12 516 Sold GBP 7 520 @ 1.6643 13-Jan-2017 $ 52Bought CAD 478 Sold GBP 287 @ 1.6648 13-Jan-2017 2Bought GBP 148 Sold CAD 247 @ 1.6652 13-Jan-2017 (1)Bought CAD 395 Sold GBP 238 @ 1.6616 13-Jan-2017 1Bought CAD 466 Sold DKK 2 484 @ 0.1875 13-Jan-2017 (7)Bought CAD 8 034 Sold DKK 42 840 @ 0.1875 13-Jan-2017 (121)Bought CAD 276 Sold DKK 1 469 @ 0.1880 13-Jan-2017 (4)Bought DKK 883 Sold CAD 166 @ 0.1879 13-Jan-2017 2Bought CAD 23 369 Sold EUR 16 756 @ 1.3947 13-Jan-2017 (344)Bought CAD 1 342 Sold EUR 960 @ 1.3978 13-Jan-2017 (17)Bought EUR 336 Sold CAD 469 @ 1.3973 13-Jan-2017 6Bought CAD 2 022 Sold NOK 13 001 @ 0.1555 13-Jan-2017 (3)Bought CAD 111 Sold NOK 715 @ 0.1558 13-Jan-2017 –Bought NOK 259 Sold CAD 40 @ 0.1547 13-Jan-2017 –Bought NOK 691 Sold CAD 107 @ 0.1548 13-Jan-2017 1Bought CAD 69 Sold NOK 443 @ 0.1557 13-Jan-2017 –Bought CAD 170 Sold SEK 1 189 @ 0.1431 13-Jan-2017 (6)Bought CAD 4 394 Sold SEK 30 703 @ 0.1431 13-Jan-2017 (142)Bought CAD 199 Sold SEK 1 384 @ 0.1436 13-Jan-2017 (6)Bought SEK 628 Sold CAD 90 @ 0.1432 13-Jan-2017 3Bought CAD 4 100 Sold CHF 3 167 @ 1.2946 13-Jan-2017 (83)Bought CAD 140 Sold CHF 108 @ 1.2993 13-Jan-2017 (2)Bought CHF 62 Sold CAD 81 @ 1.2997 13-Jan-2017 1




247





2016December 31

2015

ASSETSInvestments at fair value $ 58 192 $ 69 563 Cash 125 204 Dividends receivable, interest accrued and other assets 157 159 TOTAL ASSETS 58 474 69 926 LIABILITIESUnrealized loss on foreign exchange contracts 668 701 Distributions payable 359 198 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 027 899 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 57 447 $ 69 027


NAV PER UNIT $ 22.09 $ 20.61




INCOME (see note 3 in the generic notes)Dividends $ 2 389 $ 1 828 Securities lending revenue (see note 7 in the generic notes) 14 1 Net realized gain (loss) on investments (2 414) (140)Net gain (loss) on foreign currencies and other net assets 6 891 (6 397)Change in unrealized gain (loss) on investments (506) (148)Change in unrealized gain (loss) in value of forward contracts 33 (768)TOTAL INCOME (LOSS) 6 407 (5 624)EXPENSES (see notes – ETF Specific Information)Transaction costs 7 7 TOTAL EXPENSES 7 7 INCREASE (DECREASE) IN NAV $ 6 400 $ (5 631)INCREASE (DECREASE) IN NAV PER UNIT $ 2.05 $ (2.07)

248




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 6 400 $ (5 631)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 2 414 140 Change in unrealized loss (gain) on investments and foreign exchange contracts 473 916 (Increase) decrease in accrued receivables 2 (147)Increase (decrease) in accrued payables – – Cost of investments purchased (25 389) (84 708)Proceeds on sales of investments 33 840 20 006 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 17 740 (69 424)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 14 179 80 364 Cash paid on redemption of redeemable units (29 615) (9 251)Distributions paid to holders of redeemable units (2 383) (1 508)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (17 819) $ 69 605 Net increase (decrease) in cash for the period (79) 181 Cash (bank overdraft), beginning of period 204 23 CASH (BANK OVERDRAFT), END OF PERIOD $ 125 $ 204



249





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 69 027 $ 5 239 INCREASE (DECREASE) IN NAV 6 400 (5 631)Early redemption fees – –Proceeds from redeemable units issued 14 179 80 364 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (29 615) (9 251)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS (15 436) 71 113 Distributions from net income (2 538) (1 676)Distributions from net gains – – Distributions from capital (6) (18)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (2 544) (1 694)NET INCREASE (DECREASE) IN NAV (11 580) 63 788 NAV AT END OF PERIOD $ 57 447 $ 69 027


250



December 31, 2016


The investment objective of the ETF is to provide

unitholders with exposure, either directly or indirectly

through investment in other ETFs managed by RBC GAM,

to the performance of a diversified portfolio of high-quality

European dividend-paying equity securities that will provide


capital growth, while seeking to minimize the exposure to

currency fluctuations between foreign currencies and the

Canadian dollar.


The ETF invests in the RBC Quant European Dividend

Leaders ETF. The ETF’s exposure to financial instrument risk

is based on the underlying ETF asset mix.





2016December 31

2015

European Equities Financials 33.4 26.4 Health Care 13.7 9.5 Energy 13.3 12.1 Telecommunication Services 8.0 12.7 Consumer Discretionary 8.0 5.1 Utilities 7.2 8.7 Materials 5.0 6.0 Industrials 4.8 9.8 Real Estate 4.2 – Consumer Staples 2.1 9.5 Information Technology 0.5 –Other Net Assets (0.2) 0.2 Total 100.0 100.0











December 31 2016

December 31 2015

MSCI Europe Total Return Index (100% CAD Hedged) + or - 0.9 + or - 0.9


















251



December 31, 2016








December 31 2016

December 31 2015


RBC Quant European Dividend Leaders ETF 101.3 53.7 100.8 73.3












Opening units 3 350 250 Issued number of units 700 3 550 Reinvested number of units – – Redeemed number of units (1 450) (450)Ending number of units 2 600 3 350




December 31 2016

December 31 2015

$ % $ %







December 31 2016

December 31 2015

Fair value of securities loaned – 1 149Fair value of collateral received – 1 172





December 31 2016

December 31 2015

$ % $ %


252



December 31, 2016




INTERNATIONAL EQUITIESConsumer Discretionary 107 537 Barratt Developments PLC $ 1 035 $ 824 18 572 Berkeley Group Holdings PLC 959 864 26 900 Bridgestone Corp. 1 316 1 304 40 700 Casio Computer Co., Ltd. 719 774 22 600 Denso Corp. 1 207 1 316 27 000 Fuji Heavy Industries Ltd. 1 433 1 481 9 011 Hugo Boss AG 1 145 741 56 200 Isuzu Motors Ltd. 856 957 333 433 ITV PLC 1 162 1 140 16 444 Nokian Renkaat OYJ 684 824 6 621 Paddy Power Betfair PLC 1 169 951 30 804 Persimmon PLC 1 062 907 20 102 ProSiebenSat.1 Media AG 1 045 1 041 6 948 RTL Group SA 738 685 175 200 Sands China Ltd. 1 092 1 021 12 400 Sankyo Co., Ltd. 545 538 30 100 Sumitomo Rubber Industries Ltd. 559 642 346 584 Taylor Wimpey PLC 1 206 882 34 000 USS Co., Ltd. 697 728 314 000 Wynn Macau Ltd. 648 670 28 700 Yamaha Motor Co., Ltd. 739 849

20 016 19 139 6.1Consumer Staples 68 000 Japan Tobacco Inc. 3 390 3 005 75 877 Marine Harvest ASA 1 476 1 841 30 000 Orkla ASA 364 366 11 600 Pola Orbis Holdings Inc. 1 100 1 287 85 846 Unilever NV 4 858 4 749

11 188 11 248 3.6Energy 221 358 Petrofac Ltd. 2 954 3 188 377 505 Royal Dutch Shell PLC 13 036 14 028 282 277 Snam SpA 1 537 1 563 160 331 Total SA 10 216 11 049 149 583 Woodside Petroleum Ltd. 4 665 4 526

32 409 34 354 11.0Financials 51 061 Admiral Group PLC 1 684 1 546 52 900 AEON Financial Service Co., Ltd. 1 325 1 263 17 760 Allianz SE 3 775 3 944 335 600 Aozora Bank Ltd. 1 432 1 594 135 619 Assicurazioni Generali SpA 2 288 2 709 131 266 Australia & New Zealand

Banking Group Ltd. 3 869 3 878 104 086 AXA SA 3 148 3 531 10 390 Baloise Holding AG 1 603 1 759 191 420 Bank Hapoalim BM 1 396 1 528 125 509 Bank of Queensland Ltd. 1 487 1 447 128 608 Bendigo & Adelaide Bank Ltd. 1 476 1 587


Financials (cont.) 459 300 BOC Hong Kong Holdings Ltd. $ 1 931 $ 2 205 57 869 CNP Assurances 1 274 1 441 5 000 Commonwealth Bank of Australia 402 400 273 100 Concordia Financial Group Ltd. 1 769 1 767 64 461 Danske Bank A/S 2 619 2 627 167 300 DBS Group Holdings Ltd. 2 749 2 693 288 198 Direct Line Insurance Group PLC 2 009 1 764 116 492 DnB ASA 1 845 2 330 238 200 Fukuoka Financial Group Inc. 1 382 1 421 62 743 Gjensidige Forsikring ASA 1 337 1 339 11 915 Hannover Rueck SE 1 482 1 733 179 222 Investec PLC 1 505 1 592 93 800 Japan Exchange Group Inc. 1 787 1 801 33 100 Japan Post Bank Co., Ltd. 536 534 621 701 Legal & General Group PLC 2 760 2 551 6 000 Macquarie Group Ltd. 508 508 342 299 Mapfre SA 1 353 1 404 297 800 Mebuki Financial Group Inc. 1 392 1 483 187 400 Mitsubishi UFJ Lease &

Finance Co., Ltd. 1 170 1 301 126 414 National Australia Bank Ltd. 3 813 3 765 211 699 Nordea Bank AB 3 093 3 166 679 881 Old Mutual PLC 2 292 2 335 121 200 ORIX Corp. 2 285 2 542 167 653 Platinum Asset Management Ltd. 981 860 34 591 Provident Financial PLC 1 682 1 633 329 900 Resona Holdings Inc. 1 799 2 274 42 221 Sampo Oyj 2 483 2 544 293 700 Seven Bank Ltd. 1 115 1 131 172 131 Skandinaviska Enskilda Banken AB 2 466 2 428 44 900 Sumitomo Mitsui Trust Holdings Inc. 2 197 2 159 142 015 Svenska Handelsbanken AB 2 399 2 654 83 626 Swedbank AB 2 470 2 720 23 739 Swiss Re AG 2 564 3 023 186 000 The Chiba Bank Ltd. 1 323 1 533 168 000 The Hachijuni Bank Ltd. 1 125 1 310 209 000 The Hiroshima Bank Ltd. 1 035 1 312 51 000 Tokio Marine Holdings Inc. 2 634 2 812 48 854 Tryg A/S 1 216 1 187 128 196 Westpac Banking Corp. 4 170 4 056

96 435 101 124 32.2Health Care 110 490 Coloplast A/S 10 784 10 011 301 200 Mitsubishi Tanabe Pharma Corp. 6 792 7 941 427 785 Novo Nordisk A/S 19 232 20 727

36 808 38 679 12.4Index Funds 404 iShares MSCI EAFE ETF 31 31

31 31 –

253


December 31, 2016




Industrials 106 777 ABB Ltd. $ 2 705 $ 3 026 22 905 Adecco Group AG 1 866 2 014 89 900 Amada Holdings Co., Ltd. 1 384 1 349 19 580 Andritz AG 1 314 1 321 70 111 Deutsche Lufthansa AG 1 056 1 217 64 487 EasyJet PLC 1 149 1 074 45 200 Hino Motors Ltd. 714 618 33 500 Japan Airlines Co., Ltd. 1 457 1 315 9 786 Kuehne + Nagel International AG 1 661 1 738 33 574 Metso OYJ 1 092 1 287 6 600 Park24 Co., Ltd. 239 241 22 976 Randstad Holding NV 1 535 1 675 138 763 RELX NV 3 016 3 139 744 SGS SA 1 932 2 034 449 200 Singapore Technologies

Engineering Ltd. 1 392 1 347 57 830 Skanska AB 1 534 1 836 100 000 Sydney Airport 583 582

24 629 25 813 8.3Information Technology 18 500 Mixi Inc. 907 908 45 700 Seiko Epson Corp. 1 012 1 300 13 800 Tokyo Electron Ltd. 1 134 1 753

3 053 3 961 1.3Materials 510 651 Fletcher Building Ltd. 5 036 5 062 81 800 Maruichi Steel Tube Ltd. 3 272 3 579 94 078 Voestalpine AG 4 570 4 962

12 878 13 603 4.3Real Estate 684 800 Ascendas Real Estate

Investment Trust 1 475 1 443 20 450 Azrieli Group 1 169 1 191 779 800 CapitaLand Mall Trust 1 432 1 364 10 000 Daito Trust Construction Co. Ltd. 1 575 2 021 62 700 Daiwa House Industry Co. Ltd. 1 918 2 305 12 223 Fonciere Des Regions Real Estate

Investment Trust 1 421 1 434 9 467 Gecina S.A. Real Estate

Investment Trust 1 604 1 760 262 Japan Prime Realty Investment Corp.

Real Estate Investment Trust 1 198 1 387 254 Japan Real Estate Investment Corp.

Real Estate Investment Trust 1 884 1 860 490 Nippon Prologis Inc. Real Estate

Investment Trust 1 402 1 346 786 000 Sino Land Co. 1 697 1 580 100 000 Stockland Real Estate

Investment Trust 445 445 123 000 Swire Pacific Ltd. ‘A’ 1 775 1 575 8 899 Unibail-Rodamco SE Real Estate

Investment Trust 2 763 2 855


Real Estate (cont.) 750 United Urban Investment Corp.

