epoch global equity fund - td asset management · 2019-09-02 · june 30, 2019 semi-annual...

Epoch Global Equity Fund

(08/19)532114

for the period ended June 30, 2019

TD Mutual Funds

Semi-Annual Financial Report

June 30, 2019 Semi-Annual Financial Report

nManagement’s Responsibility for Financial Reporting

The accompanying unaudited interim financial report has been prepared by TD Asset Management Inc. (“TDAM”), as manager of the TD Mutual Fund Trusts, TD Managed Assets Program Portfolios and TD Managed ETF Portfolios (collectively the “Funds” and individually the “Fund”) and approved by TDAM’s board of directors. The manager is responsible for the integrity, objectivity and reliability of the data presented. This responsibility includes selecting appropriate accounting principles and making judgments and estimates consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), including International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. The manager is also responsible for the development of internal controls over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial informa tion is produced, and the safeguarding of all assets of the Funds.

The board of directors of TDAM, is responsible for reviewing and approv-ing the financial statements and overseeing management’s performance of its financial reporting responsibilities.

On behalf of TDAM, manager of the Funds.

Bruce Cooper Salma Salman Director and Director and Chief Executive Officer Chief Financial Officer August 14, 2019 August 14, 2019

nNotice to Unitholders

The Auditor of the Funds has not reviewed the TD Mutual Fund Trusts in this Financial Report

TDAM, as manager of the Funds, appoints an independent auditor to audit the Funds’ annual financial statements. Applicable securities laws require that if an auditor has not reviewed the Funds’ interim financial report, this must be disclosed in an accompanying notice.

1


nEpoch Global Equity Fund

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

as at June 30, 2019 and December 31, 2018 (Unaudited)

June 30, December 31, 2019 2018

Assets Current Assets Investments $ 3,490,784 $ 3,128,608 Derivative Assets (Note 3) 0 7 Cash 98,896 162,685 Interest and Dividends Receivables 2,335 1,935 Subscriptions Receivable 19 162 Receivable for Investments Sold 15,866 0

Tax Reclaims Receivable 217 225

3,608,117 3,293,622

Liabilities Current Liabilities Accrued Liabilities 23 31 Redemptions Payable 504 765 Payable for Investments Purchased 16,962 698

17,489 1,494

Net Assets Attributable to Holders of Redeemable Units $ 3,590,628 $ 3,292,128

Net Assets Attributable to Holders of Redeemable Units – Per Series (Note 5) Investor Series $ 80,994 $ 90,986 Advisor Series $ 15,854 $ 15,932 F-Series $ 13,325 $ 11,629 D-Series $ 16,826 $ 2,099 O-Series $ 3,463,629 $ 3,171,482

$ 3,590,628 $ 3,292,128

Net Assets Attributable to Holders of Redeemable Units – Per Series Unit

Investor Series $ 22.32 $ 19.66

Advisor Series $ 12.64 $ 11.14

F-Series $ 15.52 $ 13.57

D-Series $ 11.39 $ 9.99

O-Series $ 18.15 $ 15.79

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

for the periods ended June 30, 2019 and 2018 (Unaudited)

2019 2018

Income Net Gain (Loss) on Investments and Derivatives

Dividend Income $ 62,018 $ 57,253 Interest for Distribution Purposes 1,666 693 Net Realized Gain (Loss) 32,615 123,675 Net Change in Unrealized Appreciation/

Depreciation 406,343 (47,236)

Net Gain (Loss) on Investments and Derivatives 502,642 134,385 Foreign Exchange Gain (Loss) on Cash (1,090) 453 Securities Lending Income 922 915

Total Income (Net) 502,474 135,753

Expenses (Note 6) Management Fees 1,248 1,437 Administration Fees 184 214 Independent Review Committee Fees 1 1 Interest Charges 20 38 Transaction Costs 533 684

Total Expenses before Waivers 1,986 2,374 Less: Waived Expenses (21) (39)

Total Expenses (Net) 1,965 2,335

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax 500,509 133,418

Tax Reclaims (Withholding Taxes) (7,198) (8,095)

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 493,311 $ 125,323

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units – Per Series Investor Series $ 11,903 $ 1,644 Advisor Series $ 2,065 $ 231 F-Series $ 1,680 $ 237 D-Series $ 392 $ 22 O-Series $ 477,271 $ 123,189

$ 493,311 $ 125,323

Weighted Average Units Outstanding for the Period – Per Series

Investor Series 4,387 4,688

Advisor Series 1,339 1,388

F-Series 861 644

D-Series 318 137

O-Series 199,812 213,075

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units – Per Series Unit

Investor Series $ 2.71 $ 0.35

Advisor Series $ 1.54 $ 0.17

F-Series $ 1.95 $ 0.37

D-Series $ 1.23 $ 0.16

O-Series $ 2.39 $ 0.58

The accompanying notes are an integral part of the interim financial report.

2


Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended June 30, 2019 and 2018 (Unaudited)

Investor Series Advisor Series F-Series

2019 2018 2019 2018 2019 2018

Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 90,986 $ 107,897 $ 15,932 $ 17,695 $ 11,629 $ 9,459

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 11,903 1,644 2,065 231 1,680 237

Distributions to Holders of Redeemable Units 0 0 0 0 0 0

Redeemable Unit Transactions Proceeds from Redeemable Units Issued 2,110 9,521 913 3,397 1,950 3,571 Reinvestments of Distributions 0 0 0 0 0 0 Redemption of Redeemable Units (24,005) (11,736) (3,056) (2,666) (1,934) (2,046)

Net Increase (Decrease) from Redeemable Unit Transactions (21,895) (2,215) (2,143) 731 16 1,525

Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (9,992) (571) (78) 962 1,696 1,762

Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 80,994 $ 107,326 $ 15,854 $ 18,657 $ 13,325 $ 11,221

Redeemable Unit Transactions Redeemable Units Outstanding,

Beginning of the Period 4,629 4,699 1,431 1,363 857 608 Redeemable Units Issued 99 407 75 255 133 226 Redeemable Units Issued on Reinvestments 0 0 0 0 0 0 Redeemable Units Redeemed (1,099) (502) (252) (203) (131) (128)

Redeemable Units Outstanding, End of the Period 3,629 4,604 1,254 1,415 859 706

D-Series O-Series TOTAL

2019 2018 2019 2018 2019 2018

Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 2,099 $ 1,327 $ 3,171,482 $ 4,020,066 $ 3,292,128 $ 4,156,444

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 392 22 477,271 123,189 493,311 125,323

Distributions to Holders of Redeemable Units 0 0 0 0 0 0

Redeemable Unit Transactions Proceeds from Redeemable Units Issued 14,964 588 87,142 158,290 107,079 175,367 Reinvestments of Distributions 0 0 0 0 0 0 Redemption of Redeemable Units (629) (242) (272,266) (619,829) (301,890) (636,519)

Net Increase (Decrease) from Redeemable Unit Transactions 14,335 346 (185,124) (461,539) (194,811) (461,152)

Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 14,727 368 292,147 (338,350) 298,500 (335,829)

Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 16,826 $ 1,695 $ 3,463,629 $ 3,681,716 $ 3,590,628 $ 3,820,615

Redeemable Unit Transactions Redeemable Units Outstanding,

Beginning of the Period 210 117 200,833 217,122 Redeemable Units Issued 1,324 51 5,256 8,412 Redeemable Units Issued on Reinvestments 0 0 0 0 Redeemable Units Redeemed (57) (21) (15,268) (32,088)

Redeemable Units Outstanding, End of the Period 1,477 147 190,821 193,446



3



Statements of Cash Flows (in 000s) for the periods ended June 30, 2019 and 2018 (Unaudited)

2019 2018

Cash Flows from (used in) Operating Activities Increase (Decrease) in Net Assets Attributable

to Holders of Redeemable Units $ 493,311 $ 125,323 Adjustment For:

Unrealized Foreign Exchange (Gain) Loss on Cash 286 268

Net Realized (Gain) Loss (32,615) (123,675) Net Change in Unrealized Appreciation/

Depreciation (406,343) 47,236 Purchase of Investments and Derivatives (651,198) (656,434) Proceeds from Sale, Paydown and Maturity

of Investments and Derivatives 728,432 1,025,784 (Increase) Decrease in Interest and

Dividends Receivables (439) 268 Increase (Decrease) in Accrued Liabilities (8) (4)

Net Cash from (used in) Operating Activities 131,426 418,766

Cash Flows from (used in) Financing Activities Proceeds from Issuances of Redeemable Units 91,193 172,101 Amounts Paid on Redemption of Redeemable Units (286,122) (633,373)

Net Cash from (used in) Financing Activities (194,929) (461,272)

Unrealized Foreign Exchange Gain (Loss) on Cash (286) (268) Net Increase (Decrease) in Cash (63,503) (42,506) Cash, Net of Bank Overdraft at Beginning of the Period 162,685 138,374

Cash (Bank Overdraft) at End of the Period $ 98,896 $ 95,600

Interest for Distribution Purposes Received*, Net of Withholding Taxes $ 1,666 $ 693

Dividends Received*, Net of Withholding Taxes $ 54,451 $ 49,446

* Included as part of Cash Flows from (used in) Operating Activities.


