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Audited Financial Statements of

RBC InsuRanCe GuaRanteed

Investment Funds

December 31, 2007

RBC InsuRanCe GuaRanteed Investment Funds December 31, 2007

RBC Insurance Guaranteed Investment Funds

Auditors’ Report � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �1

Financial Statements

Total All Funds and Portfolios � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �2

Individual Funds and Portfolios � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �3-24

Notes to the Financial Statements � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �25-33

Table of ConTenTs

RBC Insurance Guaranteed Investment Funds 1

Auditors’ Report

Funds:

RBC Canadian Money Market GIF

RBC Canadian Short-Term Income GIF

RBC Bond GIF

RBC Global Bond GIF

RBC Balanced GIF

RBC Canadian Dividend GIF

RBC Canadian Equity GIF

RBC North American Growth GIF

RBC North American Dividend GIF

RBC U�S� Equity GIF

RBC O'Shaughnessy U�S� Value GIF

RBC U�S� Mid-Cap Equity GIF

RBC Global Dividend Growth GIF

RBC O'Shaughnessy International Equity GIF

Portfolios:

RBC Conservative GIP

RBC Balanced GIP

RBC Growth GIP

RBC Aggressive Growth GIP

(collectively referred to as “RBC Insurance Guaranteed Investment Funds” or “the Funds”)

We have audited the statements of net assets of RBC Insurance Guaranteed Investment Funds as at December 31, 2007 and the statements of operations and of changes in net assets for the year or period then ended�These financial statements are the responsibility of the Fund’s management� Our responsibility is to express an opinion on these financial statements based on our audits�

We conducted our audits in accordance with Canadian generally accepted auditing standards� Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement� An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements� An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation�

In our opinion, these financial statements present fairly, in all material respects, the net assets of each of the Funds as at December 31, 2007 and the results of their operations and changes in their net assets for the year or period then ended in accordance with Canadian generally accepted accounting principles�

Chartered Accountants Licensed Public Accountants

February 22, 2008

RBC InsuRanCe GuaRanteed Investment Funds FInanCIal statements December 31, 2007


ToTal — all funds and PorTfolios

RBC INSURANCE GUARANTEED INVESTMENT FUNDS

Financial Statements December 31, 2007

Page 2 of 33



rbC Canadian Money MarkeT Gif



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rbC Canadian shorT-TerM inCoMe Gif





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rbC bond Gif



rbC Global bond Gif



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rbC balanCed Gif



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rbC Canadian dividend Gif



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rbC Canadian equiTy Gif



Page 9 of 33



rbC norTh aMeriCan GrowTh Gif



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rbC norTh aMeriCan dividend Gif



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rbC u.s. equiTy Gif



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rbC o’shauGhnessy u.s. value Gif



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rbC u.s. Mid-CaP equiTy Gif



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rbC Global dividend GrowTh Gif



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rbC o’shauGhnessy inTernaTional equiTy Gif



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rbC ConservaTive GiP, series 1



rbC ConservaTive GiP, series 2



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rbC balanCed GiP, series 1





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rbC balanCed GiP, series 2





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rbC GrowTh GiP, series 1





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rbC GrowTh GiP, series 2





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rbC aGGressive GrowTh GiP, series 1





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rbC aGGressive GrowTh GiP, series 2

RBC InsuRanCe GuaRanteed Investment Funds notes to the FInanCIal statements December 31, 2007


1. The funds

RBC Insurance Guaranteed Investment Funds are segregated funds which were formed on

September 18, 2006, and are comprised of the following funds and portfolios:

Funds:

RBC Canadian Money Market GIF RBC North American Growth GIF

RBC Canadian Short-Term Income GIF RBC North American Dividend GIF

RBC Bond GIF

RBC Global Bond GIF

RBC U�S� Equity GIF

RBC O’Shaughnessy U�S� Value GIF

RBC Balanced GIF RBC U�S� Mid-Cap Equity GIF

RBC Canadian Dividend GIF RBC Global Titans GIF

RBC Canadian Equity GIF RBC O’Shaughnessy International GIF

Portfolios:

RBC Conservative GIP RBC Growth GIP

RBC Balanced GIP RBC Aggressive Growth GIP

Both the funds and portfolios are collectively referred to in these financial statements as the “Funds”�

RBC Life Insurance Company is the sole issuer of the individual variable annuity contracts providing for

investment in each Fund, and is guarantor of the guarantee provisions contained in these contracts� The

underlying mutual funds available in these contracts are managed by RBC Asset Management Inc� and

the portfolios are managed by RBC Life Insurance Company�

Some of the Funds will invest in units of only one underlying mutual fund managed by RBC Asset

Management Inc�, while others, referred to in these financial statements as “Portfolios”, will invest in

units of several underlying mutual funds�

RBC Global Bond GIF Fund and RBC North American Dividend GIF Fund are the new funds started

October 1, 2007�

The Funds commenced with a net asset value of $10 per unit�



2. ChanGes in aCCounTinG PoliCiesThese financial statements have been prepared in accordance with Canadian generally accepted

accounting principles� The following is a summary of the significant accounting policies:

Financial Instruments

The Funds adopted on January 1, 2007, the new provisions of the Canadian Institute of Chartered

Accountants (“CICA”) new handbook Section 3855 Financial Instruments – Recognition and

Measurement, Section 3865 Hedges, Section 1530 Comprehensive income and Section 3861, Financial

Instruments – Disclosure and Presentation�

Accounting policies now applied

The new standards were applied on January 1, 2007 on a retrospective basis without prior period

restatement, in accordance with the applicable transitional provisions�

The significant changes were:

Classification or designation of all financial assets and liabilities in one of these two categories:

• held-for-trading (“HFT”)

• other financial liabilities

There was no financial impact to these changes�

HFT financial assets

All financial assets are purchased with the intention of generating active trading profits in the near

term, and are classified as HFT� All financial assets and liabilities are carried at fair value on the balance

sheet, starting on the trade date, and the changes in fair values are recorded in the increase or decrease

in unrealized appreciation of investments on the statement of operations� The transaction costs on

purchase and sale of investments are expensed as incurred, and included in the statement

of operations�

Determination of fair value

When a quoted active market exists, the fair values of financial assets are to be based on bid prices� The

Funds invest solely in units of underlying mutual funds and as such, the Funds’ investments are valued

based on the net asset value per unit of the underlying mutual fund, and those values reflect actual and

regularly occurring market transactions on an arm’s length basis�



3. suMMary of siGnifiCanT aCCounTinG PoliCies These financial statements have been prepared in accordance with Canadian generally accepted

accounting principles� The following is a summary of the significant accounting policies:

a) Investments

The investments in underlying funds are classified as Held for Trading and are valued on each

business date at their published closing net asset value� Investment transactions are accounted

for on the trade date� Realized gains and losses on sales of investments and unrealized

appreciation or depreciation in value of investments are calculated on an average cost basis and

recorded immediately into income�

b) Income recognition

Distributions from investments are recorded when declared by the underlying fund� Interest

income is accrued on a daily basis�

c) Net Asset Value per Unit

Net asset value per unit is computed by dividing the net assets attributable to a series of units on

a business day by the total number of units of the series outstanding on that day�

d) Net Income per unit

Net income per unit in the Statements of Operations represents the increase (decrease) in net

assets from operations attributable to the series for the period, divided by the number of units

outstanding at the end of the period�

e) Use of Estimates

These financial statements are prepared in accordance with Canadian generally accepted

accounting principles, and include estimates and assumptions by management that affect the

reported amounts of assets, liabilities, income and expenses� Actual results may differ from

these estimates�

f) Expenses of Funds

Each Fund is responsible for the payment of the fees and expenses related to the operation of

that Fund� Such fees and expenses include custodian fees, management fees, audit fees, bank

charges, interest, brokerage on securities transactions and all indirect taxes�

g) Income taxes

Each Fund is deemed to be an inter-vivos trust under the provisions of the Income Tax Act

(Canada) and is deemed to have allocated its income to the contract holders� Each Fund’s net

capital gains (losses) are deemed to be those of the contract holders� Accordingly, each Fund is

not subject to income tax on its net income, including net realized capital gains�



4. Summary oF SaleS aNd redemptioNS oF uNitSUnits of the Fund series, which are redeemable at the option of the holder in accordance with the provision

of Information Folder, do not have any nominal value or par value and the number of units, which may

be issued, is unlimited� Units are issued or redeemed on a daily basis at the net asset value per unit next

determined after the purchase order or redemption request�

SeriesBalance

January 1, 2007Purchases

during the periodRedemptions

during the periodBalance

June 30, 2007

RBC Canadian Money Market GIF Series 1 23,494 924,347 (113,058) 834,783

RBC Canadian Short-Term Income GIF Series 1 500 4,388 (538) 4,350

RBC Bond GIF Series 1 2,387 75,035 (1,524) 75,898

RBC Global Bond GIF Series 1 – 500 – 500

RBC Balanced GIF Series 1 140,019 569,761 (55,759) 654,021

RBC Canadian Dividend GIF Series 1 166,638 1,382,481 (101,741) 1,447,378

RBC Canadian Equity GIF Series 1 15,450 282,755 (11,201) 287,004

RBC North American Growth GIF Series 1 8,538 58,595 (1,311) 65,822

RBC North American Dividend GIF Series 1 8,538 4,501 (1,311) 4,501

RBC U.S. Equity GIF Series 1 863 9,532 – 10.395

RBC O’Shaughnessy U.S. Value GIF Series 1 39,681 181,776 (24,036) 197,421

RBC U.S. Mid-Cap Equity GIF Series 1 500 5,883 – 6,383

RBC Global Dividend Growth GIF Series 1 3,227 30,672 (2,561) 31,338

RBC O’Shaughnessy International Equity GIF Series 1 46,390 393,523 (32,130) 282,486

RBC Conservative GIPSeries 1 5,352 219,517 (3,358) 221,511

Series 2 25,739 142,208 (51,324) 116,623

RBC Balanced GIPSeries 1 80,529 295,214 (21,427) 354,316

Series 2 132,831 757,210 (52,940) 837,101

RBC Growth GIPSeries 1 22,424 173,097 (11,621) 183,900

Series 2 65,847 569,559 (36,929) 598,477

RBC Aggressive Growth GIP Series 1 2,002 34,534 (5,402) 31,134

Series 2 23,479 342,786 (7,544) 358,721



5. ManaGeMenT fees and insuranCe feesEach Fund pays a management fee and an insurance fee for the management of the Fund and for

providing the benefits under the contracts� Management and insurance fees differ from Fund to Fund

and between Series and are stated as an annualized percentage of the daily market value of the net

assets of the Fund attributed to that Series

Management and insurance fees are calculated and accrued at the end of each valuation date using a

daily factor of the annualized management and insurance fee percentages� Management and insurance

fees are reimbursed monthly to the manager�

The annual management and insurance fee percentages and insurance fee limits for each series of each

Fund are set out below�

Fund Annual Management Fee

(%)Annual Insurance Fee

(and Limit) (%)

Series 1 Series 2 Series 1 Series 2

RBC Canadian Money Market GIF 1.00 n/a 0.10(0.60) n/a

RBC Canadian Short-Term Income GIF 1.60 n/a 0.15(0.65) n/a

RBC Bond GIF 1.60 n/a 0.15(0.65) n/a

RBC Global Bond GIF 1.80 n/a 0.30(0.80) n/a

RBC Balanced GIF 2.25 n/a 0.30(0.80) n/a

RBC Canadian Dividend GIF 2.25 n/a 0.30(0.80) n/a

RBC Canadian Equity GIF 2.25 n/a 0.55(1.05) n/a

RBC North American Growth GIF 2.25 n/a 0.55(1.05) n/a

RBC North American Dividend GIF 2.30 n/a 0.55(1.15) n/a

RBC U.S. Equity GIF 2.30 n/a 0.65(1.15) n/a

RBC O’Shaughnessy U.S. Value GIF 2.30 n/a 0.65(1.15) n/a

RBC U.S. Mid-Cap Equity GIF 2.30 n/a 0.65(1.15) n/a

RBC Global Dividend Growth GIF 2.40 n/a 0.70(1.20) n/a

RBC O’Shaughnessy International Equity GIF 2.40 n/a 0.70(1.20) n/a

RBC Conservative GIP 2.10 2.20 0.20(0.70) 0.30(0.80)

RBC Balanced GIP 2.20 2.30 0.30(0.80) 0.40(0.90)

RBC Growth GIP 2.25 2.35 0.50(1.00) 0.60(1.10)

RBC Aggressive Growth GIP 2.35 2.40 0.65(1.15) 0.85(1.35)



6. oTher eXPenses absorbed by ManaGerIn addition to the management and insurance fees, the Funds also bear all operating and administrative

expenses including legal and audit fees� The management expense ratio (“MER”) is all of the expenses

of the Fund expressed as a percentage of the Fund’s average net asset value�

The RBC Life Insurance Company absorbed/waived certain expenses of the Funds when the aggregate

expenses exceeded a certain percentage (“MER cap”) of the average daily net asset value of each Series

of the Funds� Included in Due from RBC Life Insurance Company, in the statements of Net Assets,

are balances of expenses absorbed by RBC Life Insurance Company� The MER of a Fund is subject to

change without prior notification�

The annualized MER cap for each of the Funds is listed below:

FundAnnualized

MER cap

Expense before waiver

MER before waiver

Expense after

waiver

MER after

waiver

RBC Canadian Money Market GIF 1.10% 15,255 1.10% 15,255 1.10%

RBC Canadian Short-Term Income GIF 1.75% 550 1.75% 550 1.75%

RBC Bond GIF 1.75% 7,237 1.75% 7,237 1.75%

RBC Global Bond GIF 2.10% 26 2.10% 26 2.10%

RBC Balanced GIF 2.55% 125,402 2.55% 125,402 2.55%

RBC Canadian Dividend GIF 2.55% 233,243 2.55% 233,243 2.55%

RBC Canadian Equity GIF 2.80% 50,277 2.80% 50,277 2.80%

RBC North American Growth GIF 2.80% 13,539 2.80% 13,539 2.80%

RBC North American Dividend GIF 2.85% 163 2.86% 163 2.85%

RBC U.S. Equity GIF 2.95% 1,577 2.95% 1,577 2.95%

RBC O’Shaughnessy U.S. Value GIF 2.95% 44,912 2.95% 44,912 2.95%

RBC U.S. Mid-Cap Equity GIF 2.95% 1,249 2.95% 1,249 2.95%

RBC Global Dividend Growth GIF 3.10% 6,589 3.10% 6,586 3.10%

RBC O’Shaughnessy International Equity GIF 3.10% 92,028 3.10% 92,028 3.10%

RBC Conservative GIP, Series 1 2.30% 25,342 5.38% 10,843 2.30%

RBC Balanced GIP, Series 1 2.50% 104,623 4.49% 58,196 2.50%

RBC Growth GIP, Series 1 2.75% 71,156 5.72% 34,190 2.75%

RBC Aggressive Growth GIP, Series 1 3.00% 12,070 5.74% 6,309 3.00%

RBC Conservative GIP, Series 2 2.50% 76,319 7.97% 23,947 2.50%

RBC Balanced GIP, Series 2 2.70% 255,064 4.62% 149,118 2.70%

RBC Growth GIP, Series 2 2.95% 229,565 5.66% 119,668 2.95%

RBC Aggressive Growth GIP, Series 2 3.25% 145,684 6.04% 78,327 3.25%



7. sChedule of invesTed asseTs

Number of units Cost % Fund

Owned Market ValueMarket

value per Unit

RBC Canadian Money Market GIF RBC Canadian Money Market Fund, Series O

871,819 $8,718,190 2.9543 $8,718,190 $10.00

RBC Canadian Short-Term Income GIF RBC Canadian Short-Term Income Fund, Series O 3,899 $41,319 0.0576 $41,528 $10.65

RBC Bond GIF RBC Bond Fund, Series O

127,760 $781,435 6.5929 $778,249 $6.09

RBC Global Bond GIF RBC Global Bond Fund, Series O 228 $2,251 0.0118 $2,255 $9.89

RBC Balanced GIF RBC Balanced Fund, Series O

569,149 $7,499,610 28.8477 $7,210,896 $12.67

RBC Canadian Dividend GIF RBC Canadian Dividend Fund, Series O 333,598 $16,541,292 14.5437 $16,062,457 $48.15

RBC Canadian Equity GIF RBC Canadian Equity Fund, Series O

124,769 $3,603,056 5.9326 $3,478,300 $27.88

RBC North American Growth GIF RBC North American Growth Fund, Series O

26,455 $751,534 32.5104 $781,935 $29.56

RBC North American Dividend GIF RBC North American Dividend Fund, Series O

2,392 $42,820 89.2870 $41,258 $17.25

RBC U.S. Equity GIF RBC U.S. Equity Fund, Series O

4,297 $108,917 2.3001 $109,660 $25.52

RBC O’Shaughnessy U.S. Value GIF RBC O’Shaughnessy U.S. Value Fund, Series O

170,521 $2,340,681 88.8628 $1,975,661 $11.59

RBC U.S. Mid-Cap Equity GIF RBC U.S. Mid-Cap Equity Fund, Series O

3,426 $68,364 2.2187 $67,657 $19.75

RBC Global Dividend Growth GIF RBC Global Dividend Growth Fund, Series O

29,060 $350,293 8.3004 $332,593 $11.45

RBC O’Shaughnessy International Equity GIF RBC O’Shaughnessy International Equity Fund, Series O