Real Estate Investment Trust $ 1 692 $ 1 534 640 331 Vicinity Centres Real Estate

Investment Trust 1 913 1 859

25 363 25 959 8.3Telecommunication Services 519 752 Bezeq The Israeli

Telecommunication Corp., Ltd. 1 235 1 326 31 551 Elisa OYJ 1 304 1 380 30 000 Inmarsat PLC 378 374 82 800 KDDI Corp. 3 393 2 818 83 700 NTT DoCoMo Inc. 1 953 2 563 1 399 000 PCCW Ltd. 1 189 1 016 34 491 Proximus 1 482 1 335 623 000 Singapore Telecommunications Ltd. 2 265 2 111 403 528 Spark New Zealand Ltd. 1 094 1 287 301 800 StarHub Ltd. 1 068 787 3 031 Swisscom AG 2 084 1 824 88 681 Telenor ASA 1 897 1 782 406 522 Telstra Corp., Ltd. 2 250 2 013

21 592 20 616 6.6Utilities 107 000 Cheung Kong Infrastructure

Holdings Ltd. 1 204 1 142 130 900 CLP Holdings Ltd. 1 392 1 613 178 707 E.ON SE 1 631 1 694 36 442 Enagas SA 1 333 1 244 47 908 Endesa SA 1 259 1 364 153 405 National Grid PLC 2 675 2 419 250 500 Osaka Gas Co., Ltd. 1 223 1 295 127 000 Power Assets Holdings Ltd. 1 551 1 501 73 960 SSE PLC 2 130 1 903 222 760 Terna Rete Elettrica Nazionale SpA 1 379 1 371 238 000 Tokyo Gas Co., Ltd. 1 252 1 447

17 029 16 993 5.4TOTAL INTERNATIONAL EQUITIES 301 430 311 520 99.5Less: Transaction costs (474) – –TOTAL INVESTMENTS $ 300 956 311 520 99.5 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 141 0.5 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 312 661 100.0

254






2016December 31

2015

ASSETSInvestments at fair value $ 311 520 $ 301 261 Cash 1 707 748 Due from investment dealers 3 275 181 Dividends receivable, interest accrued and other assets 415 543 TOTAL ASSETS 316 917 302 733 LIABILITIESDue to investment dealers 3 457 – Distributions payable 649 770 Accounts payable and accrued expenses 150 145 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 4 256 915 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 312 661 $ 301 818


NAV PER UNIT $ 22.66 $ 23.13



INCOME (see note 3 in the generic notes)Dividends $ 14 629 $ 10 576 Other income (loss) (3) (5)Securities lending revenue (see note 7 in the generic notes) 265 221 Net realized gain (loss) on investments (1 990) 6 907 Net gain (loss) on foreign currencies and other net assets (235) 17 Change in unrealized gain (loss) on investments (2 004) 15 636 TOTAL INCOME (LOSS) 10 662 33 352 EXPENSES (see notes – ETF Specific Information)Management fees 1 547 1 166 Independent Review Committee costs 4 3 GST/HST 144 95 Transaction costs 793 648 Withholding tax 2 268 1 566 TOTAL EXPENSES 4 756 3 478 INCREASE (DECREASE) IN NAV $ 5 906 $ 29 874 INCREASE (DECREASE) IN NAV PER UNIT $ 0.41 $ 2.84

255





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 5 906 $ 29 874 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 1 990 (6 907)Change in unrealized loss (gain) on investments 2 004 (15 636)(Increase) decrease in accrued receivables 128 (316)Increase (decrease) in accrued payables 5 76 Cost of investments purchased (456 794) (438 611)Proceeds on sales of investments 442 904 291 781 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3 857) (139 739)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 83 641 154 373 Cash paid on redemption of redeemable units (67 738) (6 771)Distributions paid to holders of redeemable units (11 087) (7 387)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 4 816 $ 140 215 Net increase (decrease) in cash for the period 959 476 Cash (bank overdraft), beginning of period 748 272 CASH (BANK OVERDRAFT), END OF PERIOD $ 1 707 $ 748


256






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 301 818 $ 132 174 INCREASE (DECREASE) IN NAV 5 906 29 874 Early redemption fees – –Proceeds from redeemable units issued 83 641 154 373 Reinvestments of distributions to holders of redeemable units – 6 786 Redemption of redeemable units (67 738) (6 771)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 15 903 154 388 Distributions from net income (10 951) (8 277)Distributions from net gains – (6 038)Distributions from capital (15) (303)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (10 966) (14 618)NET INCREASE (DECREASE) IN NAV 10 843 169 644 NAV AT END OF PERIOD $ 312 661 $ 301 818

257



December 31, 2016





high-quality dividend-paying equity securities in markets in

Europe, Australasia and the Far East (EAFE) that will provide


capital growth.






2016December 31

2015

International Equities Financials 32.3 31.7 Health Care 12.4 7.6 Energy 11.0 9.0 Industrials 8.3 9.8 Real Estate 8.3 – Telecommunication Services 6.6 9.9 Consumer Discretionary 6.1 4.7 Utilities 5.4 7.1 Materials 4.4 6.5 Consumer Staples 3.6 11.9 Information Technology 1.3 1.6 Other Net Assets 0.3 0.2 Total 100.0 100.0




CurrencyDecember 31

2016December 31

2015

Japanese yen 24.3 18.3Euro 21.5 24.4Pound sterling 12.4 18.2Danish krone 11.1 3.6Australian dollar 7.7 12.9Swiss franc 4.9 7.4Swedish krona 4.1 4.3Hong Kong dollar 3.9 5.2Singapore dollar 3.1 3.4Norwegian krone 2.4 0.4New Zealand dollar 2.0 1.1Israeli new shekel 1.3 0.9United States dollar 1.0 –Total 99.7 100.1














December 31 2016

December 31 2015

MSCI EAFE Total Return Index (CAD) + or - 0.9 + or - 1.0



















258



December 31, 2016












Opening units 13 050 6 500 Issued number of units 3 850 6 850 Reinvested number of units – 293Units consolidated* – (293)Redeemed number of units (3 100) (300)Ending number of units 13 800 13 050





December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015







December 31 2016

December 31 2015

$ % $ %





December 31 2016

December 31 2015

RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF 22.8 22.7RBC Strategic Global Dividend Leaders ETF 0.4 –Total 23.2 22.7

259



December 31, 2016




ETF UNITS 3 149 049 RBC Quant EAFE Dividend

Leaders ETF* $ 70 546 $ 71 347

TOTAL ETF UNITS 70 546 71 347 100.8 Less: Transaction costs (3) – – TOTAL INVESTMENTS $ 70 543 71 347 100.8 UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (639) (0.9)TOTAL PORTFOLIO 70 708 99.9 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 66 0.1 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 70 774 100.0


Bought CAD 5 262 Sold AUD 5 351 @ 0.9834 13-Jan-2017 $ 69Bought CAD 335 Sold AUD 341 @ 0.9819 13-Jan-2017 4Bought AUD 178 Sold CAD 175 @ 0.9841 13-Jan-2017 (2)Bought CAD 87 Sold AUD 90 @ 0.9719 13-Jan-2017 –Bought CAD 8 282 Sold GBP 4 976 @ 1.6643 13-Jan-2017 34Bought CAD 456 Sold GBP 274 @ 1.6648 13-Jan-2017 2Bought GBP 165 Sold CAD 275 @ 1.6652 13-Jan-2017 (1)Bought CAD 277 Sold GBP 167 @ 1.6616 13-Jan-2017 1Bought CAD 138 Sold GBP 84 @ 1.6486 13-Jan-2017 (1)Bought CAD 360 Sold DKK 1 918 @ 0.1875 13-Jan-2017 (5)Bought CAD 7 173 Sold DKK 38 248 @ 0.1875 13-Jan-2017 (107)Bought CAD 325 Sold DKK 1 729 @ 0.1880 13-Jan-2017 (4)Bought DKK 1 314 Sold CAD 247 @ 0.1879 13-Jan-2017 (3)Bought CAD 125 Sold DKK 658 @ 0.1903 13-Jan-2017 –Bought CAD 14 289 Sold EUR 10 245 @ 1.3947 13-Jan-2017 (211)Bought CAD 952 Sold EUR 681 @ 1.3978 13-Jan-2017 (12)Bought EUR 344 Sold CAD 480 @ 1.3973 13-Jan-2017 6Bought CAD 242 Sold EUR 171 @ 1.4147 13-Jan-2017 –Bought CAD 2 854 Sold HKD 16 875 @ 0.1691 13-Jan-2017 (64)Bought HKD 539 Sold CAD 91 @ 0.1688 13-Jan-2017 2Bought CAD 44 Sold HKD 254 @ 0.1738 13-Jan-2017 –Bought CAD 866 Sold ILS 2 517 @ 0.3442 13-Jan-2017 (11)Bought CAD 52 Sold ILS 151 @ 0.3452 13-Jan-2017 (1)Bought ILS 84 Sold CAD 29 @ 0.3447 13-Jan-2017 –Bought CAD 15 Sold ILS 42 @ 0.3506 13-Jan-2017 –Bought CAD 525 Sold JPY 46 099 @ 0.0114 13-Jan-2017 (5)Bought CAD 16 226 Sold JPY1 424 564 @ 0.0114 13-Jan-2017 (163)Bought CAD 955 Sold JPY 83 845 @ 0.0114 13-Jan-2017 (9)Bought JPY 48 703 Sold CAD 555 @ 0.0114 13-Jan-2017 6

SCHEDULE A (cont.)Foreign Exchange Contracts Unrealized Contracts Maturity Date Gain (Loss)

Bought CAD 279 Sold JPY 24 053 @ 0.0116 13-Jan-2017 $ 2Bought CAD 1 410 Sold NZD 1 494 @ 0.9435 13-Jan-2017 14Bought CAD 97 Sold NZD 103 @ 0.9443 13-Jan-2017 1Bought NZD 50 Sold CAD 47 @ 0.9465 13-Jan-2017 (1)Bought NZD 46 Sold CAD 43 @ 0.9251 13-Jan-2017 –Bought CAD 55 Sold NZD 59 @ 0.9279 13-Jan-2017 –Bought CAD 23 Sold NZD 25 @ 0.9364 13-Jan-2017 –Bought CAD 1 602 Sold NOK 10 302 @ 0.1555 13-Jan-2017 (3)Bought CAD 141 Sold NOK 908 @ 0.1558 13-Jan-2017 –Bought NOK 349 Sold CAD 54 @ 0.1547 13-Jan-2017 –Bought NOK 317 Sold CAD 49 @ 0.1548 13-Jan-2017 –Bought CAD 26 Sold NOK 169 @ 0.1557 13-Jan-2017 –Bought CAD 88 Sold NOK 563 @ 0.1557 13-Jan-2017 –Bought CAD 2 196 Sold SGD 2 387 @ 0.9201 13-Jan-2017 (19)Bought CAD 156 Sold SGD 169 @ 0.9204 13-Jan-2017 (1)Bought SGD 79 Sold CAD 73 @ 0.9203 13-Jan-2017 1Bought SGD 76 Sold CAD 71 @ 0.9308 13-Jan-2017 –Bought CAD 35 Sold SGD 38 @ 0.9293 13-Jan-2017 –Bought CAD 2 767 Sold SEK 19 335 @ 0.1431 13-Jan-2017 (88)Bought CAD 209 Sold SEK 1 458 @ 0.1436 13-Jan-2017 (6)Bought SEK 649 Sold CAD 93 @ 0.1432 13-Jan-2017 3Bought CAD 47 Sold SEK 315 @ 0.1479 13-Jan-2017 –Bought SEK 636 Sold CAD 94 @ 0.1478 13-Jan-2017 –Bought CAD 3 309 Sold CHF 2 556 @ 1.2946 13-Jan-2017 (66)Bought CAD 184 Sold CHF 142 @ 1.2993 13-Jan-2017 (3)Bought CHF 85 Sold CAD 110 @ 1.2997 13-Jan-2017 2 Bought CAD 55 Sold CHF 42 @ 1.3175 13-Jan-2017 –




260





2016December 31

2015

ASSETSInvestments at fair value $ 71 347 $ 68 423 Cash 185 237 Subscriptions receivable 1 125 –Dividends receivable, interest accrued and other assets 146 174 TOTAL ASSETS 72 803 68 834 LIABILITIESDue to investment dealers 1 120 –Unrealized loss on foreign exchange contracts 639 1 014 Distributions payable 270 269 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 2 029 1 283 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 70 774 $ 67 551


NAV PER UNIT $ 22.47 $ 21.44




INCOME (see note 3 in the generic notes)Dividends $ 2 832 $ 1 492 Securities lending revenue (see note 7 in the generic notes) 13 7 Net realized gain (loss) on investments 300 98 Net gain (loss) on foreign currencies and other net assets 4 792 (4 268)Change in unrealized gain (loss) on investments (1 349) 2 075 Change in unrealized gain (loss) in value of forward contracts 375 (1 043)TOTAL INCOME (LOSS) 6 963 (1 639)EXPENSES (see notes – ETF Specific Information)Transaction costs 7 4 TOTAL EXPENSES 7 4 INCREASE (DECREASE) IN NAV $ 6 956 $ (1 643)INCREASE (DECREASE) IN NAV PER UNIT $ 1.77 $ (0.82)

261




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 6 956 $ (1 643)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments (300) (98)Change in unrealized loss (gain) on investments and foreign exchange contracts 974 (1 031)(Increase) decrease in accrued receivables 28 (166)Increase (decrease) in accrued payables – – Cost of investments purchased (51 138) (70 989)Proceeds on sales of investments 47 160 7 888 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 3 680 (66 039)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 39 806 68 562 Cash paid on redemption of redeemable units (40 631) (1 106)Distributions paid to holders of redeemable units (2 907) (1 192)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (3 732) $ 66 264 Net increase (decrease) in cash for the period (52) 225 Cash (bank overdraft), beginning of period 237 12 CASH (BANK OVERDRAFT), END OF PERIOD $ 185 $ 237



262





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 67 551 $ 3 189 INCREASE (DECREASE) IN NAV 6 956 (1 643)Early redemption fees – –Proceeds from redeemable units issued 39 806 68 561Reinvestments of distributions to holders of redeemable units 1 340 – Redemption of redeemable units (40 631) (1 107)NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 515 67 454Distributions from net income (2 902) (1 446)Distributions from net gains (1 340) – Distributions from capital (5) (3)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (4 247) (1 449)NET INCREASE (DECREASE) IN NAV 3 223 64 362 NAV AT END OF PERIOD $ 70 774 $ 67 551


263



December 31, 2016




in other ETFs managed by RBC GAM, to the performance

of a diversified portfolio of high-quality dividend-paying

equity securities in markets in Europe, Australasia and the

Far East (EAFE) that will provide regular income and that have

the potential for long-term capital growth, while seeking to

minimize the exposure to currency fluctuations between foreign

currencies and the Canadian dollar.


The ETF invests in the RBC Quant EAFE Dividend Leaders

ETF. The ETF’s exposure to financial instrument risk is based

on the underlying ETF asset mix.





2016December 31

2015

International Equities Financials 32.3 31.7 Health Care 12.4 7.6 Energy 11.0 9.0 Industrials 8.3 9.8 Real Estate 8.3 – Telecommunication Services 6.6 9.9 Consumer Discretionary 6.1 4.7 Utilities 5.4 7.1 Materials 4.4 6.5 Consumer Staples 3.6 11.9 Information Technology 1.3 1.6 Other Net Assets 0.3 0.2 Total 100.0 100.0











December 31 2016

December 31 2015

MSCI EAFE Total Return Index (100% CAD Hedged) + or - 0.8 + or - 0.8










ETF units 68 423 – – 68 423 Derivatives – assets – 159 – 159 Derivatives – liabilities – (1 173) – (1 173)Total financial instruments 68 423 (1 014) – 67 409 % of total portfolio 101.5 (1.5) – 100.0








264



December 31, 2016








December 31 2016

December 31 2015


RBC Quant EAFE Dividend Leaders ETF 100.8 22.8 101.3 22.7



December 31, 2016.