4


Canadian Equities – 1.1%

MATERIALS – 0.2%

144,974 Kirkland Lake Gold Ltd. $ 6,147 $ 8,179

INDUSTRIALS – 0.2%

71,117 Canadian National Railway Company 6,814 8,619

CONSUMER DISCRETIONARY – 0.2%

164,500 Dollarama Inc. 5,168 7,579

CONSUMER STAPLES – 0.2%

93,393 Alimentation Couche-Tard Inc., Class B SV 7,618 7,697

INFORMATION TECHNOLOGY – 0.3%

7,023 Constellation Software Inc. 4,379 8,668

Total Canadian Equities 30,126 40,742

U.S. Equities – 54.4%

ENERGY – 1.4%

137,628 Anadarko Petroleum Corporation 11,710 12,717

575,741 Occidental Petroleum Corporation 51,702 37,909

63,412 50,626

MATERIALS – 2.0%

200,729 DowDuPont Inc. 34,311 19,733

64,946 LyondellBasell Industries NV, Class A 7,517 7,326

149,357 Martin Marietta Materials Inc. 37,409 45,007

79,237 72,066

INDUSTRIALS – 5.9%

141,494 Alaska Air Group Inc. 12,437 11,842

103,158 AO Smith Corporation 7,717 6,371

91,902 The Boeing Company 45,054 43,809

65,418 Copart Inc. 4,585 6,403

57,771 Donaldson Company Inc. 3,896 3,848

35,116 Expeditors International of Washington Inc. 2,467 3,488

661,786 Hexcel Corporation 39,941 70,094

23,191 Raytheon Company 5,668 5,281

46,426 Rollins Inc. 1,594 2,181

187,043 Southwest Airlines Co. 13,490 12,438

35,040 Union Pacific Corporation 4,510 7,760

526,352 XPO Logistics Inc. 46,280 39,847

187,639 213,362

CONSUMER DISCRETIONARY – 5.9%

2,416 Amazon.com Inc. 5,857 5,991

2,945 Booking Holdings Inc. 7,519 7,230

200,538 Dollar General Corporation 20,889 35,495

17,897 Domino’s Pizza Inc. 6,324 6,522

138,199 Gentex Corporation 3,925 4,454

214,686 The Home Depot Inc. 41,942 58,469

752,309 MGM Resorts International 27,414 28,147

36,928 NIKE Inc., Class B 3,019 4,060

84,430 Starbucks Corporation 6,330 9,268

703,273 The TJX Companies Inc. 31,738 48,701

33,077 Yum! Brands Inc. 3,439 4,794

158,396 213,131

CONSUMER STAPLES – 1.9%

168,805 Costco Wholesale Corporation 41,816 58,417

34,436 The Estee Lauder Companies Inc., Class A 4,144 8,257

45,960 66,674

HEALTH CARE – 7.1%

8,231 ABIOMED Inc. 3,649 2,808

34,982 Agilent Technologies Inc. 3,352 3,421

8,835 Align Technology Inc. 1,250 3,167

600,598 Boston Scientific Corporation 26,213 33,804

79,219 Bruker Corporation 3,177 5,182

482,351 Centene Corporation 37,749 33,124

203,402 Danaher Corporation 17,415 38,069

38,816 Encompass Health Corp. 2,212 3,221

70,534 Henry Schein Inc. 7,111 6,457

13,668 IDEXX Laboratories Inc. 3,763 4,928

14,424 Illumina Inc. 5,780 6,954

5,512 Intuitive Surgical Inc. 3,766 3,786

72,972 Masimo Corporation 9,625 14,221

8,684 Mettler-Toledo International Inc. 6,480 9,553

231,197 UnitedHealth Group Incorporated 24,657 73,877

35,438 Veeva Systems Inc., Class A 3,372 7,523

31,566 Zoetis Inc. 3,944 4,691

163,515 254,786

FINANCIALS – 8.4%

48,181 American Express Company 5,217 7,789

566,831 American International Group Inc. 43,318 39,549

1,596,191 Bank of America Corporation 49,203 60,618

874,732 Bank OZK 49,313 34,468

226,897 Capital One Financial Corporation 26,170 26,962

74,763 Commerce Bancshares Inc. 5,678 5,841

83,372 East West Bancorp Inc. 6,322 5,106

44,834 Interactive Brokers Group Inc. 3,231 3,182

37,079 Marsh & McLennan Companies Inc. 3,934 4,844

742,306 MetLife Inc. 45,464 48,284

941,911 Morgan Stanley 54,696 54,039

22,127 S&P Global Inc. 5,582 6,601

73,706 Western Alliance Bancorporation 4,034 4,316

302,162 301,599

INFORMATION TECHNOLOGY – 17.8%

17,444 Adobe Inc. 5,757 6,731

179,168 Apple Inc. 23,730 46,438

1,210,577 Applied Materials Inc. 38,833 71,196

55,013 Arista Networks Inc. 18,289 18,704

40,478 Automatic Data Processing Inc. 5,146 8,764

14,877 Broadcom Inc. 5,892 5,608

27,942 Cabot Microelectronics Corporation 3,799 4,028

188,141 Coherent Inc. 53,039 33,599

1,882,169 Cypress Semiconductor Corporation 22,404 54,817

21,778 Intuit Inc. 6,382 7,453

19,030 Jack Henry & Associates Inc. 2,216 3,338

73,102 KLA-Tencor Corporation 9,087 11,315

364,067 LogMeIn Inc. 40,936 35,128

23,873 Mastercard Incorporated, Class A 3,756 8,270

274,383 Micron Technology Inc. 13,618 13,866

741,273 Microsoft Corporation 40,100 130,040

29,745 NVIDIA Corporation 5,949 6,397

86,997 Paychex Inc. 6,614 9,375

461,706 PTC Inc. 27,497 54,271

202,329 Universal Display Corporation 14,799 49,828

258,021 Visa Inc., Class A 23,018 58,641

370,861 637,807

REAL ESTATE – 0.2%

52,712 Ryman Hospitality Properties Inc. 5,863 5,598

$ $


Schedule of Investment Portfolio (in 000s except number of Shares

or Units/Par Value) as at June 30, 2019 (Unaudited)

