Printed on February 18, 2015 PH&N High Yield Bond Fund No. of Funds in Category 201 Fund Category High Yield Fixed Income Morningstar Rating™ QQQQ Investment Objective Portfolio Analysis as of January 31, 2015 To provide a high level of income and the opportunity for capital appreciation by investing primarily in a welldiversified portfolio of fixed income securities issued by Canadian and/or foreign corporations and governments. Asset Mix % Assets Cash 10.5 Fixed Income 89.5 Canadian Equity 0.0 US Equity 0.0 International Equity 0.0 Other 0.0 Fund Details Series Load Structure Currency Fund Code D No Load CAD RBF1280 Inception Date Total Fund Assets $Mil Series D NAV $ Series D MER % Benchmark July 2000 3,568.4 11.93 0.87 FTSE TMX Canada Universe Bond Index Income Distribution Capital Gains Distribution Quarterly Annually Sales Status Min. Investment $ Subsequent Investment $ Management Company Web Site Partially Reopen to existing unit holder 500 25 RBC Global Asset Management Inc. www.rbcgam.com Fixed Income Breakdown % Fixed Income Government Bonds Corporate Bonds Other Bonds Mortgage Backed Securities ST Investments (Cash & Other) Asset Backed Securities Bond Rating % Cash / Cash Equiv. AAA AA A BBB Below BBB Mortgages NR/NA 0.0 95.1 0.0 0.0 4.9 0.0 % Assets Quebecor Media 144A 6.625% 15-01-2023 Reynolds Grp Issuer 7.125% 15-04-2019 CCO Hldgs LLC 7% 15-01-2019 Baytex Engy 6.625% 19-07-2022 Trilogy Engy 144A 7.25% 13-12-2019 5.5 4.4 4.3 3.2 2.8 Everest Acq Llc/Finance 6.875% 01-05-2019 Numericable Grp 144A 4.875% 15-05-2019 Quebecor Media 7.375% 15-01-2021 Howard Hughes 144A 6.875% 01-10-2021 Western Engy Srvcs 7.875% 30-01-2019 2.7 2.3 2.3 2.2 2.2 Total % of Top 10 Holdings Total Number of Stock Holdings Total Number of Bond Holdings Total Number of Other Holdings Total Number of Holdings 31.8 0 80 3 83 % Term to Maturity 4.9 0.0 0.0 0.0 0.5 93.6 0.0 1.0 Top 10 Holdings 5.4 37.4 55.4 1.8 Under 1 Yr 1 - 5 Yrs 5 - 10 Yrs Over 10 Yrs 5.5 Avg. Term to maturity (Yrs) Duration (Yrs) Yield to Maturity 2.8 5.6 Notes Geographic Allocations Effective November 26, 2014, units of this fund will not be available for purchases by new investors. Existing investors who hold units of the fund can continue to make additional investments into the fund. Canada United States International (ex-Emerging Markets) Emerging Markets Fund's investment objective changed November 28, 2011. Performance Analysis as of January 31, 2015 % Assets 49.5 50.5 0.0 0.0 20 18 16 Growth of $10,000 Series D $19,835 14 12 10 8 20 15 Calendar Returns % Series D 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 5.4 1st 8.1 2nd 3.8 1st 1.3 1st 17.3 4th 10.6 2nd 4.9 1st 10.6 3rd 5.1 2nd 4.0 2nd 0.7 3rd Fund Quartile 1 Mth 3 Mth 6 Mth 1 Yr 3 Yr 5 Yr 10 Yr Since Incep. Trailing Return % 0.7 3rd 461 -0.6 3rd 453 0.8 2nd 447 3.9 3rd 389 6.1 2nd 201 6.6 2nd 94 7.0 1st 42 8.2 — — Fund Quartile No. of Funds in Category ©2015. Morningstar Research Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. These pages are not complete without the disclosure page. Printed on February 18, 2015 PH&N High Yield Bond Fund Management Overview Manager Bios Performance Analysis Cont'd as of January 31, 2015 Hanif Mamdani Distributions ($)/Unit Phillips, Hager & North Investment Management Total Distributions Interest Dividends Capital Gains Return Of Capital Hanif is Head of Alternative Investments and a member of the Asset Mix Committee at RBC Global Asset Management Inc. Hanif has expertise in corporate finance, options valuation, credit analysis and risk management. He is accountable for the portfolio strategy for all corporate bonds and for the investment strategy and performance of the PH&N High Yield Bond Fund and a multi-strategy hedge fund. Best/Worst Periods % YTD* 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 — — — — — 0.69 0.69 — — — 0.65 0.65 — — — 0.79 0.64 — 0.14 — 0.68 0.68 — — — 0.96 0.55 — 0.40 — 0.55 0.50 — 0.05 — 0.65 0.56 — 0.10 — 1.01 0.63 — 0.38 — 0.67 0.60 — 0.06 — 0.78 0.63 — 0.15 — Ended 1 Yr Ended 9-2003 7-2005 Best 25.0 10-2008 Worst -3.7 10-2008 Average 8.1 No. of Periods 163 Pct. Positive 96.3 * Distributions are characterized into income type at year-end. 3 Yr Ended 5 Yr Ended 10 Yr 14.4 2.7 8.4 139 100.0 10-2013 3-2009 10.7 4.5 8.2 115 100.0 9-2012 1-2015 9.5 7.0 8.2 55 100.0 Quarterly Commentary as at December 31, 2014 The high-yield bond market experienced a significant sell-off in the fourth quarter due in part to the sharp decline in oil prices and its corresponding impact on energy bonds in the high yield universe. Price declines of 15%-25% for more speculative oil and gas bonds were common, leading to a contagion effect across many unrelated industry groups. The Fund’s defensive portfolio bias was helpful during this sell-off, although some of our high quality Canadian energy bonds suffered disproportionate mark-downs. This volatility, while jarring, has created some very interesting opportunities for 2015. Currently, the broad high-yield bond index yields approximately 6.75%, or nearly 200 basis points higher than mid-year levels – a vivid illustration of the