Opening units 3 150 150 Issued number of units 1 950 3 050 Reinvested number of units 61 – Units consolidated* (61) –Redeemed number of units (1 950) (50)Ending number of units 3 150 3 150





December 31 2016

December 31 2015

$ % $ %

Total transaction costs 7 100 4 100Related-party brokerage commissions* 7 100 – –Commission arrangements† – – – –






December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %


265



December 31, 2016




INTERNATIONAL EQUITIESConsumer Discretionary 307 Adidas AG $ 49 $ 65 700 Aisin Seiki Co., Ltd. 39 41 2 079 Aristocrat Leisure Ltd. 32 31 700 Bandai Namco Holdings Inc. 22 26 1 100 Bridgestone Corp. 54 53 1 601 Burberry Group PLC 43 40 709 Carnival PLC 46 48 156 Christian Dior SA 39 44 383 Cie Generale des

Etablissements Michelin 51 57 3 582 Compass Group PLC 86 89 800 Denso Corp. 46 47 888 Electrolux AB 30 30 1 100 Fuji Heavy Industries Ltd. 51 60 7 000 Galaxy Entertainment Group Ltd. 41 41 7 229 GKN PLC 38 40 1 678 Hennes & Mauritz AB 63 63 1 900 Honda Motor Co., Ltd. 70 75 267 Hugo Boss AG 29 22 756 InterContinental Hotels Group PLC 37 46 178 Kering 39 54 7 471 Kingfisher PLC 49 43 355 LVMH Moet Hennessy

Louis Vuitton SA 80 91 1 400 Mazda Motor Corp. 33 31 1 300 Nikon Corp. 27 27 500 Oriental Land Co., Ltd. 37 38 1 366 Persimmon PLC 46 40 1 505 Peugeot SA 33 33 1 300 Sekisui Chemical Co., Ltd. 24 28 6 900 Singapore Press Holdings Ltd. 26 23 1 600 Sony Corp. 67 60 1 800 Sumitomo Electric Industries Ltd. 34 35 800 Suzuki Motor Corp. 27 38 1 800 Toyota Motor Corp. 133 141 2 241 Vivendi SA 59 57 2 876 WPP Plc 83 87 600 Yamaha Corp. 22 25

1 685 1 769 12.0 Consumer Staples 1 300 Ajinomoto Co., Inc. 41 35 900 Asahi Group Holdings Ltd. 38 38 304 Beiersdorf AG 36 35 1 418 Carrefour SA 55 46 2 500 Coca-Cola Amatil Ltd. 24 25 726 Coca-Cola European Partners PLC 34 31 890 Danone SA 84 76 3 652 Diageo PLC 132 127 604 Heineken NV 68 61 1 329 Jeronimo Martins SGPS SA 27 28


Consumer Staples (cont.) 800 Kao Corp. $ 50 $ 51 300 Lawson Inc. 29 28 355 L’Oréal SA 85 87 1 366 Marine Harvest ASA 32 33 708 Metro AG 28 32 1 989 Nestlé SA 192 191 3 025 Orkla ASA 35 37 394 Pernod Ricard SA 58 57 984 Reckitt Benckiser Group PLC 116 112 1 100 Seven & I Holdings Co., Ltd. 62 56 19 912 Tesco PLC 72 68 2 663 Treasury Wine Estates Ltd. 28 28 1 676 Wesfarmers Ltd. 66 69 25 000 WH Group Ltd. 26 27 8 300 Wilmar International Ltd. 25 28 10 672 WM Morrison Supermarkets PLC 37 41 2 352 Woolworths Ltd. 55 55

1 535 1 502 10.2Energy 21 005 BP PLC 147 178 943 Caltex Australia Ltd. 28 28 3 986 ENI SpA 84 87 2 000 Inpex Corp. 23 27 611 Neste Oil OYJ 27 32 631 OMV AG 24 30 2 666 Repsol SA 47 51 2 666 Repsol SA Rights – 1 1 683 Tenaris SA 29 40 2 038 Total SA 128 140 1 698 Woodside Petroleum Ltd. 50 51

587 665 4.5Financials 3 824 3i Group PLC 36 45 924 ABN AMRO Group NV 24 28 7 949 AMP Ltd. 45 39 2 740 Assicurazioni Generali SpA 47 55 715 ASX Ltd. 30 35 2 612 AXA SA 83 89 3 977 Bank Hapoalim BM 28 32 5 125 Bank Leumi Le-Israel BM 26 28 2 019 Bendigo & Adelaide Bank Ltd. 24 25 1 230 BNP Paribas SA 93 105 2 679 Challenger Ltd. 24 29 1 406 Danske Bank A/S 55 57 3 400 DBS Group Holdings Ltd. 47 55 6 390 Direct Line Insurance Group PLC 42 39 2 377 DnB ASA 39 48 974 Erste Group Bank AG 38 38 267 Groupe Bruxelles Lambert SA 28 30 224 Hannover Rueck SE 32 33 18 382 HSBC Holdings PLC 166 199

266


December 31, 2016




Financials (cont.) 4 838 ING Groep NV $ 85 $ 91 21 075 Intesa Sanpaolo SpA 77 72 1 068 Investor AB 48 54 619 KBC Groep NV 48 52 16 317 Legal & General Group PLC 68 67 800 London Stock Exchange Group PLC 38 39 589 Macquarie Group Ltd. 41 50 2 520 Mediobanca SpA 25 28 267 Muenchener

Rueckversicherungs-Gesellschaft AG in Muenchen 67 68

3 083 National Australia Bank Ltd. 81 92 3 986 Natixis SA 26 30 886 NN Group NV 38 40 5 233 Nordea Bank AB 76 78 15 386 Old Mutual PLC 49 53 2 500 ORIX Corp. 47 52 6 200 Oversea-Chinese Banking Corp., Ltd. 52 51 741 Provident Financial PLC 38 35 4 217 Prudential PLC 116 113 4 400 Resona Holdings Inc. 25 30 4 302 RSA Insurance Group PLC 37 42 1 098 Sampo Oyj 66 66 623 Schroders PLC 33 31 693 SCOR SE 27 32 1 226 Societe Generale SA 67 81 550 Sompo Holdings Inc. 25 25 1 600 Sumitomo Mitsui Financial Group Inc. 76 82 554 Swiss Re AG 65 71 1 800 T&D Holdings Inc. 30 32 3 000 The Chiba Bank Ltd. 25 25 800 Tokio Marine Holdings Inc. 45 44 2 900 United Overseas Bank Ltd. 55 55

2 503 2 690 18.2Health Care 2 900 Astellas Pharma Inc. 56 54 700 Chugai Pharmaceutical Co., Ltd. 29 27 228 Cochlear Ltd. 23 27 354 Coloplast A/S 35 32 1 300 Daiichi Sankyo Co., Ltd. 38 36 399 Essilor International SA 62 61 449 Fresenius Medical Care AG &

Co., KGaA 50 51 120 Genmab A/S 26 27 1 152 Grifols SA 31 31 900 Hoya Corp. 47 51 900 Kyowa Hakko Kirin Co., Ltd. 21 17 154 Lonza Group AG 32 36 800 Mitsubishi Tanabe Pharma Corp. 20 21 2 207 Novo Nordisk A/S 148 107 566 Orion OYJ 30 34 800 Otsuka Holdings Co., Ltd. 44 47 830 QIAGEN NV 28 31 507 Roche Holding AG 172 155 1 128 Sanofi 116 122 1 400 Santen Pharmaceutical Co., Ltd. 28 23


Health Care (cont.) 2 957 Smith & Nephew PLC $ 62 $ 60 178 Sonova Holding AG 31 29

1 129 1 079 7.3Index Funds 411 iShares MSCI EAFE ETF 31 32

31 32 0.2Industrials 2 779 ABB Ltd. 69 80 708 ACS Actividades de Construccion y

Servicios SA 29 30 210 Aena SA 34 39 1 331 Alfa Laval AB 28 30 3 000 Asahi Glass Co., Ltd. 26 27 1 692 Atlas Copco AB 58 69 3 841 Brambles Ltd. 43 46 1 017 Bureau Veritas SA 29 26 300 Central Japan Railway Co. 72 66 974 Cie de Saint-Gobain 56 61 3 542 CNH Industrial NV 32 41 400 Daikin Industries Ltd. 39 49 1 683 Deutsche Post AG 62 75 500 East Japan Railway Co. 62 58 658 GEA Group AG 32 36 800 Hankyu Hanshin Holdings Inc. 35 34 2 900 ITOCHU Corp. 48 52 3 000 Kajima Corp. 28 28 1 700 Komatsu Ltd. 39 52 957 Kone OYJ 55 58 2 300 Kubota Corp. 46 44 1 618 Leonardo-Finmeccanica SpA 29 31 2 100 Mitsubishi Corp. 52 60 3 000 Mitsui & Co., Ltd. 48 55 3 000 Nagoya Railroad Co., Ltd. 20 19 1 600 NSK Ltd. 24 25 2 200 Obayashi Corp. 28 28 4 665 Rolls-Royce Holdings PLC 61 52 255 346 Rolls-Royce Holding PLC,

Redeemable C Shares – – 4 356 Royal Mail PLC 38 33 619 Safran SA 55 60 3 104 Sandvik AB 41 52 168 Schindler Holding AG 42 40 886 Schneider Electric SE 74 84 400 Secom Co., Ltd. 41 39 14 SGS SA 41 38 3 000 Shimizu Corp. 36 37 746 Siemens AG 101 124 1 242 Skanska AB 34 39 1 508 SKF AB 37 37 1 717 Smiths Group PLC 40 40 2 800 Sumitomo Corp. 39 44 3 000 Taisei Corp. 25 28 1 125 The Weir Group PLC 30 35 3 000 Tobu Railway Co., Ltd. 20 20 2 000 Toppan Printing Co., Ltd. 23 26 800 Toyota Tsusho Corp. 25 28 532 Vestas Wind Systems A/S 49 46

267


December 31, 2016




Industrials (cont.) 798 Vinci SA $ 70 $ 74 653 Wartsila OYJ Abp 37 39 400 West Japan Railway Co. 30 33 759 Wolseley PLC 58 62 1 000 Yamato Holdings Co., Ltd. 31 27

2 201 2 356 15.9Information Technology 532 ASML Holding NV 69 81 278 AtoS 36 39 900 Brother Industries Ltd. 22 22 290 Cap Gemini SA 36 33 355 Check Point Software

Technologies Ltd. 39 40 2 691 Experian PLC 68 70 900 FUJIFILM Holdings Corp. 45 46 798 Hexagon AB 38 38 200 Hirose Electric Co., Ltd. 34 33 2 387 Infineon Technologies AG 43 56 700 Kyocera Corp. 44 47 300 Murata Manufacturing Co., Ltd. 44 54 279 Nice Ltd. 24 26 200 Nintendo Co., Ltd. 43 56 400 NTT Data Corp. 26 26 700 Omron Corp. 32 36 2 300 Ricoh Co., Ltd. 29 26 985 SAP SE 101 116 1 100 Seiko Epson Corp. 25 31 2 429 STMicroelectronics NV 30 37 3 600 The Sage Group PLC 40 39 400 Trend Micro Inc. 20 19 1 000 Yaskawa Electric Corp. 22 21

910 992 6.7Materials 532 Akzo Nobel NV 47 45 3 885 Anglo American PLC 60 75 256 Arkema SA 30 34 3 000 Asahi Kasei Corp. 36 35 944 BASF SE 98 118 313 Covestro AG 25 29 3 035 Fletcher Building Ltd. 29 30 5 082 Fortescue Metals Group Ltd. 24 29 21 946 Glencore PLC 74 101 1 519 James Hardie Industries Plc 30 32 713 Johnson Matthey PLC 36 38 532 Koninklijke DSM NV 38 43 1 400 Kuraray Co., Ltd. 24 28 353 Lanxess AG 24 31 4 100 Mitsubishi Chemical Holdings Corp. 31 36 3 000 Mitsui Chemicals Inc. 17 18 1 423 Mondi PLC 36 39 2 055 Newcrest Mining Ltd. 35 40 1 600 Nippon Steel & Sumitomo Metal Corp. 42 48 400 Nitto Denko Corp. 35 41 4 999 Norsk Hydro ASA 26 32 1 483 Orica Ltd. 26 25


Materials (cont.) 1 584 Rio Tinto Ltd. $ 77 $ 92 600 Shin-Etsu Chemical Co., Ltd. 47 63 7 Sika AG 43 45 14 328 South32 Ltd. 30 38 4 000 Sumitomo Chemical Co., Ltd. 26 26 3 000 Toray Industries Inc. 33 33 368 Umicore SA 25 28 1 693 UPM-Kymmene OYJ 40 56

1 144 1 328 9.0Real Estate 10 000 CapitaLand Limited 31 28 6 000 Cheung Kong Property Holdings Ltd. 47 49 1 300 Daiwa House Industry Co. Ltd. 47 48 3 574 Dexus Property Group Real Estate

Investment Trust 28 33 178 Gecina S.A. Real Estate

Investment Trust 32 33 6 698 General Property Trust 31 33 5 360 Goodman Group 34 37 2 044 LendLease Group 28 29 5 500 Link Real Estate Investment Trust 45 48 15 898 Mirvac Group Real Estate

Investment Trust 30 33 11 432 Scentre Group Real Estate

Investment Trust 48 52 14 000 Sino Land Co. 29 28 7 770 Stockland Real Estate

Investment Trust 32 35 3 000 Sun Hung Kai Properties Ltd. 48 51 265 Swiss Prime Site AG 29 29 4 000 The Wharf Holdings Ltd. 37 36 178 Unibail-Rodamco SE Real Estate

Investment Trust 61 57 11 119 Vicinity Centres Real Estate

Investment Trust 31 32 1 100 Vonovia SE 48 48 4 645 Westfield Corp. Real Estate

Investment Trust 46 42 3 000 Wheelock & Co. Ltd. 18 23

780 804 5.4Telecommunication Services 3 986 Deutsche Telekom AG 91 92 702 Elisa OYJ 33 31 2 200 KDDI Corp. 75 75 10 169 Koninklijke KPN NV 45 40 1 000 Nippon Telegraph & Telephone Corp. 53 56 1 800 NTT DoCoMo Inc. 50 55 3 188 Orange SA 70 65 619 Proximus 27 24 7 845 Spark New Zealand Ltd. 24 25 68 Swisscom AG 44 41 6 776 Telefonica SA 78 85 2 067 Telenor ASA 41 42 9 288 Telstra Corp., Ltd. 51 46 37 164 Vodafone Group PLC 151 123

833 800 5.4

268


December 31, 2016




Utilities 1 879 AGL Energy Ltd. $ 35 $ 40 1 600 Chubu Electric Power Co., Inc. 29 30 4 000 CLP Holdings Ltd. 48 49 4 000 E.ON SE 42 38 1 153 Endesa SA 31 33 2 500 Engie 51 43 1 893 Fortum OYJ 38 39 1 201 Gas Natural SDG SA 32 30 8 679 Iberdrola SA 75 77 6 000 Osaka Gas Co., Ltd. 32 31 1 355 Red Electrica Corp., SA 38 34 1 077 Severn Trent PLC 43 40 7 394 Snam SpA 44 41 2 701 SSE PLC 75 70 1 240 Suez 26 25 1 500 Tohoku Electric Power Co., Inc. 25 25 6 000 Tokyo Gas Co., Ltd. 33 36 2 863 United Utilities Group PLC 49 43 1 418 Veolia Environnement SA 41 32

787 756 5.1TOTAL INTERNATIONAL EQUITIES 14 125 14 773 99.9 Less: Transaction costs included in Cost (24) – – TOTAL INVESTMENTS $ 14 101 14 773 99.9 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 15 0.1 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 14 788 100.0

269






2016December 31

2015

ASSETSInvestments at fair value $ 14 773 $ 9 300 Cash 71 62 Due from investment dealers 45 15Dividends receivable, interest accrued and other assets 17 8TOTAL ASSETS 14 906 9 385LIABILITIESDistributions payable 110 62 Accounts payable and accrued expenses 8 5 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 118 67 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 14 788 $ 9 318


NAV PER UNIT $ 19.72 $ 20.71



INCOME (see note 3 in the generic notes)Dividends $ 557 $ 119 Securities lending revenue (see note 7 in the generic notes) 6 1 Net realized gain (loss) on investments (414) 12 Net gain (loss) on foreign currencies and other net assets 14 31 Change in unrealized gain (loss) on investments 327 345 TOTAL INCOME (LOSS) 490 508 EXPENSES (see notes – ETF Specific Information)Management fees 76 24 GST/HST 10 3 Transaction costs 56 26 Withholding tax 75 18 TOTAL EXPENSES 217 71 INCREASE (DECREASE) IN NAV $ 273 $ 437 INCREASE (DECREASE) IN NAV PER UNIT $ 0.34 $ 1.23