No. of Shares or Units/ Par Value Description Cost Fair Value


5

COMMUNICATION SERVICES – 3.8%

7,551 Alphabet Inc., Class A 8,559 10,707

53,464 Alphabet Inc., Class C 55,941 75,679

168,589 Electronic Arts Inc. 21,111 22,356

89,285 Facebook Inc., Class A 19,681 22,566

106,632 Liberty SiriusXM Group, Class A 5,638 5,280

110,930 136,588

Total U.S. Equities 1,487,975 1,952,237

International Equities – 41.7%

AUSTRALIA – 1.8%

2,796,033 Amcor Limited 42,366 41,618

46,897 CSL Limited 5,096 9,270

363,095 Mineral Resources Ltd. 4,719 5,000

429,651 Northern Star Resources Ltd. 2,204 4,602

735,403 Regis Resources Limited 2,405 3,570

56,790 64,060

BELGIUM – 1.1%

332,080 Anheuser-Busch InBev NV 37,130 38,492

BRAZIL – 0.3%

362,000 Ambev SA 2,826 2,207

346,086 Itausa – Investimentos Itau SA 1,302 1,525

20,600 Magazine Luiza SA 655 1,466

304,900 Odontoprev SA 1,587 1,899

193,400 Petroleo Brasileiro SA – Petrobras, Pref. 1,678 1,800

159,700 Vale SA 2,588 2,822

10,636 11,719

CHILE – 0.1%

75,663 Sociedad Quimica y Minera de Chile SA, Sponsored ADR 4,771 3,083

CHINA – 1.4%

10,513 51job Inc., ADR 944 1,039

17,746 58.com Inc., ADR 1,417 1,445

570,000 Agile Group Holdings Ltd. 1,042 1,000

2,678,000 Agricultural Bank of China Limited 1,593 1,468

30,775 Alibaba Group Holding Limited 6,754 6,829

171,000 ANTA Sports Products Limited 946 1,538

11,081 Autohome Inc., ADR 1,258 1,242

3,420,000 China Construction Bank Corporation, Class H 3,942 3,859

709,000 China Shenhua Energy Company Limited 2,262 1,945

839,908 Country Garden Services Holdings Company Ltd. 1,678 2,543

1,174,000 Dali Foods Group Company Ltd. 1,102 1,021

3,098,000 Industrial and Commercial Bank of China Limited 3,168 2,960

84,748 Jiangsu Hengrui Medicine Company Ltd. 1,019 1,066

561,000 Li Ning Company Limited 570 1,732

490,000 Logan Property Holdings Company Ltd. 1,082 1,038

174,500 Ping An Insurance (Group) Company of China Ltd. 2,745 2,744

76,226 Shanghai International Airport Company Ltd. 1,029 1,218

92,200 Tencent Holdings Limited 5,693 5,450

49,426 Tencent Music Entertainment Group 954 970

147,866 Yum China Holdings Inc. 6,792 8,946

236,800 Zhuzhou CRRC Times Electric Company Ltd. 1,671 1,634

47,661 51,687

CZECH REPUBLIC – 0.0%

26,588 Komercni banka AS 1,402 1,387

$ $


DENMARK – 1.1%

23,184 Genmab AS 5,879 5,583

668,512 ISS AS 30,621 26,420

83,112 Novo Nordisk AS, Class B 5,591 5,546

59,593 Novozymes AS, Class B 3,787 3,639

45,878 41,188

FINLAND – 1.8%

746,388 Nokian Renkaat Oyj 41,041 30,520

3,412,967 Nordea Bank ABP 48,869 32,450

89,910 62,970

FRANCE – 6.5%

265,305 Airbus SE 18,360 49,256

1,812,538 AXA SA 56,969 62,348

57,620 Edenred 2,317 3,849

204,958 EssilorLuxottica 30,668 35,022

23,486 LVMH Moet Hennessy-Louis Vuitton SE 5,958 13,090

314,432 Safran SA 25,563 60,330

50,295 Thales SA 6,522 8,137

146,357 232,032

HONG KONG – 0.8%

342,400 AIA Group Limited 3,026 4,836

234,000 China Mobile Limited 2,979 2,791

338,000 China Overseas Land & Investment Ltd. 1,392 1,632

220,000 China Resources Gas Group Ltd. 1,389 1,429

117,000 Galaxy Entertainment Group Ltd. 1,019 1,033

330,000 Haier Electronics Group Company Ltd. 1,159 1,195

156,100 Hong Kong Exchanges and Clearing Limited 5,689 7,217

6,372,500 WH Group Limited 6,925 8,461

23,578 28,594

HUNGARY – 0.1%

35,312 OTP Bank Nyrt 1,847 1,839

INDIA – 0.4%

78,095 Hindustan Unilever Limited 2,240 2,649

76,339 Housing Development Finance Corporation Limited 2,727 3,175

320,944 ITC Limited 1,671 1,668

44,094 Jubilant Foodworks Ltd. 1,092 1,031

10,750 Maruti Suzuki India Limited 1,420 1,333

8,298 Nestle India Limited 1,405 1,875

81,045 Tata Consultancy Services Limited 2,182 3,424

52,078 Tata Elxsi Ltd. 1,061 874

13,798 16,029

INDONESIA – 0.3%

2,471,300 P.T. Bank Central Asia Tbk 5,113 6,866

6,977,000 P.T. Bank Rakyat Indonesia (Persero) Tbk 1,915 2,820

7,028 9,686

IRELAND – 0.4%

43,045 Accenture PLC, Class A 6,920 10,415

20,483 Jazz Pharmaceuticals PLC 3,690 3,824

10,610 14,239

ITALY – 1.0%

311,867 FinecoBank Banca Fineco SpA 3,823 4,556

4,764,235 Snam SpA 34,295 31,009

38,118 35,565

$ $




6

JAPAN – 6.6%

661,100 Bridgestone Corporation 35,007 34,063

181,800 Japan Airlines Corp. 8,102 7,603

43,000 Koito Manufacturing Company Ltd. 2,786 3,003

536,400 NEXON Company Ltd. 10,148 10,177

576,700 Nippon Telegraph & Telephone Corporation 33,562 35,143

890,300 Sony Corporation 54,989 61,076

668,500 Suzuki Motor Corporation 35,092 41,119

486,700 Takeda Pharmaceutical Company Ltd. 25,352 22,600

262,800 Unicharm Corporation 9,932 10,355

64,800 ZENKOKU HOSHO Company Ltd. 3,290 3,254

305,000 Zozo Inc. 8,300 7,480

226,560 235,873

LUXEMBOURG – 0.0%

609,000 L’Occitane International SA 1,434 1,576

MACAU – 0.0%

163,600 Sands China Ltd. 1,043 1,024

MALAYSIA – 0.0%

661,900 Hartalega Holdings Berhad 1,065 1,099

MALTA – 0.1%

209,187 Kindred Group PLC 3,455 2,323

MEXICO – 0.3%

54,300 Grupo Aeroportuario del Pacifico SAB de CV 708 740

472,000 Kimberly-Clark de Mexico SAB de CV 1,145 1,148

2,981,100 Wal-Mart de Mexico SAB de CV, Series V 9,997 10,656

11,850 12,544

NETHERLANDS – 0.6%

33,379 ASML Holding NV 6,308 9,133

172,662 Core Laboratories NV 26,201 11,821

32,509 20,954

NEW ZEALAND – 0.1%

345,311 The a2 Milk Company Limited 2,963 4,457

PHILIPPINES – 0.0%

437,220 Metropolitan Bank & Trust Company 983 796

POLAND – 0.0%

30,647 Bank Polska Kasa Opieki SA 1,387 1,202

PORTUGAL – 0.1%

216,739 Jeronimo Martins SGPS SA 4,266 4,572

RUSSIA – 0.2%

995,300 Alrosa PJSC 1,729 1,774

142,319 Mobile TeleSystems PJSC, Sponsored ADR 1,503 1,735

19,781,000 PJSC Inter RAO 1,551 1,855

4,783 5,364

SINGAPORE – 0.1%

502,200 Singapore Exchange Limited 3,523 3,850

SOUTH AFRICA – 0.2%

1,018,917 FirstRand Limited 5,884 6,494

134,180 MultiChoice Group Limited 1,279 1,671

2,282 Naspers Limited, Class N 815 726

7,978 8,891

SOUTH KOREA – 2.1%

49,800 Cheil Communications Inc. 1,227 1,661

30,108 KB Financial Group Inc. 1,778 1,566

152,090 Samsung Electronics Company Ltd. 8,766 8,107

44,678 Samsung Electronics Company Ltd., GDR 41,114 59,503

$ $


22,028 SK Hynix Inc. 2,243 1,736

12,752 Woongjin Coway Company Ltd. 1,347 1,119

56,475 73,692

SPAIN – 3.7%

87,073 Amadeus IT Holding SA 5,185 9,032

1,547,827 Cellnex Telecom SA 33,177 75,000

1,218,715 Industria de Diseno Textil SA 52,069 48,001

90,431 132,033

SWEDEN – 0.7%

224,140 ASSA ABLOY AB, Class B 5,933 6,635

132,233 Atlas Copco AB, Class B 4,856 4,968

422,132 Epiroc AB, Class B 5,129 5,475

120,173 Swedish Match AB 7,712 6,643

23,630 23,721

SWITZERLAND – 4.3%

19,839 Kuehne + Nagel International AG 3,613 3,856

502,440 Nestle SA 46,708 68,115

4,078 Partners Group Holding AG 3,746 4,196

202,224 Roche Holding AG 68,713 74,507

13,593 Schindler Holding AG, Registered Shares 3,377 3,888

126,157 154,562

TAIWAN – 0.4%

427,660 Chailease Holding Company Ltd. 1,559 2,317

297,000 Chunghwa Telecom Company Ltd. 1,331 1,415

54,000 Eclat Textile Company Ltd. 769 906

329,000 Formosa Petrochemical Corporation 1,653 1,533

41,000 St. Shine Optical Company Ltd. 1,037 952

270,000 Taiwan Secom Company Ltd. 1,049 1,009

605,000 Taiwan Semiconductor Manufacturing Company Limited 5,901 6,097

13,299 14,229

THAILAND – 0.2%

1,294,000 Airports of Thailand Public Company Limited 3,780 4,061

219,800 Bumrungrad Hospital Public Company Limited 1,683 1,586

802,200 Mega Lifesciences Public Company Limited 1,148 1,199

207,400 PTT Exploration and Production Public Company Limited 1,133 1,196

7,744 8,042

UNITED KINGDOM – 4.9%

148,394 Admiral Group PLC 4,973 5,449

67,664 Ferguson PLC 6,401 6,302

183,511 Hargreaves Lansdown PLC 4,350 5,856

663,282 Howden Joinery Group PLC 4,936 5,593

146,173 Linde PLC 31,956 38,437

65,679,231 Lloyds Banking Group PLC 68,279 61,813

269,225 Prudential PLC 7,431 7,683

224,970 RELX PLC 5,002 7,129

444,346 Unilever PLC 24,367 36,169

157,695 174,431

Total International Equities 1,314,744 1,497,805

Transaction Costs (886)

TOTAL INVESTMENT

PORTFOLIO – 97.2% $ 2,831,959 $ 3,490,784

TOTAL PORTFOLIO $ 3,490,784

Note: Percentages shown relate investments at fair value to Net Assets as at the period end.

$ $




7


Fund-Specific Notes to the Interim Financial Report (Unaudited)

The Fund (I) The Fund was incepted on December 15, 1993 and its operations commenced on January 4, 1994.

(II) TDAM is the manager, trustee and portfolio adviser of the Fund. TDIS is the principal distributor of the Investor Series units of the Fund. TDAM has appointed Epoch Investment Partners, Inc., an affiliate of TDAM, as portfolio adviser for the Fund in addition to TDAM.

(III) The presentation and functional currency of the Fund is the Canadian dollar.

(IV) The investment objective of the Fund is to seek to achieve long-term capital appreciation by investing primarily in equity securities of companies from anywhere in the world. In seeking to achieve this objective, the Fund invests in equity securities across various industries in developed markets, and to a lesser extent, emerging markets. Security selection is focused on an issuer’s ability to generate and deploy free cash flow rather than traditional accounting measures such as price-to-book or price-to-earnings ratios.

(V) As at June 30, 2019, TD and funds managed by TDAM held 96.5% (December 31, 2018: 96.3%) of the net assets of the Fund.

Management Fees and Administration Fees (%) (Note 6) for the periods ended June 30, 2019 and 2018 (exclusive of GST and HST)

Annual Rate

Management Administration Series Fees• Fees

Investor Series 1.95 0.30 Advisor Series 1.95 0.30 F-Series 0.95 N/A D-Series 1.20 0.30 O-Series 0.00 N/A

• Includes management fees paid by the Fund and the proportionate management fees, if any, of the Underlying Funds managed by TDAM held by the Fund. However, there is no duplication of management fees paid to TDAM or its affiliates if the Fund invests in Underlying Funds that are managed by TDAM.

Brokerage Commissions and Soft Dollars (in 000s) (Notes 3 and 6) for the periods ended June 30, 2019 and 2018

2019 2018

Total Brokerage Commissions $ 533 $ 684

Commissions Paid to Related Parties 0 0

Soft Dollars 0 0

Tax Loss Carry Forwards (in 000s) (Note 7) as at December 31, 2018 None for the Fund.

Securities Lent (Note 3)

(I) SECURITIES LENDING INCOME

A reconciliation of the gross amount generated from the securities lending transactions to the securities lending income to the Fund for the periods ended June 30, 2019 and 2018 is as follows:

Percentage of Amount (in 000s) Total Amount (%)

2019 2018 2019 2018

Gross Securities Lending Income $ 1,135 $ 1,139 100.0 100.0

Agent Fees – The Bank of New York Mellon (213) (224) (18.8) (19.7)

Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) 922 915 81.2 80.3

Tax Reclaims (Withholding Taxes) (70) (20) (6.2) (1.8)

Net Securities Lending Income $ 852 $ 895 75.0 78.5

(II) SECURITIES LENT AND COLLATERAL HELD (in 000s) The table below summarizes the aggregate securities lent and related collateral held by the Fund as at June 30, 2019 and December 31, 2018.

