Question

Jennifer is interested in the mutual fund RBC U.S. Index Fund – Series A. She has a few questions for you before she buys this investment.

a) Does the reported fund’s return include the Management Expense Ratio (MER) ? Yes or No

b) What type of fee is charged: No-load, Front-end load or a Back-end load?

c) Is the status of this mutual fund classified as a closed-end or open-end mutual fund?  

d) Based on your response in c), explain what that mean and confirm if it trades on the stock exchange?

e) If you had $1,000 to invest in this fund, how many mutual fund shares could you purchase ? (NAV = 25,6915)

For question e) the result I found is 38.92 shares ?

The RBC U.S. index fund series A :

Global Asset Management FUND FACTS RBC Global Asset Management Inc. RBCU.S. Index Fund - Series A June 27, 2019 This document contains key information you should know about RBC U.S. Index Fund (Series A). You can find more details in the fund's simplified prospectus. Ask your representative for a copy. contact RBC Global Asset Management Inc. (RBC GAM) at 1-800-463-FUND (3863), [email protected], or visit www.rbcgam.com/investorinfo. Before you invest in any fund, you should consider how it would work with your other investments and your tolerance for risk. Quick facts Fund code: Date series started: Total value of the fund on May 31, 2019: Management expense ratio (MER): RBF557 October 13, 1998 $989.6 Million 0.66% Fund manager: RBC Global Asset Management Inc. Portfolio manager: RBC Global Asset Management Inc. Sub-advisor: BlackRock Asset Management Canada Limited Distributions: Annually in December; automatically reinvested unless you tell your representative to inform us that you want them in cash. Minimum investment: $500 initial, $25 additional investment What does the fund invest in? The fund invests primarily in equity securities of US. companies in order to track the performance of the S&P 500 Total Return Index*, either directly or indirectly through investment in other mutual funds. The charts below give you a snapshot of the fund's investments on May 31, 2019. The fund's investments will change. Top 10 investments (May 31, 2019) Investment mix (May 31, 2019) 1. Microsoft Corp. 4.1% 2. Apple Inc. 3.4% 3. Amazon.com, Inc. 3.2% 4. Facebook Inc., Class A 1.8% 5. iShares Core S&P 500 ETF 1.8% 6. Berkshire Hathaway Inc., Class B 1.7% 7. Johnson & Johnson 1.5% & JPMorgan Chase & Co. 1.5% 9. Alphabet Inc., Class C 1.5% 10. Alphabet Inc., Class A 1.4% Total percentage of top 10 investments 21.9% Total number of investments 508 20.7% Information Technology 13.9% Health Care 12.9% Financials 10.2% Communication Services 10.0% Consumer Discretionary 9.1% Industrials 7.3% Consumer Staples 4.8% Energy 3.4% Utilities 3.1% Real Estate 2.6% Materials 1.8% Underlying Funds 0.2% Cash/Other How risky is it? The value of the fund can go down as well as up. You could lose money. One way to gauge risk is to look at how much a fund's retums change over time. This is called "volatility". In general, funds with higher volatility will have returns that change more over time. They typically have a greater chance of losing money and may have a greater chance of higher retums. Funds with lower volatility tend to have returns that change less over time. They typically have lower returns and may have a lower chance of losing money. Risk rating RBC GAM has rated the volatility of this fund as medium. This rating is based on how much the fund's retums have changed from year to year. It doesn't tell you how volatile the fund will be in the future. The rating can change over time. A fund with a low risk rating can still lose money. Low Low to Medium Medium Medium to High High For more information about the risk rating and specific risks that can affect the fund's retums, see the sections entitled "What are the risks of investing in the fund?" and "Who should invest in this fund?" in the fund's simplified prospectus. No guarantees Like most mutual funds, this fund doesn't have any guarantees. You may not get back the amount of money you invest. Page 1 of 3

Answer 1

(a) No, The reported fund's returns does not include the Management Expense Ratio . The returns have been mentioned after deducting the management expense ratio.

(b) No fee is charged on the charged on the funds. It is a No Load Fund. There will be no sales charges if you buy, redeem or switch your units.

(c) This type of mutual fund is an Open Ended Mutual Fund as there is no limit on the amount of investment in the fund. The limit of $500 is the initial investment amount.

(d) Open Ended Mutual Funds are the funds in which there is no limit on the amount of investment. They are not listed on the stock exchange.

(e) Amount of Investment = $1000

    NAV = $ 25.6915

   Number of units that can be purchased = 1000/25.6915= 38.92