270





For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 273 $ 437 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 414 (12)Change in unrealized loss (gain) on investments (327) (344)(Increase) decrease in accrued receivables (9) (8)Increase (decrease) in accrued payables 3 5 Cost of investments purchased (40 507) (21 703)Proceeds on sales of investments 34 917 12 744 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (5 236) (8 881)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 11 421 9 029 Cash paid on redemption of redeemable units (5 829) – Distributions paid to holders of redeemable units (347) (86)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 5 245 $ 8 943 Net increase (decrease) in cash for the period 9 62 Cash (bank overdraft), beginning of period 62 – CASH (BANK OVERDRAFT), END OF PERIOD $ 71 $ 62


271






Total2016 2015

NAV AT BEGINNING OF PERIOD $ 9 318 $ – INCREASE (DECREASE) IN NAV 273 437 Early redemption fees – –Proceeds from redeemable units issued 11 421 9 029 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (5 829) – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 5 592 9 029 Distributions from net income (394) (62)Distributions from net gains – (40)Distributions from capital (1) (46)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (395) (148)NET INCREASE (DECREASE) IN NAV 5 470 9 318 NAV AT END OF PERIOD $ 14 788 $ 9 318

272



December 31, 2016





portfolio of high-quality equity securities in markets in

Europe, Australasia and the Far East (EAFE) that have the








2016December 31

2015

International Equities Financials 18.2 26.1 Industrials 16.4 14.9 Consumer Discretionary 12.0 13.6 Consumer Staples 10.2 9.2 Materials 9.0 7.3 Health Care 7.3 9.0 Information Technology 6.2 5.7 Real Estate 5.4 – Telecommunication Services 5.4 5.0 Energy 4.8 3.9 Utilities 4.8 5.0 Other Net Assets 0.3 0.3 Total 100.0 100.0




CurrencyDecember 31

2016December 31

2015

Euro 33.2 29.6Japanese yen 24.1 24.1Pound sterling 17.2 19.0Australian dollar 8.8 7.6Swiss franc 5.1 7.2Swedish krona 3.3 4.4Hong Kong dollar 2.4 3.2Danish krone 1.8 1.6Singapore dollar 1.6 1.4Norwegian krone 1.3 0.5Israeli new shekel 0.6 1.4New Zealand dollar 0.4 0.2United States dollar 0.3 0.5Total 100.1 100.7














December 31 2016

December 31 2015

MSCI EAFE Total Return Index (CAD) + or - 1.0 + or - 0.9



















273



December 31, 2016












Opening units 450 – Issued number of units 600 450 Reinvested number of units – – Redeemed number of units (300) – Ending number of units 750 450




December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015







December 31 2016

December 31 2015

$ % $ %

Gross revenue 9 100 1 100RBC IS (paid) (3) (35) – –Tax withheld – – – – ETF revenue 6 65 1 100




December 31 2016

December 31 2015

RBC Quant EAFE Equity Leaders (CAD Hedged) ETF 70.0 20.0RBC Strategic Global Equity Leaders ETF 3.5 –Total 73.5 20.0

274



December 31, 2016




ETF UNITS 525 909 RBC Quant EAFE

Equity Leaders ETF* $ 10 096 $ 10 369

TOTAL ETF UNITS 10 096 10 369 100.5Less: Transaction costs (1) – –TOTAL INVESTMENTS $ 10 095 10 369 100.5UNREALIZED LOSS ON FOREIGN EXCHANGE CONTRACTS (SCHEDULE A) (86) (0.8)TOTAL PORTFOLIO 10 283 99.7OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 33 0.3NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 10 316 100.0


Bought CAD 856 Sold AUD 871 @ 0.9834 13-Jan-2017 $ 11Bought CAD 48 Sold AUD 49 @ 0.9819 13-Jan-2017 1Bought CAD 1 670 Sold GBP 1 004 @ 1.6643 13-Jan-2017 7Bought CAD 76 Sold GBP 46 @ 1.6648 13-Jan-2017 –Bought CAD 7 Sold DKK 36 @ 0.1875 13-Jan-2017 –Bought CAD 175 Sold DKK 935 @ 0.1875 13-Jan-2017 (3)Bought CAD 8 Sold DKK 45 @ 0.1880 13-Jan-2017 –Bought CAD 3 089 Sold EUR 2 215 @ 1.3947 13-Jan-2017 (46)Bought CAD 262 Sold EUR 187 @ 1.3978 13-Jan-2017 (3)Bought CAD 248 Sold HKD 1 464 @ 0.1691 13-Jan-2017 (6)Bought HKD 48 Sold CAD 8 @ 0.1746 13-Jan-2017 –Bought CAD 87 Sold JPY 7 640 @ 0.0114 13-Jan-2017 (1)Bought CAD 2 273 Sold JPY 199 538 @ 0.0114 13-Jan-2017 (23)Bought CAD 146 Sold JPY 12 812 @ 0.0114 13-Jan-2017 (1)Bought CAD 127 Sold NOK 815 @ 0.1555 13-Jan-2017 –Bought CAD 11 Sold NOK 69 @ 0.1558 13-Jan-2017 –Bought NOK 26 Sold CAD 4 @ 0.1548 13-Jan-2017 –Bought CAD 163 Sold SGD 177 @ 0.9201 13-Jan-2017 (1)Bought CAD 8 Sold SGD 9 @ 0.9204 13-Jan-2017 –Bought CAD 319 Sold SEK 2 228 @ 0.1431 13-Jan-2017 (10)Bought CAD 21 Sold SEK 147 @ 0.1436 13-Jan-2017 (1)Bought CAD 479 Sold CHF 370 @ 1.2946 13-Jan-2017 (10)Bought CAD 30 Sold CHF 23 @ 1.2993 13-Jan-2017 –




275





2016December 31

2015

ASSETSInvestments at fair value $ 10 369 $ 1 864 Cash 33 4 Dividends receivable, interest accrued and other assets 77 12 TOTAL ASSETS 10 479 1 880 LIABILITIESUnrealized loss on foreign exchange contracts 86 29 Distributions payable 77 13 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 163 42 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 10 316 $ 1 838


NAV PER UNIT $ 18.76 $ 18.38




INCOME (see note 3 in the generic notes)Dividends $ 224 $ 39 Net realized gain (loss) on investments – 7 Net gain (loss) on foreign currencies and other net assets 650 (201)Change in unrealized gain (loss) on investments 211 63 Change in unrealized gain (loss) in value of forward contracts (57) (30)TOTAL INCOME (LOSS) 1 028 (122)EXPENSES (see notes – ETF Specific Information)Transaction costs 1 – TOTAL EXPENSES 1 – INCREASE (DECREASE) IN NAV $ 1 027 $ (122)INCREASE (DECREASE) IN NAV PER UNIT $ 2.26 $ (1.23)

276




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 027 $ (122)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments – (7)Change in unrealized loss (gain) on investments and foreign exchange contracts (154) (33)(Increase) decrease in accrued receivables (65) (12)Increase (decrease) in accrued payables – – Cost of investments purchased (8 732) (2 045)Proceeds on sales of investments 438 250 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (7 486) (1 969)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 7 683 2 000 Cash paid on redemption of redeemable units – – Distributions paid to holders of redeemable units (168) (27)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 7 515 $ 1 973 Net increase (decrease) in cash for the period 29 4 Cash (bank overdraft), beginning of period 4 – CASH (BANK OVERDRAFT), END OF PERIOD $ 33 $ 4



277





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 1 838 $ – INCREASE (DECREASE) IN NAV 1 027 (122)Early redemption fees – –Proceeds from redeemable units issued 7 683 2 000 Reinvestments of distributions to holders of redeemable units 446 – Redemption of redeemable units – – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 8 129 2 000 Distributions from net income (216) (16)Distributions from net gains (454) – Distributions from capital (8) (24)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (678) (40)NET INCREASE (DECREASE) IN NAV 8 478 1 838 NAV AT END OF PERIOD $ 10 316 $ 1 838


278



December 31, 2016



unitholders with broad exposure, either directly or

indirectly through investment in other ETFs managed by

RBC GAM, to the performance of a diversified portfolio

of high-quality equity securities in markets in Europe,

Australasia and the Far East (EAFE) that have the potential

for long-term capital growth, while seeking to minimize

the exposure to currency fluctuations between foreign

currencies and the Canadian dollar.



The ETF invests in the RBC Quant EAFE Equity Leaders ETF.







2016December 31

2015

International Equities Financials 18.2 26.1 Industrials 16.4 14.9 Consumer Discretionary 12.0 13.6 Consumer Staples 10.2 9.2 Materials 9.0 7.3 Health Care 7.3 9.0 Information Technology 6.2 5.7 Real Estate 5.4 – Telecommunication Services 5.4 5.0 Energy 4.8 3.9 Utilities 4.8 5.0 Other Net Assets 0.3 0.3Total 100.0 100.0











December 31 2016

December 31 2015

MSCI EAFE Net Index 100% CAD Hedged + or - 1.0 + or - 0.9


















279



December 31, 2016








December 31 2016

December 31 2015


RBC Quant EAFE Equity Leaders ETF 100.5 70.0 101.4 20.0



December 31, 2016.








Opening units 100 – Issued number of units 450 100 Reinvested number of units 24 – Units consolidated* (24) –Redeemed number of units – – Ending number of units 550 100





December 31 2016

December 31 2015

$ % $ %

Total transaction costs 1 100 – –Related-party brokerage commissions* 1 100 – –Commission arrangements† – – – –




280



December 31, 2016




INTERNATIONAL EQUITIESConsumer Discretionary 17 127 Anta Sports Products Ltd. $ 59 $ 69 55 300 Astro Malaysia Holdings Bhd 50 43 1 293 Bajaj Auto Ltd. 66 67 36 000 BEC World PCL 47 22 93 425 Belle International Holdings Ltd. 114 71 37 775 Berjaya Sports Toto Bhd 41 33 28 034 Cheng Shin Rubber Industry Co., Ltd. 74 71 712 Coway Co., Ltd. 73 70 53 032 Great Wall Motor Co., Ltd. 100 66 1 007 Hero MotoCorp., Ltd. 58 61 2 995 Jumbo SA 52 64 1 708 Kangwon Land Inc. 72 68 41 200 Matahari Department Store Tbk PT 63 62 7 678 Merida Industry Co., Ltd. 39 46 4 873 Mr. Price Group Ltd. 70 76 4 719 OPAP SA 48 56 197 582 Surya Citra Media Tbk PT 57 55 4 733 Tofas Turk Otomobil Fabrikasi AS 40 44 9 565 Truworths International Ltd. 78 75

1 201 1 119 4.3Consumer Staples 17 600 Ambev SA 121 120 3 400 British American Tobacco

Malaysia BHD 66 45 1 253 Dongsuh Co., Ltd. 48 38 8 818 Gudang Garam Tbk PT 57 56 148 479 Hanjaya Mandala Sampoerna Tbk PT 58 57 5 107 Hindustan Unilever Ltd. 87 83 19 621 ITC Ltd. 87 94 23 580 Kimberly-Clark de Mexico SAB de CV 68 57 753 KT&G Corp. 85 84 3 335 Spar Group Ltd. 59 65 12 990 Universal Robina Corp. 66 57 35 792 Wal-Mart de Mexico SAB de CV 104 86 76 389 Want Want China Holdings Ltd. 63 66

969 908 3.5Energy 20 757 Bharat Petroleum Corp., Ltd. 201 261 558 948 China Petroleum & Chemical Corp. 531 532 34 548 Coal India Ltd. 217 205 82 372 Oil & Natural Gas Corp., Ltd. 272 311 164 793 Polskie Gornictwo Naftowe I

Gazownictwo SA 256 298 8 859 Qatar Gas Transport Co., Ltd. 76 75 3 037 S-Oil Corp. 292 286 86 500 Thai Oil PCL 215 234 10 129 Tupras Turkiye Petrol Rafinerileri AS 290 273 4 500 Ultrapar Participacoes SA 119 127 95 454 United Tractors Tbk PT 164 202

2 633 2 804 10.9


Financials 81 464 Abu Dhabi Commercial

Bank PJSC $ 194 $ 205 1 082 914 Banco de Chile 155 170 2 207 Banco de Credito e Inversiones 130 150 17 208 Banco Santander Brasil SA 116 209 15 866 Bancolombia SA 187 193 320 975 Bank Negara Indonesia

Persero Tbk PT 146 177 649 454 Bank of China Ltd. 418 386 50 170 Bank of the Philippine Islands 141 120 4 897 Bank Pekao SA 233 198 218 600 Bank Rakyat Indonesia

Persero Tbk PT 232 254 13 884 Barclays Africa Group Ltd. 189 230 36 142 BM&FBovespa SA 231 246 63 164 Chailease Holding Co., Ltd. 133 145 51 933 China Pacific Insurance

Group Co., Ltd. 236 243 18 161 Coronation Fund Managers Ltd. 148 126 1 239 Credicorp., Ltd. 208 262 75 587 Dubai Islamic Bank PJSC 142 154 118 382 Far East Horizon Ltd. 126 136 288 400 First Financial Holding Co., Ltd. 195 206 65 087 Gentera SAB de CV 152 141 255 449 Grupo Aval Acciones y Valores 124 139 42 300 Grupo Financiero Banorte SAB de CV 268 282 34 940 ICICI Bank Ltd. 182 176 12 104 Indiabulls Housing Finance Ltd. 164 156 11 078 Industrial Bank of Korea 151 156 16 417 Investec Ltd. 145 146 27 657 Itau Unibanco Holding SA 405 386 10 850 Liberty Holdings Ltd. 142 118 14 278 Masraf Al Rayan QSC 192 198 66 547 MMI Holdings Ltd. 161 154 40 367 National Bank of Abu Dhabi PJSC 130 147 8 229 Nedbank Group Ltd. 179 192 51 125 Power Finance Corp., Ltd. 121 123 14 000 Powszechny Zaklad Ubezpieczen SA 165 149 3 717 Qatar Islamic Bank SAQ 138 142 39 458 Rand Merchant Investment

Holdings Ltd. 137 154 694 Samsung Fire & Marine

Insurance Co., Ltd. 223 207 37 154 Sanlam Ltd. 201 229 5 778 Shinhan Financial Group Co., Ltd. 272 290

7 212 7 495 29.1Diversified Financials 113 300 AMMB Holdings BHD 190 146 57 941 FirstRand Ltd. 278 302 82 700 Grupo Financiero Santander

Mexico SAB de CV 164 161 29 857 RMB Holdings Ltd. 178 194

810 803 3.1

281


December 31, 2016




Health Care 16 673 Life Healthcare Group

Holdings Ltd. $ 64 $ 54 8 323 Odontoprev SA 39 43

103 97 0.4Industrials 271 900 BTS Group Holdings PCL 90 87 16 610 CCR SA 104 109 52 000 China State Construction

International Holdings Ltd. 111 104 232 800 DMCI Holdings Inc. 88 83 7 917 Grupo Aeroportuario del Pacifico

SAB de CV 82 88 588 Hyundai Glovis Co., Ltd. 106 101 3 392 Industries Qatar QSC 135 148 41 018 Jiangsu Expressway Co., Ltd. 67 70 1 254 KEPCO Plant Service &

Engineering Co., Ltd. 107 75 42 700 MISC BHD 102 94 9 812 TAV Havalimanlari Holding AS 74 52 7 889 The Bidvest Group Ltd. 119 140