June 30, December 31, 2019 2018

Fair Value of Securities Lent $ 423,120 $ 364,589

Fair Value of Collateral Held 448,928 387,239

Collateral held is in the form of debt obligations of the Government of Canada and other countries, Canadian provincial and municipal governments or corporations and is not included in the Statements of Financial Position.


8


Financial Risk Management (Notes 3, 4 and 8) as at June 30, 2019 and December 31, 2018

(I) INTEREST RATE RISK

Not significant to the Fund.

(II) CURRENCY RISK

The following tables indicate the currencies (other than the Fund’s functional currency) to which the Fund had exposure to as at June 30, 2019 and December 31, 2018, including the underlying principal amount of foreign exchange forward contracts, as applicable. The tables also illustrate the potential impact to the Fund’s net assets if the Fund’s functional currency had strengthened or weakened by 5 percent in relation to all exposure to other currencies, with all other variables held constant. In practice, the actual trading results may differ from these approximate sensitivity amounts and the differences could be material.

Foreign Exchange Financial Forward Total Impact on Currency (in 000s) Instruments Contracts Exposure* Net Assets*

June 30, 2019 Australian Dollar $ 64,060 $ 0 $ 64,060 $ 3,203 Brazilian Real 11,731 0 11,731 587 British Pound 128,865 0 128,865 6,443 China Renminbi 2,555 0 2,555 128 Czech Koruna 1,387 0 1,387 69 Danish Krone 41,188 0 41,188 2,059 Euro 490,294 0 490,294 24,515 Hong Kong Dollar 60,376 0 60,376 3,019 Hungarian Forint 1,839 0 1,839 92 Indian Rupee 16,083 0 16,083 804 Indonesian Rupiah 9,686 0 9,686 484 Japanese Yen 237,640 0 237,640 11,882 Malaysian Ringgit 1,103 0 1,103 55 Mexican Peso 12,545 0 12,545 627 New Taiwan Dollar 14,459 0 14,459 723 New Zealand Dollar 4,457 0 4,457 223 Philippine Peso 796 0 796 40 Polish Zloty 1,202 0 1,202 60 Russian Ruble 3,629 0 3,629 181 Singapore Dollar 3,850 0 3,850 193 South African Rand 8,891 0 8,891 445 South Korean Won 14,246 0 14,246 712 Swedish Krona 58,494 0 58,494 2,925 Swiss Franc 154,779 0 154,779 7,739 Thai Baht 8,042 0 8,042 402 United States Dollar 2,123,606 0 2,123,606 106,180

Total $ 3,475,803 $ 0 $ 3,475,803 $ 173,790

As Percentage of Net Assets (%) 96.8 4.8

* Includes both monetary and non-monetary instruments, where applicable.


Foreign Exchange Financial Forward Total Impact on Currency (in 000s) Instruments Contracts Exposure* Net Assets*

December 31, 2018 Australian Dollar $ 56,652 $ 0 $ 56,652 $ 2,833 Brazilian Real 12,405 0 12,405 620 British Pound 125,511 0 125,511 6,275 Czech Koruna 983 0 983 49 Danish Krone 31,057 80 31,137 1,557 Euro 438,572 0 438,572 21,929 Hong Kong Dollar 71,846 367 72,213 3,611 Hungarian Forint 1,942 0 1,942 97 Indian Rupee 14,955 0 14,955 748 Indonesian Rupiah 12,467 0 12,467 623 Japanese Yen 213,964 0 213,964 10,698 Mexican Peso 9,281 0 9,281 464 New Taiwan Dollar 20,876 0 20,876 1,044 New Zealand Dollar 4,148 0 4,148 207 Philippine Peso 922 0 922 46 Polish Zloty 2,069 0 2,069 103 Russian Ruble 3,143 0 3,143 157 Singapore Dollar 3,303 0 3,303 165 South African Rand 6,591 41 6,632 332 South Korean Won 15,961 0 15,961 798 Swedish Krona 55,548 210 55,758 2,788 Swiss Franc 155,557 0 155,557 7,778 Thai Baht 2,622 0 2,622 131 United States Dollar 1,853,416 0 1,853,416 92,671

Total $ 3,113,791 $ 698 $ 3,114,489 $ 155,724

As Percentage of Net Assets (%) 94.6 4.7

* Includes both monetary and non-monetary instruments, where applicable.

Fund-Specific Notes to the Interim Financial Report

9


(III) OTHER PRICE RISK

The table below summarizes the impact of other price risk to the Fund. As at June 30, 2019 and December 31, 2018, had the benchmark of the Fund increased or decreased by 5 percent, with all other variables held constant, the net assets of the Fund would have increased or decreased by approximately:

Impact on Impact on Net Assets (in 000s) Net Assets (%)

June 30, December 31, June 30, December 31, Benchmark 2019 2018 2019 2018

MSCI World Index (Net Dividend, C$) $ 197,229 $ 187,716 5.5 5.7

In practice, the actual trading results may differ from the above estimated amounts and the differences could be material.

(IV) CREDIT RISK

Not significant to the Fund.

(V) FINANCIAL INSTRUMENTS BY THE LEVEL IN THE FAIR VALUE HIERARCHY (in 000s) The tables below illustrate the classification of the Fund’s financial instruments within the fair value hierarchy as at June 30, 2019 and December 31, 2018.

Level 1 Level 2 Level 3 Total

June 30, 2019 Equities $ 3,490,784 $ 0 $ 0 $ 3,490,784

As at the end of the period, investments with a fair value of $356,506 were transferred from Level 2 to Level 1 as a result of increased activity in the market for those securities.

Level 1 Level 2 Level 3 Total

December 31, 2018 Equities $ 2,707,974 $ 420,634 $ 0 $ 3,128,608 Forward Contracts 0 7 0 7

$ 2,707,974 $ 420,641 $ 0 $ 3,128,615

As at the end of the period, investments with a fair value of $166,642 were transferred from Level 1 to Level 2 as a result of decreased activity in the market for those securities.

(VI) RECONCILIATION OF LEVEL 3 FAIR VALUE MEASUREMENTS (in 000s) Not significant or applicable to the Fund.


Investment Portfolio Concentration (%) (Note 8) As at June 30, 2019 and December 31, 2018, the Fund’s investment portfolio concentration can be summarized as follows:

June 30, December 31, 2019 2018

Canadian Equities Materials 0.2 0.2 Industrials 0.2 0.2 Consumer Discretionary 0.2 0.1 Consumer Staples 0.2 0.0 Financials 0.0 0.1 Information Technology 0.3 0.2 U.S. Equities Energy 1.4 2.1 Materials 2.0 3.4 Industrials 5.9 4.0 Consumer Discretionary 5.9 5.3 Consumer Staples 1.9 1.6 Health Care 7.1 8.5 Financials 8.4 7.8 Information Technology 17.8 16.3 Real Estate 0.2 0.0 Communication Services 3.8 2.1 International Equities Australia 1.8 1.7 Belgium 1.1 0.9 Brazil 0.3 0.4 Chile 0.1 0.2 China 1.4 1.6 Czech Republic 0.0 0.0 Denmark 1.1 1.0 Finland 1.8 2.1 France 6.5 6.0 Germany 0.0 1.4 Hong Kong 0.8 0.9 Hungary 0.1 0.1 India 0.4 0.5 Indonesia 0.3 0.4 Ireland 0.4 0.4 Italy 1.0 1.0 Japan 6.6 6.4 Luxembourg 0.0 0.1 Macau 0.0 0.0 Malaysia 0.0 0.0 Malta 0.1 0.1 Mexico 0.3 0.4 Netherlands 0.6 0.5 New Zealand 0.1 0.1 Philippines 0.0 0.0 Poland 0.0 0.1 Portugal 0.1 0.1 Russia 0.2 0.1 Singapore 0.1 0.1 South Africa 0.2 0.2 South Korea 2.1 2.1 Spain 3.7 2.7 Sweden 0.7 0.4 Switzerland 4.3 6.0 Taiwan 0.4 0.6 Thailand 0.2 0.1 United Kingdom 4.9 4.4 Forward Contracts 0.0 0.0 Other Net Assets (Liabilities) 2.8 5.0

100.0 100.0

Fund-Specific Notes to the Interim Financial Report

10


Interest in Unconsolidated Structured Entities (in 000s) (Note 3) as at June 30, 2019 and December 31, 2018 Not significant or applicable to the Fund.

Offsetting of Financial Assets and Liabilities (in 000s) (Note 3) The following table presents the recognized financial instruments that are offset, or subject to enforceable master netting arrangements, if certain conditions arise, or other similar agreements but that are not offset, and cash and financial instruments collateral received or pledged, as at June 30, 2019 and December 31, 2018 and shows in the Net Amount column what the impact would be in the Fund’s Statements of Financial Position if all set-off rights were exercised.

Amounts Net Amounts Related Amounts Not

Gross Amounts Set-Off in the Presented in Set-Off in the Statements

of Recognized Statements the Statements of Financial Position

Financial Assets of Financial of Financial Financial (Liabilities) Position Position Instruments Cash Net Amount

June 30, 2019 Derivative Assets $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Derivative Liabilities 0 0 0 0 0 0

December 31, 2018 Derivative Assets $ 7 $ 0 $ 7 $ 0 $ 0 $ 7

Derivative Liabilities 0 0 0 0 0 0

Fund-Specific Notes to the Interim Financial ReportEpoch Global Equity Fund

11

1. The Funds

The TD Mutual Fund Trusts and TD Managed Assets Program Portfolios (collectively, the “Funds” and individually, the “Fund”) are open-end mutual funds established under the laws of Ontario and governed by their respective Declarations of Trust or Trust Indenture, as amended from time to time.