365,702 $5,074,877 57.5921 $4,360,269 $11.92

RBC Conservative GIP

RBC Bond Fund, Series O 174,649 $1,068,446 9.0125 $1,063,877 $6.09

RBC Canadian Dividend Fund, Series O 10,962 $545,143 0.4779 $527,797 $48.15

RBC Canadian Money Market Fund, Series O 7,096 $70,963 0.0240 $70,963 $10.00

RBC Canadian Short-Term Income Fund, Series O 56,846 $605,213 0.8403 $605,501 $10.65

RBC Global Bond Fund, Series O 30,160 $301,826 1.5572 $298,815 $9.91

RBC Global Titans Fund, Series O 12,597 $148,696 3.5981 $144,178 $11.45

RBC O’Shaughnessy International Equity Fund, Series O 26,293 $346,761 4.1407 $313,489 $11.92

RBC O’Shaughnessy U.S. Value Fund, Series O 20,916 $276,780 10.8999 $242,332 $11.59

RBC U.S. Equity Fund, Series O 11,489 $281,710 6.1499 $293,158 $25.52

$3,645,538 $3,560,110



value per Unit

RBC Balanced GIP


RBC Canadian Dividend Fund, Series O 20,942 $1,037,309 0.9130 $1,008,332 $48.15

RBC Canadian Equity Fund, Series O 36,976 $1,058,745 1.7582 $1,030,825 $27.88


RBC Canadian Short-Term Income Fund, Series O 97,120 $1,035,333 1.4356 $1,034,485 $10.65


RBC Global Titans Fund, Series O 92,210 $1,110,435 26.3378 $1,055,339 $11.44

RBC North American Growth Fund, Series O 17,443 $500,394 21.4355 $515,572 $29.56

RBC O’Shaughnessy International Equity Fund, Series O 83,779 $1,143,388 13.1938 $998,902 $11.92

RBC U.S. Equity Fund, Series O 83,558 $2,126,458 44.7275 $2,132,192 $25.52

RBC U.S. Mid-Cap Equity Fund, Series O 54,641 $1,104,327 35.3855 $1,078,976 $19.75

$13,074,869 $12,775,087

RBC Growth GIP



RBC Canadian Equity Fund, Series O 43,866 $1,251,142 2.0858 $1,222,894 $27.88


RBC Canadian Short-Term Income Fund, Series O 16,452 $175,353 0.2432 $175,240 $10.65




RBC O’Shaughnessy International Equity Fund, Series O 84,925 $1,158,196 13.3743 $1,012,564 $14.47

RBC U.S. Equity Fund, Series O 55,901 $1,425,222 29.9230 $1,426,454 $25.52

RBC U.S. Mid-Cap Equity Fund, Series O 61,414 $1,243,531 39.7718 $1,212,722 $19.75

$8,843,788 $8,593,155



7. sChedule of invesTed asseTs (ConTinued)





value per Unit

RBC Aggressive Growth GIP


RBC Canadian Equity Fund, Series O 29,832 $851,679 1.4185 $831,641 $27.88




RBC O'Shaughnessy International Equity Fund, Series O 73,820 $1,014,016 11.6255 $880,160 $11.92

RBC U.S. Equity Fund, Series O 31,350 $801,354 16.7812 $799,985 $25.52

RBC U.S. Mid-Cap Equity Fund, Series O 34,653 $705,712 22.4413 $684,285 $19.75

$4,506,838 $4,322,746

7. sChedule of invesTed asseTs (ConTinued)

® Registered trademark of Royal Bank of Canada� RBC Insurance is a registered trademark of Royal Bank of Canada� Used under licence� (04/2008)

RBC Insurance, through its operating entities, including RBC Life Insurance Company, provides

a wide range of life, health, travel, home, auto, and reinsurance products as well as creditor insurance services

to more than five million North American customers� As one of the leading life insurance producers in Canada,

RBC Life Insurance Company offers individual and group life and health insurance solutions, including

term life insurance, universal life policies, group benefits, critical illness insurance and long term care insurance�

These products are distributed through more than 17,000 independent brokers affiliated with producer groups,

financial planning firms and stock brokerage firms, as well as through direct sales and a network of

career sales representatives�

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