1 185 1 151 4.5Information Technology 29 549 Catcher Technology Co., Ltd. 274 275 56 285 Chicony Electronics Co., Ltd. 179 176 59 600 Delta Electronics Thailand PCL 167 182 19 852 HCL Technologies Ltd. 317 325 165 470 Hon Hai Precision Industry Co., Ltd. 547 579 25 971 Infosys Ltd. 527 519 326 000 Lenovo Group Ltd. 269 265 45 291 Novatek Microelectronics Corp. 223 201 89 196 Pegatron Corp. 262 286 17 710 Phison Electronics Corp. 178 188 39 388 Simplo Technology Co., Ltd. 180 152 9 535 Tata Consultancy Services Ltd. 435 446 38 452 Transcend Information Inc. 141 136 77 712 Vanguard International

Semiconductor Corp. 179 182 125 035 WPG Holdings Ltd. 195 198

4 073 4 110 15.9Materials 14 869 Braskem SA 134 210 102 682 Eregli Demir ve Celik Fabrikalari TAS 185 201 117 940 Indocement Tunggal Prakarsa Tbk PT 219 181 7 646 Mondi Ltd. 204 210 88 375 Petkim Petrokimya Holding AS 161 125 12 200 Sasol Ltd. 464 477 215 425 Semen Indonesia Persero Tbk PT 231 197 263 359 Sinopec Shanghai

Petrochemical Co., Ltd. 168 191 14 400 The Siam Cement PCL 275 267

2 041 2 059 8.0


Real Estate 66 000 China Overseas Land &

Investment Ltd. $ 250 $ 234 68 014 China Resources Land Ltd. 209 205 49 846 China Vanke Co., Ltd. 157 153 116 624 Emlak Konut Gayrimenkul

Yatirim Ortakligi AS 137 133 93 153 Fibra Uno Administracion SA de CV 235 193 78 662 Growthpoint Properties Ltd. 175 200 66 196 Highwealth Construction Corp. 127 125 13 807 Hyprop Investments Ltd. 161 159 171 559 Redefine Properties Ltd. 166 188 77 387 Shimao Property Holdings Ltd. 175 136

1 792 1 726 6.7Telecommunication Services 44 500 Advanced Info Service PCL 317 245 42 475 China Mobile Ltd. 620 605 78 246 Chunghwa Telecom Co., Ltd. 326 330 156 600 DiGi Telecommunications Bhd 281 226 75 294 Far EasTone

Telecommunications Co., Ltd. 225 227 114 300 Maxis Bhd 238 204 59 939 Taiwan Mobile Co., Ltd. 264 259 961 712 Telekomunikasi Indonesia

Persero Tbk PT 362 381 61 500 Turk Telekomunikasyon AS 180 124 17 550 Vodacom Group Ltd. 242 262

3 055 2 863 11.1Utilities 55 400 Aboitiz Power Corp. 67 62 86 881 Aguas Andinas SA 66 61 430 100 Energy Development Corp. 71 60 5 158 Engie Brasil Energia SA 83 74 21 100 Glow Energy PCL 66 62 50 368 Guangdong Investment Ltd. 98 89 15 590 Interconexion Electrica SA ESP 66 70 6 786 Transmissora Alianca de Energia

Eletrica SA 56 58

573 536 2.1 TOTAL INTERNATIONAL EQUITIES 25 647 25 671 99.6 Less: Transaction costs (40) – – TOTAL INVESTMENTS $ 25 607 25 671 99.6 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 98 0.4 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 25 769 100.0

282





2016December 31

2015

ASSETSInvestments at fair value $ 25 671 $ 20 082 Cash 125 97 Due from investment dealers 81 –Dividends receivable, interest accrued and other assets 47 42 TOTAL ASSETS 25 924 20 221 LIABILITIESDistributions payable 139 58 Accounts payable and accrued expenses 16 14 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 155 72 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 25 769 $ 20 149


NAV PER UNIT $ 18.41 $ 18.32




INCOME (see note 3 in the generic notes)Dividends $ 1 182 $ 847 Other income (loss) (9) (5)Securities lending revenue (see note 7 in the generic notes) 2 1 Net realized gain (loss) on investments (1 610) (783)Net gain (loss) on foreign currencies and other net assets (51) (41)Change in unrealized gain (loss) on investments 2 282 (2 373)TOTAL INCOME (LOSS) 1 796 (2 354)EXPENSES (see notes – ETF Specific Information)Management fees 149 119 GST/HST 18 16 Transaction costs 95 109 Withholding tax 112 91 TOTAL EXPENSES 374 335 INCREASE (DECREASE) IN NAV $ 1 422 $ (2 689)INCREASE (DECREASE) IN NAV PER UNIT $ 1.10 $ (2.95)

283




For the periods ended December 31 (see note 2 in the generic notes) 2016 2015CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 1 422 $ (2 689)ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – –Net realized loss (gain) on investments 1 610 780 Change in unrealized loss (gain) on investments (2 282) 2 376 (Increase) decrease in accrued receivables (5) (35)Increase (decrease) in accrued payables 2 11 Cost of investments purchased (51 956) (58 338)Proceeds on sales of investments 46 958 40 393NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (4 251) (17 502)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 16 133 17 301 Cash paid on redemption of redeemable units (11 051) – Distributions paid to holders of redeemable units (803) (536)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 4 279 $ 16 765 Net increase (decrease) in cash for the period 28 (737)Cash (bank overdraft), beginning of period 97 834 CASH (BANK OVERDRAFT), END OF PERIOD $ 125 $ 97

Interest received (paid) $ – $ – Dividends received, net of withholding taxes $ 1 065 $ 721


284





Total2016 2015

NAV AT BEGINNING OF PERIOD $ 20 149 $ 6 108 INCREASE (DECREASE) IN NAV 1 422 (2 689)Early redemption fees – –Proceeds from redeemable units issued 16 133 17 301 Reinvestments of distributions to holders of redeemable units – – Redemption of redeemable units (11 051) – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 5 082 17 301 Distributions from net income (879) (571)Distributions from net gains – – Distributions from capital (5) – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (884) (571)NET INCREASE (DECREASE) IN NAV 5 620 14 041 NAV AT END OF PERIOD $ 25 769 $ 20 149


285



December 31, 2016



with exposure to the performance of a diversified portfolio

of high-quality emerging market dividend-paying equity

securities that will provide regular income and that have the







2016December 31

2015

International Equities Financials 32.2 38.4 Information Technology 15.9 7.3 Telecommunication Services 11.1 12.5 Energy 10.9 16.0 Materials 8.0 6.3 Real Estate 6.7 – Industrials 4.5 4.7 Consumer Discretionary 4.3 6.2 Consumer Staples 3.5 5.4 Utilities 2.1 2.7 Health Care 0.4 0.2 Other Net Assets 0.4 0.3 Total 100.0 100.0




CurrencyDecember 31

2016December 31

2015

South African rand 14.8 12.1New Taiwan dollar 14.7 10.3Hong Kong dollar 14.0 15.0Indian rupee 11.0 17.4Indonesian rupiah 6.3 3.8Brazilian real 6.2 7.1South Korean won 5.3 6.3Thailand baht 4.3 3.6Mexican peso 4.0 5.1Turkish new lira 3.7 2.3Malaysian ringgit 3.1 5.8Polish zloty 2.5 2.2Qatari rial 2.2 2.0UAE dirham 2.0 1.5Colombian peso 1.6 –Chilean peso 1.5 2.0

CurrencyDecember 31

2016December 31

2015

Philippine peso 1.5 2.0United States dollar 0.9 0.9Euro 0.5 0.5Total 100.1 99.9














December 31 2016

December 31 2015

MSCI Emerging Markets Total Return Index (CAD) + or - 0.9 + or - 0.9















286



December 31, 2016


















Opening units 1 100 300 Issued number of units 900 800 Reinvested number of units – – Redeemed number of units (600) – Ending number of units 1 400 1 100




December 31 2016

December 31 2015

$ % $ %






December 31 2016

December 31 2015






December 31 2016

December 31 2015

$ % $ %

Gross revenue 3 100 1 100RBC IS (paid) (1) (35) – –Tax withheld – – – –ETF revenue 2 65 1 100




December 31 2016

December 31 2015

RBC Strategic Global Dividend Leaders ETF 3.0 –

287



December 31, 2016




EQUITIESConsumer Discretionary 1 965 Arcelik AS $ 15 $ 16 39 200 Astra International Tbk PT 25 32 9 000 Belle International Holdings Ltd. 7 7 7 000 Cheng Shin Rubber Industry Co., Ltd. 15 18 8 000 Guangzhou Automobile Group Co., Ltd. 10 13 9 000 Haier Electronics Group Co., Ltd. 20 19 271 Hankook Tire Co., Ltd. 15 17 38 Hyundai Department Store Co., Ltd. 5 5 120 Hyundai Mobis Co., Ltd. 35 34 356 Imperial Holdings Ltd. 4 6 1 680 Jollibee Foods Corp. 10 9 1 000 Lojas Renner SA 6 10 23 Lotte Shopping Co., Ltd 6 6 4 500 Matahari Department Store Tbk PT 8 7 472 Mr. Price Group Ltd. 11 7 285 New Oriental Education &

Technology Group Inc. 14 16 900 SACI Falabella 8 10 690 Tata Motors Ltd. 32 32 1 400 Woolworths Holdings Ltd. 9 10

255 274 6.4Consumer Staples 98 AMOREPACIFIC Group 16 14 1 100 Arca Continental SAB de CV 8 8 3 600 Cencosud SA 12 14 7 100 Charoen Pokphand Foods PCL 8 8 27 600 Charoen Pokphand Indonesia Tbk PT 9 8 600 Cia Cervecerias Unidas SA 8 8 20 CJ CheilJedang Corp. 9 8 1 000 Coca-Cola Femsa SAB de CV 9 9 9 000 CP ALL PCL 16 21 1 800 Fomento Economico Mexicano

SAB de CV 23 18 600 Gruma SAB de CV 11 10 3 000 Grupo Bimbo SAB de CV 11 9 1 300 Gudang Garam Tbk PT 8 8 23 200 Hanjaya Mandala Sampoerna Tbk PT 9 9 7 400 Indofood CBP Sukses Makmur TBK PT 6 6 10 900 Indofood Sukses Makmur Tbk PT 8 9 5 900 IOI Corp., Bhd 9 8 25 LG Household & Health Care Ltd. 24 23 1 526 Pick n Pay Stores Ltd. 11 10 422 Pioneer Foods Group Ltd. 6 6 1 400 PPB Group BHD 7 7 1 000 President Chain Store Corp. 10 10 9 500 Sun Art Retail Group Ltd. 8 11 304 Tiger Brands Ltd. 8 12 4 600 Unilever Indonesia Tbk PT 19 18 7 000 Uni-President Enterprises Corp. 16 16


Consumer Staples (cont.) 2 200 Universal Robina Corp. $ 12 $ 10 8 900 Wal-Mart de Mexico SAB de CV 30 21

331 319 7.5Energy 55 100 Adaro Energy Tbk PT 8 9 2 678 China Oilfield Services Ltd. 3 3 52 000 China Petroleum & Chemical Corp. 39 50 6 000 China Shenhua Energy Co., Ltd. 12 15 24 000 CNOOC Ltd. 41 40 500 Cosan SA Industria e Comercio 7 8 1 093 Empresas COPEC SA 14 14 8 000 Kunlun Energy Co., Ltd. 8 8 206 MOL Hungarian Oil & Gas PLC 17 19 43 000 PetroChina Co., Ltd. 35 43 11 332 Petroleo Brasileiro SA 37 70 665 Polski Koncern Naftowy Orlen SA 16 18 4 800 PTT Exploration & Production PCL 15 17 700 Qatar Gas Transport Co., Ltd. 6 6 108 SK Innovation Co., Ltd. 18 18 3 200 Thai Oil PCL 8 9 8 000 Yanzhou Coal Mining Co., Ltd. 8 7

292 354 8.3Financials 5 300 Abu Dhabi Commercial Bank PJSC 11 13 37 000 Agricultural Bank of China Ltd. 19 20 4 500 Akbank TAS 15 13 540 Ayala Corp. 11 11 1 600 Banco do Brasil SA 7 19 1 200 Bancolombia SA 11 15 16 200 Bank Mandiri Persero Tbk PT 14 19 66 000 Bank of China Ltd. 37 39 17 300 Bank Rakyat Indonesia Persero Tbk PT 16 20 1 000 Barclays Africa Group Ltd. 11 17 4 200 BDO Unibank Inc. 12 13 11 000 Cathay Financial Holding Co., Ltd. 21 22 3 000 Chailease Holding Co., Ltd. 6 7 16 000 Chang Hwa Commercial Bank Ltd. 11 11 51 000 China Construction Bank Corp. 45 53 7 000 China Galaxy Securities Co., Ltd. 9 8 6 500 China Merchants Bank Co., Ltd. 18 20 7 900 CIMB Group Holdings BHD 11 11 2 700 Compartamos SAB de CV 6 6 106 Credicorp Ltd. 13 22 27 000 CTBC Financial Holding Co., Ltd. 20 20 724 DGB Financial Group Inc. 8 8 142 Dongbu Insurance Co., Ltd. 11 10 19 800 E.Sun Financial Holding Co., Ltd. 13 15 6 000 Far East Horizon Ltd. 7 7 20 000 First Financial Holding Co., Ltd. 14 14 9 000 Fubon Financial Holding Co., Ltd. 18 19 2 800 GF Securities Co., Ltd. 8 8 3 500 Grupo Financiero Banorte SAB de CV 22 23

288


December 31, 2016



Financials (cont.) 205 GT Capital Holdings Inc. $ 9 $ 7 5 600 Haitong Securities Co., Ltd. 14 13 476 Hana Financial Group Inc. 13 17 2 200 Hong Leong Bank BHD 9 9 19 116 Hua Nan Financial Holdings Co., Ltd. 11 13 196 Hyundai Marine & Fire

Insurance Co., Ltd. 7 7 53 000 Industrial & Commercial

Bank of China Ltd. 41 43 704 Industrial Bank of Korea 11 10 2 777 Itau Unibanco Holding SA 24 39 5 880 Itausa - Investimentos Itau SA 13 20 3 000 Kasikornbank PCL 19 20 200 Komercni Banka AS 11 9 12 600 Krung Thai Bank PCL 9 8 6 500 Malayan Banking Bhd 18 16 947 Masraf Al Rayan QSC 12 13 3 625 MMI Holdings Ltd. 8 8 532 Nedbank Group Ltd. 11 12 438 OTP Bank PLC 14 17 8 000 PICC Property & Casualty Co., Ltd. 20 17 4 500 Ping An Insurance Group Co.

of China Ltd. 29 30 1 900 Powszechna Kasa Oszczednosci

Bank Polski SA 15 17 1 288 Powszechny Zaklad Ubezpieczen SA 11 14 219 Qatar Islamic Bank SAQ 9 8 2 700 Rand Merchant Investment

Holdings Ltd. 9 11 51 Samsung Fire & Marine

Insurance Co., Ltd. 16 15 2 582 Sanlam Ltd. 13 16 400 Shinhan Financial Group Co., Ltd. 18 20 3 300 Siam Commercial Bank PCL 15 19 30 450 SinoPac Financial Holdings Co., Ltd. 11 12 1 703 Standard Bank Group Ltd. 24 25 21 400 Taiwan Cooperative Financial

Holding Co., Ltd. 12 13 4 500 Turkiye Garanti Bankasi AS 15 13 4 933 Turkiye Is Bankasi 10 10 810 Woori Bank 8 11

914 1 015 23.7Diversified Financials 4 400 FirstRand Ltd. 16 23 5 300 Grupo Financiero Santander

Mexico SAB de CV 10 10 2 200 Haci Omer Sabanci Holding AS 8 8 1 800 RMB Holdings Ltd. 8 12