TD Asset Management Inc. (“TDAM”) is the manager, portfolio adviser and trustee of the Funds. TDAM, TDAM USA Inc., TD Investment Services Inc. (“TDIS”), TD Waterhouse Canada Inc. (“TDWCI”) and Epoch Investment Partners, Inc. (“Epoch”) are wholly-owned subsidiaries of The Toronto-Dominion Bank (“TD”). TD Greystone Asset Management (“TD Greystone”) represents Greystone Managed Investments Inc., a wholly-owned subsidiary of Greystone Capital Management Inc. (“GCMI”). GCMI is a wholly-owned subsidiary of TD. The registered address of the Funds is P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8.

The financial year-end for the Funds is December 31. The Statements of Financial Position are presented as at June 30, 2019 and December 31, 2018, as applicable. The Statements of Comprehensive Income, Statements of Changes in Net Assets Attributable to Holders of Redeemable Units and Statements of Cash Flows are presented for the six-month periods ended June 30, 2019 and 2018, as applicable. Where a Fund or series of a Fund was established during either period, the information for that Fund or series is provided from the inception date, as disclosed in the Fund-Specific Notes to the Interim Financial Report (“Fund-Specific Notes”), to the applicable period end date and a comparative statement has only been presented for any period for which that Fund was in existence as at the reporting date.

These financial statements were authorized for issue by TDAM on August 14, 2019.

2. Basis of Presentation

These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), applicable to the preparation of interim financial reports, including International Accounting Standards (“IAS”) 34, “Interim Financial Reporting”. These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss (“FVTPL”).

3. Summary of Significant Accounting Policies

Financial Instruments Financial instruments include financial assets and financial liabilities, such as investments, derivatives, cash, and other receivables and payables. Derivatives that are reflected in the Statements of Financial Position as Derivative Assets (Liabilities) include rights, warrants, forwards, options, futures and swap contracts, where applicable, and are financial contracts between two or more parties, and whose value is derived from the performance of an underlying asset or group of assets. Underlying assets include stocks, bonds, currencies, interest

rates and market indices. The Funds classify and measure financial instruments in accordance with IFRS 9, “Financial Instruments”. Upon initial recognition, financial instruments are measured at FVTPL. All financial assets and liabilities are recognized in the Statements of Financial Position when a Fund becomes a party to the contractual requirements of the instrument. Financial instruments are derecognized when the right to receive cash flows from the instrument has expired or a Fund has transferred substantially all risks and rewards of owner -ship. As such, investment purchase and sale transactions are recorded as of the trade date.

The Funds’ financial assets and financial liabilities, other than receivables and payables, are subsequently measured at FVTPL with changes in fair value recognized in the Statements of Comprehensive Income. Other receivables and payables are subsequently measured at amortized cost.

The Funds have determined that they meet the definition of an ‘investment entity’ and as a result, the Funds measure subsidiaries, if any, at FVTPL. An investment entity is an entity that: obtains funds from one or more investors for the purpose of providing them with investment management services; commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and measures and evaluates the performance of substantially all of its investments on a fair value basis. The Funds’ investments may also include associates and joint ventures which are measured at FVTPL.

The Funds’ outstanding redeemable units’ entitlements include a contractual obligation to distribute any net income and net realized capital gains in cash (at the request of the unitholder) and therefore the ongoing redemption feature is not the Funds’ only contractual obligation. Consequently, the Funds’ Net Assets Attributable to Holders of Redeemable Units are classified as financial liabilities in accordance with the requirements of IAS 32, “Financial Instruments: Presentation”. The Funds’ obligations for Net Assets Attributable to Holders of Redeemable Units are presented at the redemption amount.

The accounting policies for measuring the fair value of the Funds’ investments and derivatives are substantially similar to those used in measuring the Funds’ net asset value (“NAV”) for transactions with unitholders. The NAV is the value of the total assets of a fund less the value of its total liabilities determined, on each valuation day, in accordance with Part 14 of National Instrument 81-106, “Investment Fund Continuous Disclosure”, for the purpose of processing unitholder transactions. Net Assets Attributable to Holders of Redeemable Units, also referred to as Net Assets, refers to net assets calculated in accor -dance with IFRS. As at all dates presented, there were no differences between the Funds’ NAV per series unit and Net Assets per series unit.

nNotes to the Interim Financial Report (Unaudited)

June 30, 2019 Semi-Annual Financial Report12

Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and marketable securities) is based on quoted market prices at the close of trading on the reporting date. The Funds use the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day’s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, TDAM determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances.

The fair value of financial assets and liabilities not traded in an active market, including over-the-counter derivatives, is determined using valuation techniques. The Funds use a variety of methods and make assumptions that are based on market conditions existing at each report-ing date. Valuation techniques include the use of comparable recent arm’s length transactions, reference to other instruments that are sub-stantially the same, discounted cash flow analysis, option pricing models and other techniques commonly used by market participants and which attempt to make the maximum use of observable inputs.

The valuation methodology for specific types of investments held by the Funds is summarized below.

(a) Securities not listed on any recognized public securities exchange are valued based on available quotations from recognized dealers in such securities, where readily available. If securities have no available broker-dealer bid/ask quotes, TDAM uses its own pricing model to price the securities. The pricing model will generally include the discounted cash flow valuation approach, the use of a credit spread based on the terms of the security and the use of such credit and yield analysis comparables as TDAM believes are relevant in the circumstances. Debt instruments are valued based on mid prices, where readily available. Other valuation techniques may be used, as described above, where applicable.

(b) Short-term debt instruments, repurchase and reverse repurchase agreements are valued based on quotations received from recognized investment dealers.

(c) Real return bonds are valued based on the available public quotations from recognized dealers. Changes in the inflation factor are included in Interest for Distribution Purposes in the Statements of Comprehensive Income.

(d) The Funds may use foreign exchange forward contracts to hedge against or profit from fluctuations in foreign exchange rates. These contracts are valued on each valuation day based on the difference between the contract rates and the current forward rates at the measurement date applied to the contracts’ notional amount. The net change in unrealized appreciation or depreciation and the net realized gain or loss from closing out contracts are reflected in the Statements of Comprehensive Income as part of Net Gain (Loss) on Investments and Derivatives.

(e) Options contracts that are traded in exchange markets are valued at their closing prices on each valuation day. The premium received or paid on options written or purchased is included in the cost of the options. Any difference between the current value of the contract and the value of the contract originated is recognized as Net Change in Unrealized Appreciation/Depreciation. When options are closed or exercised, the difference between the premium and the amount paid or received, or the full amount of the premium if the option expires worthless, is reflected in the Statements of Comprehensive Income as Net Realized Gain (Loss). The cost of a security purchased will be reduced by the premium received on options when a written put option is exercised or increased by the amount paid on options when a purchased option is exercised.

(f) The Funds may purchase standardized, exchange-traded futures contracts. Any difference between the value at the close of business on the current valuation day and that of the previous valuation day is settled in cash daily and recorded in the Statements of Comprehensive Income as Derivatives Income (Loss). Any cash deposits or borrowings on margin are reflected in the Statements of Financial Position as Margin Deposit (Payable) on Derivatives. Short-term debt instruments as indicated in the Schedule of Investment Portfolio have been segregated and are held as margin against the futures contracts purchased by the Funds, as applicable.

(g) The TD Mutual Fund Trusts may enter into a credit default swap (“CDS”) agreements to gain exposure to debt instruments without investing in them directly. A CDS agreement is a bilateral over- the-counter derivative contract between a protection buyer and a protection seller that exchange the credit risk of a specific issuer (reference entity). The protection buyer pays a periodic premium, often quarterly, to the protection seller to assume the credit risk associated with a particular credit event. Credit events include bankruptcy, a material default and debt restructuring for a specified reference asset. If a credit event occurs, the CDS agreements may be settled by either the physical delivery of the referenced asset for proceeds equal to par value or a cash payment equal to the loss amount. If there is no credit default event, no contingent amount is payable.

During the reporting periods, certain Funds have entered into CDS indices as protection seller. Any upfront payment made or received by these funds at the initiation of a CDS agreement is included in the CDS agreement’s fair value. Quarterly premiums received from the counterparty are accrued daily and recorded as Derivative Income (Loss) in the Statements of Comprehensive Income. Changes in the fair value of the CDS agreements outstanding at the reporting date are disclosed in the Statements of Comprehensive Income as Net Change in Unrealized Appreciation/Depreciation. Prices used to value the CDS are obtained directly from the data vendor or broker. When CDS agreements expire or are closed out, the net realized gain or loss is reflected in the Statements of Comprehensive Income as Net Realized Gain (Loss).

The Funds’ exposure to CDS is limited to the notional amount of the contract less any applicable recoverable amount, calculated by the product of the notional amount and the recovery rate of the respective reference entity.


Semi-Annual Financial ReportJune 30, 2019 13

(h) The exchange-traded funds (“ETFs”) that are not managed by TDAM are valued based on quoted market prices at the close of trading on the reporting date.

(i) Investments in underlying conventional mutual funds and TDAM managed ETFs are generally valued at the NAV per series unit of the investment funds as reported by the investment funds’ managers.

Fair Value Hierarchy The Funds classify their investments into fair value measurements within a hierarchy that prioritizes the inputs to fair value measurement. The fair value hierarchy has the following three levels:

Level 1 Quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3 Inputs that are not based on observable market data (that is, unobservable inputs).