sharpness of the recent sell-off. In our view, as long as economic growth remains solid, corporate profits remain steady and default rates remain well-behaved, “high quality high yield” can deliver solid performance relative to other fixed income alternatives thanks to the more appealing valuation backdrop. Despite our optimism for high yield bonds, we understand that we may be in the latter innings of the credit cycle, and the prospect of a Fed interest rate hike in 2015 presents potential for further volatility. Accordingly, we will maintain a strong bias to lower-duration, higher-quality issuers while being fairly opportunistic in certain inefficient and dislocated sectors, like best-in-class Canadian energy names. In our experience, it is this opportunism in the face of rampant fear that has allowed the Fund to generate returns in excess of its running yield. ©2015. Morningstar Research Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. These pages are not complete without the disclosure page. Printed on February 18, 2015 PH&N High Yield Bond Fund Disclosure RBC Funds, PH&N Funds and RBC Corporate Class Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or the Fund Facts document of the mutual fund before investing. Except as otherwise noted, the indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual fund securities are not guaranteed or covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. For money market funds, there can be no assurances that the fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. The value of mutual funds change frequently and past performance may not be repeated. Phillips, Hager & North Investment Management (PH&N IM) is a division of RBC Global Asset Management Inc. (RBC GAM). RBC GAM is the fund manager and the principal portfolio adviser of PH&N Funds and BonaVista Funds. The principal distributor of PH&N Funds and BonaVista Funds is Phillips, Hager & North Investment Funds Ltd. (PH&NIF), which uses the trade name PH&N Investment Services. RBC GAM is an indirect, wholly-owned subsidiary of Royal Bank of Canada. This document has been compiled by RBC Global Asset Management Inc. (RBC GAM) from sources believed to be reliable, but no representations or warranty, express or implied, are made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. All opinions and estimates constitute RBC GAM's judgment as of the date of this document, are subject to change without notice and are provided in good faith but without legal responsibility. The Top Ten/25 Holdings may change due to ongoing portfolio transactions within the fund. The prospectus, Fund Facts document, and other information about the underlying investment funds are available at www.sedar.com. MER (%) for RBC Funds and PH&N Funds is based on actual expenses for full-year period, January 1 to December 31, 2014, expressed on an annualized basis. MER (%) for RBC Corporate Class Funds is based on actual expenses for the half-year period April 1, 2014 to September 30, 2014, expressed on an annualized basis. Graphs are only used to illustrate the effects of the compound growth rate and do not reflect future values of any fund or returns on investment of any fund. The fund profile is provided for informational purposes only. Particular investments and/or trading strategies should be evaluated relative to each individual’s investment objectives. The information contained in the fund profile is not, and should not be construed as, investment or tax advice. You should not act or rely on the information contained in the fund profile without seeking the advice of an appropriate professional advisor. Quartile rankings are determined by Morningstar Research Inc., an independent research firm, based on categories maintained by the Canadian Investment Funds Standards Committee (CIFSC). Quartile rankings are comparisons of the performance of a fund to other funds in a particular category and are subject to change monthly. The quartiles divide the data into four equal segments expressed in terms of rank (1, 2, 3 or 4). This is the Morningstar quartile ranking of Series C units of the Fund as of December 31, 2014. Morningstar ratings are overall ratings reflecting risk adjusted performance as of December 31, 2014. The ratings are subject to change every month. The ratings are calculated for funds with a minimum of 3 years of performance, calculated from the funds' 1 and 3 year average annual returns measured against a 91-day Treasury Bill return with appropriate fee adjustments. The top 10% of the funds in a category receive 5 stars (high); if the funds fall in the next 22.5%,they receive 4 stars (above average); a place in the middle 35% earns a fund 3 stars (neutral or average); those in the next 22.5% receive 2 stars (below average); and the lowest 10% get 1 star (low). Ratings are just one factor to consider when investing. For more information, please see www. morningstar.ca. ® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2015 ©2015. Morningstar Research Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. These pages are not complete without the disclosure page.