42 53 1.2Health Care 623 Aspen Pharmacare Holdings Ltd. 21 18 6 500 Bangkok Dusit Medical Services PCL 6 6 4 000 China Medical System Holdings Ltd. 7 8 10 000 CSPC Pharmaceutical Group Ltd. 13 14 4 400 IHH Healthcare Bhd 10 8 64 400 Kalbe Farma TBK PT 10 10


Health Care (cont.) 1 652 Netcare Ltd. $ 5 $ 5 382 Richter Gedeon Nyrt 10 11 1 400 Shanghai Pharmaceuticals

Holding Co., Ltd. 5 4 13 000 Sino Biopharmaceutical Ltd. 13 12 1 200 Sinopharm Group Co., Ltd. 6 7 33 Yuhan Corp. 8 7

114 110 2.6Industrials 700 Airports of Thailand PCL 10 10 4 000 Beijing Capital International

Airport Co., Ltd. 5 5 669 Bidvest Group Ltd. 16 11 8 000 China Railway Group Ltd. 7 9 9 000 CRRC Corp Ltd. 11 11 69 Daelim Industrial Co., Ltd. 7 7 342 DP World Ltd. 8 8 5 200 Gamuda BHD 8 7 1 600 Grupo Carso SAB de CV 8 9 134 Hyundai Development

Co-Engineering & Construction 6 7 200 Hyundai Engineering &

Construction Co., Ltd. 7 10 34 Hyundai Glovis Co., Ltd. 7 6 66 Hyundai Heavy Industries Co., Ltd. 11 11 6 600 IJM Corp BHD 7 6 300 Industries Qatar QSC 11 13 5 710 JG Summit Holdings Inc. 11 10 14 KCC Corp. 7 6 1 700 KOC Holding AS 9 9 983 Latam Airlines Group SA 9 11 174 LG Corp. 12 12 4 400 MISC BHD 11 10 500 Promotora y Operadora de

Infraestructura SAB de CV 8 6 43 S-1 Corp. 5 4 2 000 Shanghai Industrial Holdings Ltd. 8 7 4 100 Sime Darby BHD 11 10 450 SM Investments Corp. 7 8 1 400 Weg SA 9 9 3 000 Weichai Power Co., Ltd. 6 6

242 238 5.5Information Technology 17 000 Advanced Semiconductor

Engineering Inc. 25 23 1 537 Alibaba Group Holding Ltd. 168 182 3 000 Asustek Computer Inc. 33 33 562 Baidu Inc. 125 124 4 800 Cielo SA 57 55 5 040 Foxconn Technology Co., Ltd. 15 18 19 600 Hon Hai Precision Industry Co., Ltd. 58 69 16 000 Inventec Corp. 16 15 8 000 Kingsoft Corp., Ltd. 24 22 877 LG Display Co., Ltd. 25 31 2 100 MediaTek Inc. 19 19 257 NetEase Inc. 62 74


289


December 31, 2016



Information Technology (cont.) 3 000 Novatek Microelectronics Corp. $ 13 $ 13 4 000 Powertech Technology Inc. 11 14 81 Samsung Electronics Co., Ltd. 117 162 891 SK Hynix Inc. 42 44 14 000 Taiwan Semiconductor

Manufacturing Co., Ltd. 84 106 9 000 Travelsky Technology Ltd. 19 25 10 000 WPG Holdings Ltd. 16 16

929 1 045 24.4Insurance 19 000 Peoples Insurance Co.,

Group of China Ltd. 11 10

11 10 0.2Materials 14 000 Aluminum Corp of China Ltd. 7 8 649 AngloGold Ashanti Ltd. 8 10 2 000 Anhui Conch Cement Co., Ltd. 6 7 5 000 Asia Cement Corp. 5 5 900 Cementos Argos SA 4 5 19 000 China Steel Corp. 19 19 2 100 Cia Siderurgica Nacional SA 9 9 2 366 Empresas CMPC SA 6 6 4 946 Eregli Demir ve Celik Fabrikalari TAS 9 10 5 000 Formosa Chemicals & Fibre Corp. 14 20 6 000 Formosa Plastics Corp. 18 23 2 300 Gerdau SA 5 10 1 126 Gold Fields Ltd. 5 5 600 Grupo Argos SA 5 5 5 700 Grupo Mexico SAB de CV 21 21 61 Hyosung Corp. 10 10 5 900 Indorama Ventures PCL 7 7 230 Industrias Penoles SAB de CV 8 6 200 Mondi Ltd. 5 5 4 000 Nine Dragons Paper Holdings Ltd. 5 5 86 POSCO 20 26 5 300 PTT Global Chemical PCL 12 13 935 Sappi Ltd. 6 8 500 Siam Cement PCL 8 9 14 000 Sinopec Shanghai

Petrochemical Co., Ltd. 8 10 300 Sociedad Quimica y Minera de

Chile SA, Preferred., Series B 8 11 5 000 Taiwan Cement Corp. 5 7

243 280 6.5Real Estate 7 000 Aldar Properties PJSC 5 7 13 500 Ayala Land Inc. 13 12 1 400 BR Malls Participacoes SA 6 7 4 000 China Resources Land Ltd. 14 12 3 100 China Vanke Co., Ltd. 11 9 4 800 Emaar Properties PJSC 8 12 2 900 Emlak Konut Gayrimenkul

Yatirim Ortakligi AS 3 3 1 768 Ezdan Holding Group QSC 10 10 2 200 Fibra Uno Administracion SA de CV 6 5


Real Estate (cont.) 2 500 Growthpoint Properties Ltd. $ 5 $ 6 400 Hyprop Investments Ltd. 3 5 4 000 Longfor Properties Co., Ltd. 8 7 5 000 Redefine Properties Ltd. 4 5 4 000 Shimao Property Holdings Ltd. 8 7

104 107 2.5Telecommunication Services 5 000 China Mobile Ltd. 75 70 38 000 China Telecom Corp., Ltd. 25 24 13 000 China Unicom Hong Kong Ltd. 19 20 7 000 Chunghwa Telecom Co., Ltd. 32 30 3 900 Emirates Telecommunications

Group Co., PJSC 24 27 1 106 Hellenic Telecommunications

Organization SA 13 14 1 020 LG Uplus Corp. 14 13 7 800 Maxis Bhd 14 14 400 Ooredoo QSC 13 15 72 SK Telecom Co., Ltd. 19 18 1 300 Telefonica Brasil SA 20 24 5 900 Telekom Malaysia BHD 13 10 88 000 Telekomunikasi Indonesia

Persero Tbk PT 29 35 1 300 Vodacom Group Ltd. 18 19

328 333 7.8Utilities 6 981 Aguas Andinas SA 5 5 600 Centrais Eletricas Brasileiras SA 6 6 330 CEZ AS 7 7 7 000 China Longyuan Power

Group Corp., Ltd. 7 7 4 000 China Resources Power

Holdings Co., Ltd. 9 9 800 Cia de Saneamento Basico do

Estado de Sao Paulo 5 9 24 100 Colbun SA 8 6 600 CPFL Energia SA 6 6 6 900 Empresa Nacional de Electricidad SA 12 6 – Endesa Americas SA – – 48 876 Enel Chile SA 6 6 64 390 Enersis Americas SA 18 14 416 Engie Brasil Energia SA 7 6 200 Equatorial Energia SA 3 4 300 Korea Electric Power Corp. 19 16 78 Qatar Electricity & Water Co., QSC 6 7 3 500 Tenaga Nasional BHD 15 15 14 400 YTL Corp., Bhd 7 7

146 136 3.2TOTAL EQUITIES 3 951 4 274 99.8Less: Transaction costs (5) – –TOTAL INVESTMENTS $ 3 946 4 274 99.8 OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 11 0.2 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 4 285 100.0


290






2016

ASSETSInvestments at fair value $ 4 274 Cash 8 Due from investment dealers 26 Dividends receivable, interest accrued and other assets 11 TOTAL ASSETS 4 319 LIABILITIESDistributions payable 30 Accounts payable and accrued expenses 4 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 34 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 4 285





INCOME (see note 3 in the generic notes)Dividends $ 141 Other income (loss) (1)Securities lending revenue (see note 7 in the generic notes) 1 Net realized gain (loss) on investments 21 Net gain (loss) on foreign currencies and other net assets (53)Change in unrealized gain (loss) on investments 328 TOTAL INCOME (LOSS) 437 EXPENSES (see notes – ETF Specific Information)Management fees 26 GST/HST 3 Transaction costs 18 Withholding tax 13 TOTAL EXPENSES 60 INCREASE (DECREASE) IN NAV $ 377 INCREASE (DECREASE) IN NAV PER UNIT $ 1.92

291




For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 377 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments (21)Change in unrealized loss (gain) on investments (328)(Increase) decrease in accrued receivables (11)Increase (decrease) in accrued payables 4 Cost of investments purchased (11 250)Proceeds on sales of investments 7 299 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3 930)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 4 000 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (62)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 3 938 Net increase (decrease) in cash for the period 8 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 8



292





Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 377 Early redemption fees – Proceeds from redeemable units issued 4 000 Reinvestments of distributions to holders of redeemable units – Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 4 000 Distributions from net income (88)Distributions from net gains – Distributions from capital (4)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (92)NET INCREASE (DECREASE) IN NAV 4 285 NAV AT END OF PERIOD $ 4 285


293



December 31, 2016




portfolio of high-quality emerging market equity securities

that have the potential for long-term capital growth.







2016

Equities Financials 25.1 Information Technology 24.4 Energy 8.3 Telecommunication Services 7.8 Consumer Staples 7.5 Materials 6.5 Consumer Discretionary 6.4 Industrials 5.5 Utilities 3.2 Health Care 2.6 Real Estate 2.5Other Net Assets 0.2Total 100.0




CurrencyDecember 31

2016

Hong Kong dollar 19.1New Taiwan dollar 14.8South Korean won 14.3United States dollar 10.7Brazilian real 7.3South African rand 6.4Indonesian rupiah 4.4Mexican peso 3.8Thailand baht 3.4Malaysian ringgit 3.2Chilean peso 2.6Turkish new lira 1.9Philippine peso 1.8Qatari rial 1.7

CurrencyDecember 31

2016

UAE dirham 1.4Polish zloty 1.1Hungarian forint 1.1Colombian peso 0.6Czech koruna 0.4Euro 0.3Total 100.3









broad-based index (noted below) on the ETF’s net assets, using

an 11-month historical correlation of data of the ETF’s return

and the index, with all other factors kept constant, as at:

December 31 2016

MSCI Emerging Markets Total Return Index (CAD) + or - 1.0






December 31, 2016.





and Level 3.







294



December 31, 2016

















December 31 2016

$ %

Total transaction costs 18 100Related-party brokerage commissions* – –Commission arrangements† – –





December 31 2016






December 31 2016

$ %

Gross revenue 1 100 RBC IS (paid) – –Tax withheld – –ETF revenue 1 100




December 31 2016

RBC Strategic Global Equity Leaders ETF 4.7

295



December 31, 2016




ETF UNITS 40 045 RBC Quant U.S. Dividend

Leaders ETF* $ 1 131 $ 1 199 54 174 RBC Quant Canadian Dividend

Leaders ETF* 983 1 118 34 399 RBC Quant EAFE Dividend

Leaders ETF* 770 779 17 141 RBC Quant Emerging Markets

Dividend Leaders ETF* 304 315



296





2016

ASSETSInvestments at fair value $ 3 411 Cash 5 Subscriptions receivable 1 145 Dividends receivable, interest accrued and other assets 6 TOTAL ASSETS 4 567 LIABILITIESDue to investment dealers 1 143 Distributions payable 7 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 1 150 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 3 417






INCOME (see note 3 in the generic notes)Dividends $ 68 Securities lending revenue (see note 7 in the generic notes) 2 Net realized gain (loss) on investments 47 Change in unrealized gain (loss) on investments 223 TOTAL INCOME (LOSS) 340 EXPENSES (see notes – ETF Specific Information)Management fees 2 TOTAL EXPENSES 2 INCREASE (DECREASE) IN NAV $ 338 INCREASE (DECREASE) IN NAV PER UNIT $ 3.45

297




For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 338 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments (47)Change in unrealized loss (gain) on investments (223)(Increase) decrease in accrued receivables (6)Increase (decrease) in accrued payables – Cost of investments purchased (2 466)Proceeds on sales of investments 468 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1 936)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 1 999 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (58)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 1 941 Net increase (decrease) in cash for the period 5 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 5



298





Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 338 Early redemption fees – Proceeds from redeemable units issued 3 144 Reinvestments of distributions to holders of redeemable units 50 Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 3 194 Distributions from net income (64)Distributions from net gains (50)Distributions from capital (1)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (115)NET INCREASE (DECREASE) IN NAV 3 417 NAV AT END OF PERIOD $ 3 417


299



December 31, 2016




in other mutual funds managed by RBC GAM or an affiliate,

to the performance of a diversified portfolio of high-quality

global dividend-paying equity securities that will provide


capital growth.







2016

Equities Financials 23.3 Energy 13.5 Real Estate 12.2 Information Technology 7.7 Telecommunication Services 7.5 Industrials 7.5 Utilities 6.7 Health Care 6.7 Consumer Staples 5.1 Consumer Discretionary 5.0 Materials 4.3Other Net Assets 0.5Total 100.0



strengthened or weakened by 1% in relation to all other










December 31 2016

S&P/TSX Capped Composite Total Return Index + or - 0.8






December 31, 2016.





and Level 3.










300



December 31, 2016









December 31 2016

NAV Ownership

RBC Quant Canadian Dividend Leaders ETF 35.1 1.1RBC Quant EAFE Dividend Leaders ETF 32.7 0.4RBC Quant Emerging Markets Dividend Leaders ETF 22.8 3.0RBC Quant U.S. Dividend Leaders ETF 9.2 0.1



December 31, 2016.








Opening units – Issued number of units 150 Reinvested number of units 3 Units consolidated* (3)Redeemed number of units – Ending number of units 150




December 31 2016

Fair value of securities loaned –Fair value of collateral received –





December 31 2016

$ %

Gross revenue 3 100 RBC IS (paid) (1) (35)Tax withheld – – ETF revenue 2 65

301



December 31, 2016




ETF UNITS 36 729 RBC Quant Canadian Equity

Leaders ETF* $ 584 $ 741 26 569 RBC Quant EAFE Equity

Leaders ETF* 521 524 9 486 RBC Quant Emerging Markets

Equity Leaders ETF* 191 203 33 921 RBC Quant U.S.

Equity Leaders ETF* 738 801



302






2016

ASSETSInvestments at fair value $ 2 269 Cash 6 Dividends receivable, interest accrued and other assets 10 TOTAL ASSETS 2 285 LIABILITIESDistributions payable 10 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 10 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 2 275





INCOME (see note 3 in the generic notes)Dividends $ 42 Net realized gain (loss) on investments 40 Change in unrealized gain (loss) on investments 235 TOTAL INCOME (LOSS) 317 EXPENSES (see notes – ETF Specific Information)Management fees 2 Transaction costs 1 TOTAL EXPENSES 3 INCREASE (DECREASE) IN NAV $ 314 INCREASE (DECREASE) IN NAV PER UNIT $ 3.20

303





For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 314 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments (40)Change in unrealized loss (gain) on investments (235)(Increase) decrease in accrued receivables (10)Increase (decrease) in accrued payables – Cost of investments purchased (2 486)Proceeds on sales of investments 492 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1 965)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 2 000 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (29)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 1 971 Net increase (decrease) in cash for the period 6 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 6


304






Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 314 Early redemption fees – Proceeds from redeemable units issued 2 000 Reinvestments of distributions to holders of redeemable units 45 Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 2 045 Distributions from net income (39)Distributions from net gains (45)Distributions from capital – TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (84)NET INCREASE (DECREASE) IN NAV 2 275 NAV AT END OF PERIOD $ 2 275

305



December 31, 2016




with broad exposure, either directly or indirectly through

investment in other mutual funds managed by RBC GAM or

an affiliate, to the performance of a diversified portfolio of

high-quality global equity securities that have the potential

for long-term capital growth.