All fair value measurements are recurring. The carrying values of Cash, Margin Deposit on Derivatives, Subscriptions Receivable, Interest and Dividends Receivables, Receivable for Investments Sold, Bank Overdraft, Margin Payable on Derivatives, Payable for Investments Purchased, Redemptions Payable, Distributions Payable, Accrued Liabilities and the redemption value of Funds’ obligation for Net Assets Attributable to Holders of Redeemable Units approximate their fair values due to their short-term nature.

Fair values are classified as Level 1 when the related security or deriva-tive is actively traded and a quoted price is available. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred out of Level 1. In such cases, instruments are reclassified into Level 2, unless the measurement of their fair value requires the use of significant unobservable inputs, in which case they are classified as Level 3. The Funds’ policy is to recognize transfers into and out of the fair value hierarchy levels at the end of the reporting period.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The classification within the hierarchy is based on the lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement. Observable data is considered to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

TDAM has a Global Fair Value Committee which oversees the perform -ance of the fair value measurements included in the financial statements of the Funds, including any Level 3 measurements. TDAM utilizes a variety of methods (as listed in the Fair Value Measurement section) in determining the fair value of securities classified as Level 3. The committee also meets quarterly to perform reviews of the valuations of investments held by the Funds.

The classification of the Funds’ financial instruments within the fair value hierarchy as at June 30, 2019 and December 31, 2018, and any transfers between levels at the end of the reporting periods as a result of changes in the lowest level input that is significant to the fair value measurement are disclosed in the Fund-Specific Notes, where applicable.

Interest in Unconsolidated Structured Entities A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. TDAM has determined that all of the underlying invest-ment funds (“Underlying Funds”) in which the Funds invest are unconsolidated structured entities. Underlying Funds include conven-tional mutual funds and ETFs. In making this determination, TDAM evaluated the fact that decision making about Underlying Funds’ activities is generally not governed by voting or similar rights held by the Funds and other investors in any Underlying Funds.

The Funds may invest in Underlying Funds whose investment objectives range from seeking to achieve short- to long-term income and/or capital growth potential. The Funds’ interests in these securities as at June 30, 2019 and December 31, 2018 are included at their fair value in the Statements of Financial Position, which represent the Funds’ exposure in these Underlying Funds. The Funds do not provide and have not committed to provide any additional significant financial or other support to the Underlying Funds. The change in fair value of each of the Underlying Funds during the reporting periods is included in Net Change in Unrealized Appreciation/Depreciation in the Statements of Comprehensive Income as part of Net Gain (Loss) on Investments and Derivatives. Additional information on the Funds’ interest in Underlying Funds, where applicable, is provided in the Schedule of Investment Portfolio and Fund-Specific Notes.

The TD Mutual Fund Trusts may also invest in mortgage-related and/or other asset-backed securities that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property. Mortgage-related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. The debt and equity securities issued by these issuers may include tranches with varying levels of subordination. The Funds may invest in senior notes that have a first lien on assets and have minimum exposure to junior or subordinate tranches. These securities may provide a monthly payment which consists of both interest and principal payments. Other asset-backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans.



As at June 30, 2019 and December 31, 2018, the fair value of mortgage-related and other asset-backed securities of these funds, where applicable, is disclosed as Investments in the Statements of Financial Position. The fair value represents the maximum exposure to losses at those dates. The change in fair value of mortgage-related and other asset-backed securities during the reporting periods is included in Net Change in Unrealized Appreciation/Depreciation in the Statements of Comprehensive Income as part of Net Gain (Loss) on Investments and Derivatives.

Translation of Foreign Currencies A Fund’s functional currency, as disclosed in the Fund-Specific Notes, represents the currency that TDAM views to most faithfully represent the economic effects of the Fund’s underlying transactions, events and conditions taking into consideration how units are issued or redeemed and how returns are measured. Foreign currency transactions are trans-lated into the functional currency using the exchange rates prevailing at the dates that transactions occur. Realized foreign exchange gains and losses on income are recognized as income in the Statements of Comprehensive Income.

Assets and liabilities denominated in a foreign currency are translated into the functional currency using the exchange rate prevailing at the measurement date. Foreign exchange gains and losses on the sale of investments are included in Net Realized Gain (Loss). Unrealized foreign exchange gains and losses on investments held and other assets and liabilities are included in Net Change in Unrealized Appreciation/ Depreciation. Realized and unrealized foreign exchange gains and losses relating to cash are presented as Foreign Exchange Gain (Loss) on Cash in the Statements of Comprehensive Income.

Offsetting of Financial Assets and Liabilities Financial assets and liabilities are offset and the net amount reported in the Statements of Financial Position where the Funds have a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. In the normal course of business, the Funds may enter into various master netting agreements or other similar arrange -ments that do not meet the criteria for offsetting in the Statements of Financial Position but still allow for the related amounts to be set-off in certain circumstances, such as bankruptcy or the termination of the contracts. Offsetting information, where applicable, is presented in the Fund-Specific Notes.

Reverse Repurchase Agreements Certain TD Mutual Fund Trusts may enter into reverse repurchase transactions. In a reverse repurchase transaction, a fund buys a security at one price from a third party and agrees to sell the same security back to the same party at a specified price on an agreed future date and the difference is reflected as Income from Reverse Repurchase Agreements in the Statements of Comprehensive Income.

The risk with these types of transactions is that the other party may default under the agreement or go bankrupt. These risks are reduced by requiring the other party to provide collateral to these funds. The value of the collateral has to be at least 102 percent of the market value of the security and the collateral is marked to market on each business day. The type of securities received and related collateral held by these funds, where applicable, are listed in the Schedule of Investment Portfolio.

Cash/Bank Overdraft Cash is comprised of deposits with financial institutions. Bank overdrafts are included under Current Liabilities in the Statements of Financial Position.

Margin Deposit (Payable) on Derivatives Margin accounts represent margin deposits or payable in respect of derivatives entered into by the Funds.

Receivable for Investments Sold/Payable for Investments Purchased Receivable for Investments Sold and Payable for Investments Purchased represent trades that have been contracted for but not yet settled or delivered on the Statements of Financial Position dates.

Valuation of Series Units TDAM generally calculates the NAV for each series of the Funds as at 4 p.m. Eastern Time on each day that the Toronto Stock Exchange is open for trading. However, in some unforeseen circumstances, the series NAV per unit may be calculated at another time.

The NAV is calculated, for processing subscription, switch, conversion or redemption orders of series units, for each series of units of the Funds by taking the series’ proportionate share of the individual Fund’s common assets less that series’ proportionate share of its common liabilities and deducting from this amount all liabilities that relate solely to that specific series.

The Net Assets Attributable to Holders of Redeemable Units – Per Series Unit is determined by dividing the total Net Assets Attributable to Holders of Redeemable Units of each series of the Funds by the total number of units outstanding of that series as at the reporting date.

Income Recognition Interest for Distribution Purposes as shown in the Statements of Comprehensive Income consists of interest income from cash and the coupon interest on debt instruments accounted for on an accrual basis. Interest receivable is included in Interest and Dividends Receivables in the Statements of Financial Position based on the debt instruments’ stated rates of interest. The Funds do not amortize premiums paid or discounts received on the purchase of debt securities except for zero coupon bonds which are amortized.

Dividend income from equities and ETFs are recognized on ex-dividend dates and distributions from underlying mutual funds are recognized on ex-distribution dates. Dividends received from ETFs are recognized in the Statements of Comprehensive Income based on the nature of the underlying components such as interest income, dividend income, capital gains and return of capital. Distributions received from underlying mutual funds are included in Distributions from Underlying Funds in the Statements of Comprehensive Income.

The TD Mutual Fund Trusts may engage in securities lending pursuant to the terms of an agreement which includes restrictions as set out in Canadian securities legislation. The income earned from securities lending, where applicable, is included in the Statements of Comprehensive Income as it is earned. The fair value of the securities loaned and fair value of the collateral held are determined daily. The details of securities lending income, aggregate values of securities on loan and related collateral held are provided in the Fund-Specific Notes, where applicable.



Investment Transactions and Transaction Costs For the purposes of calculating realized and unrealized gains and losses from investment transactions, the cost of each investment security is determined on an average cost basis, excluding transaction costs.

Transaction costs, such as brokerage commissions, incurred by the Funds in the purchase and sale of investments at fair value are recognized in the Statements of Comprehensive Income in the period incurred. Commissions incurred, where applicable, are also disclosed in the Fund-Specific Notes. No transaction costs are incurred when the Funds invest in underlying mutual funds, however, the underlying mutual funds’ investments may be subject to transaction costs.

Allocation of Income and Expenses, Realized and Unrealized Gains (Losses) Expenses (excluding interest charges and portfolio transaction costs) are accrued daily, separately for each series. Interest charges and portfolio transaction costs along with income, gains and losses, are allocated to each series based on their respective Net Assets Attributable to Holders of Redeemable Units.

Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units – Per Series Unit The Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units – Per Series Unit is calculated by dividing the Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units of each series by the weighted average units outstanding of that series for the reporting period, except when a series was established during the reporting period, in which case the Weighted Average Units Outstanding for the Period – Per Series is calculated from the date of commencement of operation of that series.

4. Critical Accounting Estimates and Judgements

The preparation of financial statements requires management to use judgement in applying its accounting policies and to make estimates and assumptions about the future. The following discusses the most significant accounting judgements and estimates that the Funds have made in preparing the financial statements:

Fair Value Measurement of Derivatives and Securities Not Quoted in an Active Market The Funds may hold financial instruments that are not quoted in active markets, including derivatives. As described in Note 3, the use of valuation techniques for financial instruments and derivatives that are not quoted in an active market requires TDAM to make assumptions that are based on market conditions existing as at the reporting date of the financial statements. Changes in assumptions about these factors could affect the reported fair values of financial instruments. Refer to the Fund-Specific Notes for further information about the fair value measurement of the Funds’ financial instruments, where applicable.