2016

Equities Financials 23.0 Information Technology 11.6 Industrials 10.9 Energy 9.9 Consumer Discretionary 8.5 Consumer Staples 7.7 Materials 7.4 Health Care 6.7 Telecommunication Services 5.2 Utilities 4.9 Real Estate 3.4Other Net Assets 0.8Total 100.0



strengthened or weakened by 1% in relation to all other










December 31 2016

S&P/TSX Capped Composite Total Return Index + or - 0.8






December 31, 2016.





and Level 3.









306



December 31, 2016








December 31 2016

NAV Ownership

RBC Quant Canadian Equity Leaders ETF 32.6 8.2RBC Quant EAFE Equity Leaders ETF 23.0 3.5RBC Quant Emerging Markets Equity Leaders ETF 8.9 4.7RBC Quant U.S. Equity Leaders ETF 35.2 3.1



December 31, 2016.








Opening units – Issued number of units 100 Reinvested number of units 2Units consolidated* (2)Redeemed number of units – Ending number of units 100






December 31 2016

$ %




307



December 31, 2016




GLOBAL EQUITIESConsumer Discretionary 7 901 Eutelsat Communications SA $ 206 $ 205 3 074 Shaw Communications Inc. 81 83

287 288 3.2Energy 13 319 Inter Pipeline Ltd. 370 395

370 395 4.3Industrials 3 600 Grupo Aeroportuario del

Pacifico SAB de CV 42 40

42 40 0.4Telecommunication Services 8 839 AT&T Inc. 467 504 2 745 BCE Inc. 163 159 910 Globe Telecom Inc. 42 37 2 632 Inmarsat PLC 33 33 3 330 Millicom International Cellular SA 203 191 19 049 MTN Group Ltd. 214 236 6 200 Nippon Telegraph &

Telephone Corp. 349 350 300 NTT DoCoMo Inc. 9 9 8 403 Proximus 322 325 6 900 Rogers Communications Inc. 370 357 200 Swisscom AG 121 120 4 128 Telefonica SA 52 52 47 931 Telkom SA SOC Ltd. 303 348 7 970 Verizon Communications Inc. 538 571

3 186 3 292 36.2Utilities 10 808 AES Corp. 174 168 5 870 Ameren Corp. 386 412 1 089 American Electric Power Co., Inc. 90 92 91 219 AusNet Services 137 140 103 876 Centrica PLC 392 403 670 CEZ AS 15 15 15 000 Chubu Electric Power Co., Inc. 285 282 1 095 DTE Energy Co. 136 145 3 729 Entergy Corp. 365 367 604 Eversource Energy 43 45 2 488 Exelon Corp. 112 118 8 770 Fortis Inc. 361 364 28 700 Glow Energy PCL 84 85 9 767 Great Plains Energy Inc. 351 358 5 948 Hawaiian Electric Industries Inc. 242 264 2 300 Just Energy Group Inc. 16 17 23 787 National Grid PLC 401 375 17 000 Osaka Gas Co., Ltd. 89 88 2 052 Pinnacle West Capital Corp. 205 215 556 SCANA Corp. 53 55


Utilities (cont.) 2 240 SSE PLC $ 58 $ 58 9 000 Tohoku Electric Power Co., Inc. 149 153 1 753 TransAlta Renewables Inc. 25 25 5 398 Vectren Corp. 355 378 7 050 Xcel Energy Inc. 378 385 104 000 YTL Corp. Bhd 53 48

4 955 5 055 55.6TOTAL GLOBAL EQUITIES 8 840 9 070 99.7Less: Transaction costs (10) – –TOTAL INVESTMENTS $ 8 830 9 070 99.7OTHER NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 13 0.3NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS $ 9 083 100.0

308






2016

ASSETSInvestments at fair value $ 9 070 Cash 27 Due from investment dealers 6 Dividends receivable, interest accrued and other assets 14 TOTAL ASSETS 9 117 LIABILITIESDistributions payable 29 Accounts payable and accrued expenses 5 TOTAL LIABILITIES EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 34 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (“NAV”) $ 9 083





INCOME (see note 3 in the generic notes)Dividends $ 67 Net realized gain (loss) on investments (19)Net gain (loss) on foreign currencies and other net assets (1)Change in unrealized gain (loss) on investments 240 TOTAL INCOME (LOSS) 287 EXPENSES (see notes – ETF Specific Information)Management fees 9 GST/HST 1 Transaction costs 12 Withholding tax 9 TOTAL EXPENSES 31 INCREASE (DECREASE) IN NAV $ 256 INCREASE (DECREASE) IN NAV PER UNIT $ 1.18

309





For the period ended December 31 (see note 2 in the generic notes) 2016CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in NAV $ 256 ADJUSTMENTS TO RECONCILE NET CASH PROVIDED BY (USED IN) OPERATIONSInterest for distribution purposes – Net realized loss (gain) on investments 19 Change in unrealized loss (gain) on investments (240)(Increase) decrease in accrued receivables (14)Increase (decrease) in accrued payables 5 Cost of investments purchased (17 662)Proceeds on sales of investments 8 807 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (8 829)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 8 893 Cash paid on redemption of redeemable units – Distributions paid to holders of redeemable units (37)NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ 8 856 Net increase (decrease) in cash for the period 27 Cash (bank overdraft), beginning of period – CASH (BANK OVERDRAFT), END OF PERIOD $ 27


310






Total2016

NAV AT BEGINNING OF PERIOD $ – INCREASE (DECREASE) IN NAV 256 Early redemption fees – Proceeds from redeemable units issued 8 893 Reinvestments of distributions to holders of redeemable units – Redemption of redeemable units – NET INCREASE (DECREASE) FROM REDEEMABLE UNIT TRANSACTIONS 8 893 Distributions from net income (34)Distributions from net gains – Distributions from capital (32)TOTAL DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS (66)NET INCREASE (DECREASE) IN NAV 9 083 NAV AT END OF PERIOD $ 9 083

311



December 31, 2016




unitholders with exposure to the performance of a

diversified global portfolio of high-quality equity securities

of companies that own or operate infrastructure assets that

will provide regular income and that have the potential for

long-term capital growth.







2016

International Equities Utilities 55.6 Telecommunication Services 36.2 Energy 4.3 Consumer Discretionary 3.2 Industrials 0.4 Other Net Assets 0.3 Total 100.0




CurrencyDecember 31

2016

United States dollar 45.0Japanese yen 9.7Pound sterling 9.6Euro 6.4South African rand 6.4Swedish krona 2.1Australian dollar 1.5Swiss franc 1.3Thailand baht 0.9Malaysian ringgit 0.5Mexican peso 0.4Philippine peso 0.4Czech koruna 0.2Total 84.4








Due to the fact that the ETF has been in existence for

less than six months, the impact on net assets of the ETF

using the historical correlation between the ETF’s return

and a broad-based index is not disclosed because there

is insufficient data and any resulting calculation could be

materially misleading.



December 31, 2016.





and Level 3.










312



December 31, 2016












December 31 2016

$ %

Total transaction costs 12 100Related-party brokerage commissions* – –Commission arrangements† – –





December 31 2016



313

GENERIC NOTES TO FINANCIAL STATEMENTS

December 31, 2016

(also see ETF Specific Information)

1. The ETFs

The RBC ETFs, the exchange-traded funds (“ETF” or “ETFs”),

are open-ended mutual fund trusts governed by the laws

of the Province of Ontario and governed by a Master

Declaration of Trust. RBC GAM is the manager, trustee and

portfolio manager of the ETFs and its head office is located

at 155 Wellington Street West, 22nd Floor, Toronto, Ontario.

These financial statements were approved for issuance by the

Board of Directors of RBC GAM on March 8, 2017.

The units of the ETFs are listed on the Toronto Stock

Exchange (“TSX”). Investors may purchase or sell units on the

TSX in the same way as other securities listed on the TSX.

ETFTSX Ticker Symbol Index*

RBC 1-5 Year Laddered Corporate Bond ETF

RBO Not applicable

RBC 1-5 Year Laddered Canadian Bond ETF

RLB Not applicable

RBC Target 2017 Corporate Bond Index ETF

RQE FTSE TMX Canada 2017 Maturity Corporate Bond Index


RQF FTSE TMX Canada 2018 Maturity Corporate Bond Index


RQG FTSE TMX Canada 2019 Maturity Corporate Bond Index


RQH FTSE TMX Canada 2020 Maturity Corporate Bond Index


RQI FTSE TMX Canada 2021 Maturity Corporate Bond Index


RQJ FTSE TMX Canada 2022 Maturity Corporate Bond Index


RQK FTSE TMX Canada 2023 Maturity Corporate Bond Index

RBC Canadian Preferred Share ETF

RPF Not applicable

RBC Quant Canadian Dividend Leaders ETF

RCD Not applicable

RBC Quant Canadian Equity Leaders ETF

RCE Not applicable

RBC Quant U.S. Dividend Leaders ETF

RUD RUD.U

Not applicable

ETFTSX Ticker Symbol Index*

RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF

RHU Not applicable

RBC Quant U.S. Equity Leaders ETF

RUE RUE.U

Not applicable

RBC Quant U.S. Equity Leaders (CAD Hedged) ETF

RHS Not applicable

RBC Quant European Dividend Leaders ETF

RPD RPD.U

Not applicable

RBC Quant European Dividend Leaders (CAD Hedged) ETF

RHP Not applicable

RBC Quant EAFE Dividend Leaders ETF

RID RID.U

Not applicable

RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF

RHI Not applicable

RBC Quant EAFE Equity Leaders ETF

RIE RIE.U

Not applicable

RBC Quant EAFE Equity Leaders (CAD Hedged) ETF

RHF Not applicable

RBC Quant Emerging Markets Dividend Leaders ETF

RXD RXD.U

Not applicable

RBC Quant Emerging Markets Equity Leaders ETF

RXE RXE.U

Not applicable

RBC Strategic Global Dividend Leaders ETF

RLD Not applicable

RBC Strategic Global Equity Leaders ETF

RLE Not applicable

RBC Quant Global Infrastructure Leaders ETF

RIG RIG.U

Not applicable

* The indices are trademarks of FTSE TMX Debt Capital Markets Inc. (“FTDCM”). “TMX” is a trademark of TSX Inc. (“TSX”) and is used under licence. “FTSE” is a trademark of the London Stock Exchange Group companies (the “Exchange”) and is used by FTDCM under licence. These marks have been licensed for use for certain purposes to RBC GAM. The ETFs are not sponsored, endorsed, sold or promoted by FTDCM, FTSE International Limited, the Exchange or TSX (together, the “Licensor Parties”). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the indices and/or the figures at which the said indices stand at any particular time on any particular day or otherwise. The indices are compiled and calculated by FTDCM and all copyright in the values of the indices and their constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the indices and the Licensor Parties shall not be under any obligation to advise any person of any error therein.

2. Financial year/period

The information provided in these financial statements

and notes thereto is for the 12-month periods ended or as at

December 31, 2016 and 2015. In the year an ETF or a series

is established, “period” represents the period from inception

to December 31 of that fiscal year.

314


December 31, 2016


3. Summary of significant accounting policies

These financial statements have been prepared in

compliance with International Financial Reporting Standards

(“IFRS”), which include estimates and assumptions made by

management that may affect the reported amounts of assets

(primarily valuation of investments), liabilities, income and

expenses during the reported periods. Actual results may

differ from estimates. The significant accounting policies of

the ETFs, which are investment entities, are as follows:

Classification of Financial Assets and Liabilities The ETFs’

financial assets and financial liabilities, other than derivatives,

are designated at fair value through profit or loss at inception,

as those financial assets and liabilities are managed together

and their performance evaluated on a fair value basis

in accordance with the ETFs’ documented investment

strategy. Derivatives are classified as held for trading and

measured at fair value through profit or loss. Redemption

units are measured at their respective redemption values.

All other assets and liabilities are measured at amortized

cost. Unrealized gains (losses) arising on derivatives are

shown on the respective ETF’s Statements of Financial

Position and such amounts are included in the Statements of

Comprehensive Income in “Change in unrealized gain (loss)

on investments,” where applicable. Realized gains arising on

derivatives during a period are included in the Statements

of Comprehensive Income in “Other derivatives,” where

applicable. Refer to note 3 for net gains (losses) on financial

instruments by category.

Classification of Redeemable Units The ETFs have multiple

features across the series of the ETFs. Consequently, the

ETFs’ outstanding redeemable units are classified as

financial liabilities in accordance with the requirements

of IAS 32 Financial Instruments: Presentation.

Unconsolidated Structured Entities The ETFs may invest

in other Funds managed by the manager or an affiliate of

the manager (“Investee Funds”). The Investee Funds are

determined to be unconsolidated structured entities, as

decision making in the Investee Fund is not governed by

the voting rights or other similar rights held by the ETF. The

investments in Investee Funds are subject to the terms and

conditions of the offering documentation of the respective

Investee Funds and are susceptible to market price risk arising

from uncertainties about future values of those Investee

Funds. The Investee Funds’ objectives are generally to achieve

long-term capital appreciation and/or current income by

investing in a portfolio of securities and other funds in

line with each of their documented investment strategies.

The Investee Funds apply various investment strategies to

accomplish their respective investment objectives.

The Investee Funds finance their operations by issuing

redeemable units which are puttable at the unitholder’s

option, and entitle the unitholder to a proportional stake in

the respective Fund’s net assets.

The ETFs do not consolidate their investment in underlying

funds but account for these investments at fair value. The

manager has determined that the ETFs are investment

entities in accordance with IFRS 10 Consolidated Financial

Statements, since the ETFs meet the following criteria:

(i) The ETFs obtain capital from one or more investors for

the purpose of providing those investors with investment

management services,

(ii) The ETFs commit to their investors that their business

purpose is to invest funds solely for the returns from

capital appreciation, investment income or both and

(iii) The ETFs measure and evaluate the performance of

substantially all of their investments on a fair value basis.

Therefore, the fair value of the investment in the Investee

Fund is included in the Schedule of Investment Portfolio

and included in “Investments at fair value” in the ETF’s

Statements of Financial Position. The change in fair value

of the investment held in the Investee Fund is included in

“Change in unrealized gain (loss) on investments” in the

Statements of Comprehensive Income.

Determination of Fair Value The fair value of a financial

instrument is the amount at which the financial instrument

could be exchanged in an arm’s-length transaction between

knowledgeable and willing parties under no compulsion to

act. In determining fair value, a three-tier hierarchy based on

inputs is used to value the ETFs’ financial instruments. The

hierarchy of inputs is summarized below:

Level 1 – quoted prices (unadjusted) in active markets for

identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1

that are observable for the asset or liability, either directly

(i.e., as prices) or indirectly (i.e., derived from prices),

including broker quotes, vendor prices and vendor fair value

factors; and

Level 3 – inputs for the asset or liability that are not based on

observable market data (unobservable inputs).

315


December 31, 2016


Changes in valuation methods may result in transfers into or

out of an investment’s assigned level.

Investments are recorded at fair value, which is determined

as follows:

Equities – Common shares, preferred shares and exchange-

traded funds are valued at the closing price recorded by

the security exchange on which the security is principally

traded. In circumstances where the closing price is not within

the bid-ask spread, management will determine the points

within the bid-ask spread that are most representative of the

fair value.

Fixed-Income and Debt Securities – Bonds are valued at the

closing price quoted by major dealers or independent pricing

vendors in such securities.