Classification and Measurement of Investments In classifying and measuring financial instruments held by the Funds, TDAM has assessed the Funds’ business model for managing their respective portfolios of investments and evaluating the performance on a fair value basis, and concluded that these financial assets and liabilities should be measured at FVTPL in accordance with IFRS 9.

Investment Entity In determining whether a Fund meets the definition of an investment entity, TDAM may be required to make significant judgements about whether a Fund has the typical characteristics of an investment entity. Each Fund may hold only one investment, an underlying fund (or have only one investor or have investors that are its related parties), however, consistent with the investment entity definition, each Fund primarily obtains funds from one or more investors for the purpose of providing investment management services, commits to its investors that the business purpose is to invest the funds solely for returns from capital appreciation, investment income or both, and measures and evaluates the performance of its investments on a fair value basis.

5. Redeemable Units

For TD Mutual Fund Trusts and TD Managed Assets Program Portfolios, each individual series of units is sold under different purchase options and may have higher or lower management fees based on their specific attributes, as summarized below, reflecting the extent of the investment advice provided.

TD Mutual Fund Trusts Each TD Mutual Fund Trust is authorized to issue an unlimited number of units of multiple series that rank equally and are available for sale under a single simplified prospectus. In addition, each of these funds is also authorized to issue an unlimited number of units of multiple series to be sold under a confidential offering memorandum or other separate simplified prospectus. The various series that may be offered by these funds are as described below.

Investor Series: Offered on a no-load basis to investors.

H5 Series Offered on a no-load basis to investors who wish to receive and H8 Series: a regular monthlycash flow from the Funds. Monthly distri -

butions may consist of net income, net realized capital gains and/or a return of capital.

Premium Series: Offered on a no-load basis to large investors and others who make the required minimum investment, as determined by TDAM from time to time.

K-Series: Offered on a no-load basis to large investors and others who make the required minimum investment, as determined by TDAM from time to time, and who wish to receive a regular monthly cash flow from the Funds. Monthly distribu -tions may consist of net income, net realized capital gains, and/or a return of capital.

e-Series: Offered on a no-load basis to investors who want to complete their transactions electronically.

D-Series: Offered on a no-load basis to investors who want to complete their transactions through TD Direct Investing, a division of TDWCI, or other discount brokers.



Advisor Series: Offered to investors who seek investment advice and want the option of transacting on a front-end load, back-end load, low-load or low-load-2 basis.

T5 Series Offered to investors who seek investment advice; want the and T8 Series: option of transacting on a front-end load, back-end load,

low-load or low-load-2 basis; and who wish to receive a regular monthly cash flow from the Funds. Monthly distribu-tions may consist of net income, net realized capital gains and/or a return of capital.

F-Series: Offered to investors, through fee-based financial advisors or dealer-sponsored “wrap accounts”, and others who pay an annual fee to their dealer instead of transactional sales charges.

FT5 Series Offered to investors, through fee-based financial advisors and FT8 Series: or dealer-sponsored “wrap accounts”, who wish to receive

a regular monthly cash flow from the Funds. Monthly distributions may consist of net income, net realized capital gains, and/or a return of capital. These series may also be offered to other investors who pay an annual fee to their dealer instead of transactional sales charges.

Premium Offered to large investors, through fee-based financial F-Series: advisors or dealer-sponsored “wrap accounts”, and others

who pay an annual fee to their dealer instead of trans -actional sales charges. For this series, investors must make the required minimum investment, as determined by TDAM from time to time.

W-Series: Offered to investors, through certain wealth management businesses of TD Bank Group, including certain divisions of TDWCI, or other dealers authorized by TDAM, who pay an annual fee to their dealer instead of transactional sales charges.

Private Series Offered on a no-load basis to large investors who make the and Private-EM required minimum investment as determined by TDAM, and Series: have entered into a Private Series agreement with TDAM.

Institutional Offered on a no-load basis to large investors, such as group Series: savings plans and others who make the required minimum

investment, as determined by TDAM from time to time.

C-Series: Offered on a no-load basis to large investors who make the required minimum investment as determined by TDAM and have entered into a C-Series agreement with TDAM.

O-Series: Offered on a no-load basis to large investors, such as institutions and mutual funds, who make the required minimum investment as determined by TDAM, and have entered into an O-Series agreement with TDAM.

Effective July 26, 2018, H-Series was renamed as H5 Series or H8 Series, T-Series was renamed as T5 Series or T8 Series and S-Series was renamed as FT5 Series or FT8 Series. Refer to Fund-Specific Notes of the applicable Funds for further details.

TD Managed Assets Program Portfolios Each TD Managed Assets Program Portfolio is authorized to issue an unlimited number of units of multiple series that rank equally and are available for sale under a single simplified prospectus. The various series that may be offered by these funds are as described below.

Investor Series: Offered on a no-load basis to investors.

H5 Series: Offered on a no-load basis to investors who wish to receive a regular monthly cash flow from the Funds. Monthly distributions may consist of net income, net realized capital gains and/or a return of capital.

Premium Series: Offered on a no-load basis to large investors and others who make the required minimum investment, as determined by TDAM from time to time.

K5 Series: Offered on a no-load basis to large investors and others who make the required minimum investment, as determined by TDAM from time to time, and who wish to receive a regular monthly cash flow from the Funds. Monthly distribu -tions may consist of net income, net realized capital gains, and/or a return of capital.

e-Series: Offered on a no-load basis to investors who want to complete their transactions electronically.

D-Series: Offered on a no-load basis to investors who want to complete their transactions through TD Direct Investing, a division of TDWCI, or other discount brokers.

Advisor Series: Offered to investors who seek investment advice and want the option of transacting on a front-end load, back-end load, low-load or low-load-2 basis.

T5 Series: Offered to investors who seek investment advice; want the option of transacting on a front-end load, back-end load, low-load or low-load-2 basis; and who wish to receive a regular monthly cash flow from the Funds. Monthly distribu -tions may consist of net income, net realized capital gains and/or a return of capital.

F-Series: Offered to investors, through fee-based financial advisors or dealer-sponsored “wrap accounts”, and others who pay an annual fee to their dealer instead of transactional sales charges.

FT5 Series Offered to investors, through fee-based financial advisors and FT8 Series: or dealer-sponsored “wrap accounts”, who wish to receive

a regular monthly cash flow from the Funds. Monthly distributions may consist of net income, net realized capital gains, and/or a return of capital. This series may also be offered to other investors who pay an annual fee to their dealer instead of transactional sales charges.

W-Series: Offered to investors, through certain wealth management businesses of TD Bank Group, including certain divisions of TDWCI, or other dealers authorized by TDAM, who pay an annual fee to their dealer instead of transactional sales charges.



WT5 Series Offered to investors who wish to receive a regular and WT8 Series: monthly cash flow from the Funds, through certain wealth

management businesses of TD Bank Group, including “certain divisions of TDWCI, or other dealers authorized by TDAM, who pay an annual fee to their dealer instead of transactional sales charges. Monthly distributions may consist of net income, net realized capital gains, and/or a return of capital.

Effective October 25, 2018, H-Series, K-Series, T-Series, S-Series and WT-Series were renamed as H5 Series, K5 Series, T5 Series, FT5 Series and WT5 Series, respectively. Refer to Fund-Specific Notes of the applicable Funds for further details.

Units of TD Mutual Fund Trusts and TD Managed Assets Program Portfolios are redeemable at the option of the unitholder in accordance with their respective provisions of the Declarations of Trust or Trust Indenture. Units of these funds are issued or redeemed on a daily basis at the NAV per series unit next determined after the subscription, switch, conversion order or redemption request, respectively, is received by TDAM. Subscriptions and redemptions include units converted from one series to another series within a Fund in the Statements of Changes in Net Assets Attributable to Holders of Redeemable Units. However, conversions between series within a Fund are excluded from Proceeds from Issuances of Redeemable Units and Amounts Paid on Redemption of Redeemable Units in the Statements of Cash Flows.

6. Related Party Transactions

Capital TDAM, affiliates of TDAM, and/or other investment funds managed by TDAM may invest in units of the Funds from time to time. The investment made by related parties is disclosed in the Fund-Specific Notes if significant.

Management Fees (a) TD Mutual Fund Trusts

In consideration for the provision of management, distribution, and portfolio management services and oversight of any portfolio sub-advisory services provided to the TD Mutual Fund Trusts, TDAM receives an annual management fee in respect of certain series of these funds. The management fee is calculated and accrued on a daily basis for each applicable series based on the NAV of that series and paid monthly to TDAM.

No management fees are charged with respect to Private Series and O-Series units. Instead, unitholders in Private Series and O-Series units may be charged a fee directly by TDAM.

(b) TD Managed Assets Program Portfolios

In consideration for the provision of management, distribution and portfolio management services to the TD Managed Assets Program Portfolios, each series of these funds pay TDAM an annual management fee. The management fee is calculated and accrued on a daily basis for each series based on the NAV of that series and paid monthly to TDAM.

Where the TD Mutual Fund Trusts and TD Managed Assets Program Portfolios invest in any Underlying Funds, there are fees and expenses

payable by the Underlying Funds in addition to those paid by the Funds. However, there is no duplication of management fees paid to TDAM or its affiliates if the Funds invest in Underlying Funds that are managed by TDAM or its affiliates. TDAM may waive all or a portion of the management fees charged to the Funds, which may be discontinued at any time by TDAM at its discretion without notice to unitholders. Detailed information on the management fees of the Funds is provided in the Fund-Specific Notes.