Forward Contracts – Forward contracts are valued at the gain

or loss that would arise as a result of closing the position

at the valuation date. Any unrealized gain or loss at the

close of business on each valuation date is recorded as

“Change in unrealized gain (loss) on investments” in the

Statements of Comprehensive Income. The receivable/

payable on forward contracts is recorded separately in the

Statements of Financial Position. Realized gain (loss) on

foreign exchange contracts is included in “Net gain (loss) on

foreign currencies and other net assets” in the Statements of


Fair Valuation of Investments – The ETFs have procedures to

determine the fair value of securities and other financial

instruments for which market prices are not readily available

or which may not be reliably priced. Under these fair

valuation procedures, the ETFs primarily employ a market-

based approach, which may use related or comparable assets

or liabilities, recent transactions, market multiples, book

values and other relevant information for the investment to

determine its fair value. The ETFs may also use an income-

based valuation approach in which the anticipated future

cash flows of the investment are discounted to calculate

fair value. Discounts may also be applied due to the

nature or duration of any restrictions on the disposition

of the investments, but only if they arise as a feature of

the instrument itself. Due to the inherent uncertainty of

valuations of such investments, the fair values may differ

significantly from the values that would have been used had

an active market existed.

All security valuation techniques are periodically reviewed

by the Valuation Committee (“VC”) of the manager and are

approved by the manager. The VC provides oversight of the

ETFs’ valuation policies and procedures.

Foreign Exchange The value of investments and other

assets and liabilities in foreign currencies is translated into

Canadian dollars at the rate of exchange on each valuation

date. Purchases and sales of investments, income and

expenses are translated at the rate of exchange prevailing on

the respective dates of such transactions. Realized foreign

exchange gains/losses are included in “Net gain (loss) on

foreign currencies and other net assets” in the Statements of


Functional Currency The ETFs have their subscriptions,

redemptions and performance denominated in Canadian

dollars and, consequently, the Canadian dollar is the

functional currency for the ETFs.

Investment Transactions Investment transactions are

accounted for as of the trade date. Transaction costs, such as

brokerage commissions, incurred by the ETFs are recorded

in the Statements of Comprehensive Income for the period.

The unrealized gain and loss on investments is the difference

between fair value and average cost for the period. The basis

of determining the cost of portfolio assets, and realized

and unrealized gains and losses on investments, is average

cost which does not include amortization of premiums or

discounts on fixed-income and debt securities with the

exception of zero coupon bonds.

Income Recognition Dividend income is recognized on the

ex-dividend date and interest for distribution purposes is

coupon interest recognized on an accrual basis and/or

imputed interest on zero coupon bonds. “Other income

(loss)” includes income from income trusts. Distributions

received from income trusts are recognized based on the

nature of the underlying components, such as income,

capital gains and return of capital. “Other income received

from underlying funds” includes income earned by an ETF

from investments in underlying ETFs. Any premiums paid or

discounts received on the purchase of zero coupon bonds are

amortized on a straight line basis.

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units per Unit Increase (decrease) in net

assets attributable to holders of redeemable units per unit

in the Statements of Comprehensive Income represents the

increase (decrease) in net assets attributable to holders of

redeemable units, divided by the average units outstanding

during the period.

316


December 31, 2016


Foreign Currencies The following is a list of abbreviations

used in the Schedule of Investment Portfolio:

AUD – Australian dollar ILS – Israeli new shekelCAD – Canadian dollar JPY – Japanese yenCHF – Swiss franc NOK – Norwegian kroneDKK – Danish krone NZD – New Zealand dollarEUR – Euro SEK – Swedish kronaGBP – Pound sterling SGD – Singapore dollarHKD – Hong Kong dollar USD – United States dollar

4. Financial instrument risk and capital management

RBC GAM is responsible for managing each ETF’s capital,

which is its net assets and consists primarily of its

financial instruments.

An ETF’s investment activities expose it to a variety of

financial risks. RBC GAM seeks to minimize potential adverse

effects of these risks on an ETF’s performance by employing

professional, experienced portfolio managers, daily monitoring

of the ETF’s holdings and market events and diversifying its

investment portfolio within the constraints of its investment

objectives. To assist in managing risks, RBC GAM also uses

internal guidelines, maintains a governance structure that

oversees each ETF’s investment activities and monitors

compliance with the ETF’s investment strategies, internal

guidelines and securities regulations.

Financial instrument risk, as applicable to an ETF,

is disclosed in its Notes to Financial Statements –

ETF Specific Information.

Liquidity risk

Liquidity risk is the possibility that investments in an ETF

cannot be readily converted into cash when required. An ETF

is exposed to liquidity risk to the extent that it is subject to

daily redemptions of redeemable units. Since the delivery of

redemptions is in the form of securities, an ETF is not exposed

to any significant liquidity risk. Liquidity risk is managed

by investing the majority of an ETF’s assets in investments

that are traded in an active market and that can be readily

disposed. In accordance with securities regulation, an ETF

must maintain at least 90% of its assets in liquid investments.

In addition, an ETF aims to retain sufficient cash and cash

equivalent positions to maintain liquidity, and has the ability

to borrow up to 5% of its net assets. All non-derivative financial

liabilities, other than redeemable units, are due within 90 days.

Any securities deemed to be illiquid are identified in the

Schedules of Investment Portfolio.

Credit risk

Credit risk is the risk that a loss could arise from a security

issuer or counterparty not being able to meet its financial

obligations. The carrying amount of investments and other

assets represents the maximum credit risk exposure as

disclosed in an ETF’s Statements of Financial Position. The

fair value of fixed-income securities includes a consideration

of the creditworthiness of the debt issuer. Credit risk exposure

is mitigated for those ETFs participating in a securities

lending program (see note 7). RBC GAM monitors each ETF’s

credit exposure and counterparty ratings daily. Rating data is

provided by the Licensor Parties.

Concentration risk

Concentration risk arises as a result of net financial

instrument exposures to the same category, such as

geographical region, asset type, industry sector or market

segment. Financial instruments in the same category have

similar characteristics and may be affected similarly by

changes in economic or other conditions.

Interest rate risk

Interest rate risk is the risk that the fair value of an ETF’s

interest-bearing investments will fluctuate due to changes

in market interest rates. The value of fixed-income and

debt securities, such as bonds, is affected by interest rates.

Generally, the value of these securities increases if interest

rates fall and decreases if interest rates rise.

Securities with a stated maturity date beyond the target

maturity year of the ETF have an effective maturity date in

the target year of the ETF, as determined with the rules based

on methodology developed by the Licensor Parties.

Currency risk

Currency risk is the risk that the value of investments

denominated in currencies, other than the functional

currency of a Fund, will fluctuate due to changes in foreign

exchange rates. The value of investments denominated in a

currency other than the functional currency is affected by

changes in the value of the functional currency in relation

to the value of the currency in which the investment is

denominated. When the value of the functional currency falls

in relation to foreign currencies, then the value of the foreign

investments rises. When the value of the functional currency

rises, the value of the foreign investments falls.

317


December 31, 2016


Other price risk

Other price risk is the risk that the value of financial

instruments will fluctuate as a result of changes in market

prices (other than those arising from interest rate or currency

risk), whether caused by factors specific to an individual

investment, its issuer, or all factors affecting all instruments

traded in a market or market segment.

5. Redeemable units

The beneficial interest in the ETFs is divided into equal

interests of one class referred to as outstanding units. Each

ETF is authorized to issue an unlimited number of redeemable

and transferable units, each of which represents an equal,

undivided interest in the net asset value of the ETF. Each unit

outstanding shall participate pro rata in any distributions

made, other than management fee distributions, and in the

event of termination of the ETF, in the net assets of the ETF.

On any trading day, an underwriter or designated broker

may place a subscription or redemption order for an integral

multiple of the prescribed number of units of an ETF. If the

order is accepted, the ETF will issue or redeem units to or

from the underwriter or designated broker within three

trading days thereafter. For each prescribed number of units

issued or redeemed, the underwriter or designated broker

must deliver or receive payment consisting of:

a) a basket of applicable securities for each prescribed

number of units; and

b) cash in an amount sufficient so that the value of the basket

of the applicable securities and cash delivered is equal to the

net asset value of the prescribed number of units plus the

distribution price adjustment, if applicable, of the ETF.

The distribution price adjustment is a distribution that has

been declared by the ETF and has reduced the net asset value

but has not yet been reflected in the market price. A trading

day is each day on which the TSX is open for trading.

A unitholder is entitled on any trading day to redeem units

for cash at a redemption price of 95% of net asset value

per unit of the ETF’s units at the next valuation following

receipt of the cash redemption request. To be effective on a

particular trading day, a cash redemption request must be

received by such time as RBC GAM may, from time to time,

determine on that trading day. If a cash redemption request

is received later than the prescribed time on a trading day or

a day which is not a trading day, the cash redemption request

shall be deemed to be received as of the next trading day.

The net asset value per unit is arrived at by dividing the

net asset value of the ETF by the total number of units

outstanding at the end of each trading day of the ETF.

The capital of the ETFs is managed in accordance with

the investment objective as outlined in the Prospectus.

6. Taxes

The ETFs qualify as “mutual fund trusts” or “unit trusts” as

defined in the Income Tax Act (Canada). In general, the ETFs

are subject to income tax; however, no income tax is payable

on net income and/or net realized capital gains which are

distributed to unitholders. In addition, for mutual fund

trusts, income taxes payable on net realized capital gains are

refundable on a formula basis when units of the ETFs are

redeemed. It is the intention of the ETFs to pay out all net

income and realized capital gains each year so that the ETFs

will not be subject to income taxes.

Accordingly, no provision for income taxes is recorded.

Net investment income and capital gains are distributable to

the unitholders in amounts determined under the provisions

of the Declaration of Trust on a monthly or quarterly basis.

All distributions, other than management fee distributions,

shall be credited to the unitholder pro rata in accordance

with the number of units held by them on record date of the

distribution. Management fee distributions shall be credited

to the unitholder entitled thereto.

Capital losses are available to be carried forward indefinitely

and applied against future capital gains. Non-capital losses

may be carried forward to reduce future taxable income for

up to 20 years.

7. Securities lending revenue

Certain of the ETFs lend portfolio securities from time to time

in order to earn additional income. Income from securities

lending is included in the Statements of Comprehensive

Income of the ETF. Each ETF will have entered into a

securities lending agreement with its custodian, RBC Investor

Services Trust (“RBC IS”). The aggregate market value of all

securities loaned by an ETF cannot exceed 50% of the assets

of an ETF. The ETF receives collateral, with an approved

credit rating of at least A, of at least 102% of the value of the

securities on loan. The ETF is indemnified by RBC IS for

any collateral credit or market loss. As such, the credit risk

associated with securities lending is considered minimal.

318


December 31, 2016


8. Administrative and other related-party transactions

Manager, Trustee and Portfolio Manager

RBC GAM is an indirect wholly owned subsidiary of

Royal Bank of Canada (“Royal Bank”). RBC GAM is the

manager, trustee and portfolio manager of the ETFs. RBC GAM

is responsible for the ETFs’ day-to-day operations, holds title

to the ETFs’ property on behalf of its unitholders, provides

investment advice and portfolio management services to the

ETFs and appoints underwriters or designated brokers for

the ETFs. RBC GAM is paid a management fee by the ETFs as

compensation for its services. The fee plus applicable taxes

are accrued daily and paid monthly in arrears.

RBC GAM in turn pays certain operating expenses of the

ETFs. These expenses include regulatory filing fees and other

day-to-day operating expenses including, but not limited to,

recordkeeping, accounting and fund valuation costs,

custody fees, audit and legal fees and the cost of preparing

and distributing annual and interim reports, prospectuses

and investor communications. The ETFs also pay certain

operating expenses directly, including the costs related to the

Independent Review Committee of the ETFs and the cost of

any new government or regulatory requirements introduced

and any borrowing costs (collectively, “other fund costs”), and

taxes (including, but not limited to, GST/HST).

Certain ETFs may invest in units of other Funds managed

by RBC GAM or its affiliates (“underlying mutual funds”).

The ETF’s ownership interest in underlying mutual funds

is disclosed in the Notes to Financial Statements – ETF

Specific Information.

Affiliates of RBC GAM that provide services to the ETFs in the

course of their normal business, all of which are wholly owned

subsidiaries of Royal Bank of Canada, are discussed below.

Custodian and Valuation Agent

RBC IS is the custodian and valuation agent for the ETFs.

RBC IS is responsible for certain aspects of day-to-day

administration including holding the assets and the daily

calculation of the net asset value of the ETFs.

Designated Broker and Underwriter

RBC Dominion Securities Inc. is a designated broker and

an underwriter for the ETFs. As such, RBC Dominion

Securities Inc. may subscribe or redeem units of the ETFs.

Broker and Dealer

The ETFs have established or may establish standard brokerage

agreements and dealing agreements at market rates with

related parties such as RBC Dominion Securities Inc.,

RBC Capital Markets, LLC, RBC Europe Limited,

NBC Securities Inc. and Royal Bank of Canada.

Other Related-Party Transactions

Pursuant to applicable securities legislation, the ETFs

relied on the standing instructions from the Independent

Review Committee with respect to the following

related-party transactions:


(b) investments in the securities of issuers for which a

related-party dealer acted as an underwriter during the

distribution of such securities and the 60-day period

following the conclusion of such distribution of the

underwritten securities to the public; and

(c) purchases of debt securities from or sales of debt

securities to a related-party dealer, where it acted

as principal.

The applicable standing instructions require that Related-

Party Trading Activities be conducted in accordance with

RBC GAM policy and that RBC GAM advise the Independent

Review Committee of a material breach of any standing

instruction. RBC GAM policy requires that an investment

decision in respect of Related-Party Trading Activities

(i) is made free from any influence of Royal Bank or its

associates or affiliates and without taking into account

any consideration relevant to Royal Bank or its affiliates

or associates, (ii) represents the business judgment of the

portfolio manager, uninfluenced by considerations other

than the best interests of the ETFs, (iii) is in compliance with

RBC GAM policies and procedures, and (iv) achieves a fair

and reasonable result for the ETFs.

319


December 31, 2016


9. Future accounting changes

The following IFRS standard has been issued, but is not

yet in effect:

In July 2014, the International Accounting Standards Board

finalized the reform of financial instruments accounting

and issued IFRS 9 (as revised in 2014), which contains the

requirements for a) the classification and measurement

of financial assets and financial liabilities, b) impairment

methodology and c) general hedge accounting. IFRS 9 (as

revised in 2014) will supersede IAS 39 Financial Instruments:

Recognition and Measurement in its entirety upon its

effective date.

The new standard, which becomes effective for annual

periods beginning on or after January 1, 2018, is not expected

to have a significant impact on the ETFs.

320


TABLE OF CONTENTS

Management Report of Fund Performance






Financial Statements

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING 135

INDEPENDENT AUDITOR’S REPORT 136






GENERIC NOTES TO FINANCIAL STATEMENTS 314

CONTACT US Inside Back Cover

By Phone

Investors: 1-855-RBC-ETFS (722-3837) Dealers: 1-800-662-0652

By Mail

Head office:

RBC Global Asset Management Inc. 155 Wellington Street WestSuite 2200Toronto, Ontario M5V 3K7

For general mutual fund enquiries, write to:

RBC Global Asset Management Inc.P.O. Box 7500, Station AToronto, Ontario M5W 1P9

On the Internet

Visit our website at: www.rbcgam.com/etfs

RBC ETFs are managed by RBC Global Asset Management Inc. ® / TM Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

If you have questions regarding RBC ETFs, you can contact us using the following options:

CONTACT US

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2016 Annual Report

RBC ETFs

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