Administration Fees (a) TD Mutual Fund Trusts

In consideration for paying certain operating expenses, TDAM is paid an annual administration fee with respect to certain series of the TD Mutual Fund Trusts. The administration fee includes recordkeeping and communi -cation costs, custodial costs, legal fees, audit fees, filing fees and bank charges. The administration fee is calculated and accrued on a daily basis for each applicable series based on the NAV of that series and paid monthly to TDAM. Annual administration fees for each series of these funds, where applicable, are provided in the Fund-Specific Notes.

The administration fee is payable in respect of Investor Series, H5 Series, H8 Series, D-Series, Advisor Series and T5 Series and T8 Series of the TD Mutual Fund Trusts, as applicable, other than the money market funds, TD Ultra Short Term Bond Fund, TD Short Term Bond Fund, TD Canadian Bond Fund, TD Global Conservative Opportunities Fund, TD Global Balanced Opportunities Fund, the Index funds and Advisor Series units of TD U.S. Equity Portfolio. The administration fee is also payable in respect of Premium Series and K-Series of TD Mutual Fund Trusts other than TD U.S. Money Market Fund, TD Short Term Bond Fund, TD Canadian Bond Fund, TD Income Advantage Portfolio, TD Canadian Core Plus Bond Fund, TD Corporate Bond Plus Fund and TD Global Conservative Opportunities Fund.

No administration fee is charged with respect to other series of the TD Mutual Fund Trusts.


Except for the TD Managed ETF Portfolios, no administration fee is charged to the TD Managed Assets Program Portfolios. For the TD Managed ETF Portfolios, in consideration for paying certain operating expenses, TDAM is paid an annual administration fee with respect to D-Series of the Funds. The administration fee includes recordkeeping and communication costs, custodial costs, certain legal fees, audit fees, regulatory filing fees and bank charges. The administration fee is calculated and accrued on a daily basis based on the NAV of D-Series and paid monthly to TDAM. Annual administration fees for D-Series of the Funds are provided in the Fund-Specific Notes.



Operating Expenses Fund’s Independent Review Committee (“IRC”)

TDAM is responsible for management of the Funds’ investment portfolios, including the making of decisions relating to the investment of the Funds’ assets.

TDAM has established an IRC in respect of the Funds and the Underlying Funds managed by TDAM. The IRC acts as an impartial and independent committee to review and provide recommendations or, if appropriate, approvals respecting any transactions in which TDAM may have a conflict of interest. The IRC prepares, at least annually, a report of its activities for unitholders of the Funds.

The IRC has approved standing instructions to permit the Funds and/or the Underlying Funds managed by TDAM to enter into the following securities transactions:

(i) trades in securities of TD or any affiliate or associate thereof; (ii) investments in the securities of an issuer where TD Securities Inc.,

TDWCI, or any other affiliate of TDAM (a “Related Dealer”) acted as an underwriter during the distribution of such securities and the 60-day period following the completion of the distribution of the underwritten securities;

(iii) purchases or sales of securities of an issuer from or to another investment fund or discretionary managed account managed by TDAM; and

(iv) purchases of securities from or sales of securities to a Related Dealer, where it acted as principal.

Investments in securities of TD, interests in Underlying Funds managed by TDAM, or investments in any affiliates that were held by the Funds at the end of the reporting period are disclosed in the Schedule of Investment Portfolio and/or the Fund-Specific Notes.

The compensation and relevant expenses of IRC members are allocated among the investment funds managed by TDAM and disclosed in the Statements of Comprehensive Income as Independent Review Committee Fees.

(a) TD Mutual Fund Trusts

TDAM pays all of the operating expenses with respect to O-Series units of the TD Mutual Fund Trusts.

Private Series and Private-EM Series of the TD Mutual Fund Trusts and Advisor Series of TD U.S. Equity Portfolio bear their respective pro rata share of the operating expenses which are common to the operation of all series of these funds as well as those expenses which are attributable solely to that series (which may be payable to TDAM or its affiliates), including IRC costs, recordkeeping and communication costs, custodial, legal, audit and filing fees, bank charges, borrowing costs, all taxes, costs relating to compliance with any new governmental and regulatory requirements, and new types of costs or expenses.

For other series of the TD Mutual Fund Trusts, TDAM pays all of the operating expenses (including services provided by TDAM or its affiliates), other than costs and expenses associated with: all taxes; borrowing; the IRC; compliance with any new governmental and regulatory requirements, and new types of costs or expenses.


Except for the TD Managed ETF Portfolios, all operating expenses of the TD Managed Assets Program Portfolios (including for services provided by TDAM or its affiliates) are paid for by TDAM, including cost of the IRC, recordkeeping and communication costs, custodial, legal, audit and filing fees, bank charges, borrowing costs, and all taxes on such costs.

For the TD Managed ETF Portfolios, TDAM pays certain operating expenses. Each TD Managed ETF Portfolio is responsible for paying expenses associated with borrowing, the IRC, compliance with any new governmental and regulatory requirements, new types of costs or expenses, and all taxes on such costs and expenses.

Taxes on Expenses The Funds also pay applicable goods and services tax and harmonized sales tax at a blended rate to TDAM on management fees, administration fees and certain operating expenses based on the province or territory of residence of the investors in each series of the Funds, which are included with the respective expense in the Statements of Comprehensive Income.

Waived Expenses TDAM, at its discretion, may waive or absorb a portion of the expenses otherwise payable by the Funds. These waivers or absorptions may be terminated at any time without notice to unitholders. The amount of expenses waived or absorbed is disclosed in the Statements of Comprehensive Income as Waived Expenses, where applicable.

The Accrued Liabilities in the Statements of Financial Position represents the amount of management fees, administration fees and operating expenses (including applicable taxes) payable to TDAM by the Funds as at the reporting period end.

Brokerage Commissions and Soft Dollars (a) TD Mutual Fund Trusts

Brokerage commissions (including other transaction costs) paid on securities transactions and amounts paid to related parties of TD for brokerage services provided to these funds for the reporting periods ended June 30, 2019 and 2018, where applicable, are disclosed in the Fund-Specific Notes.

Client brokerage commissions are used as payment for order execution services and/or research services. The portfolio advisers or TDAM may select brokers including its affiliates, who charge a commission in excess of that charged by other brokers (“soft dollars”) if they determine in good faith that the commission is reasonable in relation to the order execution and research services utilized.

For debt instruments traded in the over the counter markets where client brokerage commissions are not charged, soft dollars or client brokerage commissions are not generated. For equities or other securities where client brokerage commissions are charged, the soft dollar portion of the amount paid or payable for goods and services other than order execution for the TD Mutual Fund Trusts is not generally ascertainable. Any ascertainable soft dollar value received under the soft dollar arrangement entered into by the portfolio advisers or TDAM, where applicable, is disclosed in the Fund-Specific Notes.




Except for the TD Managed ETF Portfolios, these funds did not incur any brokerage commissions for the reporting periods ended June 30, 2019 and 2018 to execute transactions in the Underlying Funds, and accordingly did not receive any investment or research services from brokers in exchange for commissions paid by these funds. For the TD Managed ETF Portfolios, brokerage commissions paid on the purchase or sale of units of the underlying TD ETFs and amounts paid to related parties of TD for brokerage services provided to these funds for the reporting periods ended June 30, 2019 and 2018, where applicable, are disclosed in the Fund-Specific Notes.

Certain of the Underlying Funds have incurred brokerage commissions, a portion of which may have been received by the Underlying Funds’ investment advisers in the form of investment or research services (“soft dollars”). Such amounts for each of the TDAM managed Underlying Funds are disclosed in the Underlying Funds’ financial statements, where ascertainable.

7. Taxation

The Funds (except for the TD Managed ETF Portfolios) qualify or intend to qualify as mutual fund trusts under the Income Tax Act (Canada) (“Tax Act”), unless otherwise disclosed in the Fund-Specific Notes. TD Managed ETF Portfolios qualify as unit trusts under the Tax Act. All or substantially all of the net investment income and sufficient amounts of net capital gains realized in any taxation year are distributed to unitholders such that no income tax is payable by the Funds, except that in certain circumstances, a Fund that is not a mutual fund trust may become liable to pay alternative minimum tax under the Tax Act. As a result of the distribution, the Funds have determined that they are in substance not taxable and therefore, do not record income taxes in the Statements of Comprehensive Income nor do they recognize any deferred tax assets or liabilities in the Statements of Financial Position. The Funds’ capital and/or non-capital losses carry forward, where applicable, are provided in the Fund-Specific Notes. Capital losses have no expiry. Non-Capital losses can be carried forward for up to twenty years.

The Funds may incur withholding taxes imposed by certain countries on investment income and capital gains. Such income and gains are recorded on a gross basis and the related withholding taxes are reported as Tax Reclaims (Withholding Taxes) in the Statements of Comprehensive Income.

8. Financial Risk Management

Financial Risk Factors Each Fund is exposed to a variety of financial risks: these may include market risk (including interest rate risk, currency risk, and other price risk), credit risk, liquidity risk and concentration risk. All investments present a risk of loss of capital.

TDAM seeks to reduce financial risks by employing and overseeing professional and experienced portfolio advisers that regularly monitor the Funds’ positions and market events and diversify investment portfolios within the constraints of each Fund’s investment objectives, investment strategies and applicable TDAM policies and procedures (collectively referred to as “Investment Restrictions”).

If a Fund invests in Underlying Funds, TDAM seeks to reduce financial risks by diversifying investments across the three main asset classes: money market investments for safety, bonds for income and equity investments for growth, where applicable. Since different types of investments tend to move independently from one another, positive performance in one asset class may help to offset negative performance in another, thereby reducing volatility and overall risk in the long-term.

The Funds are managed in accordance with their respective Investment Restrictions.

(a) Market Risk (i) Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will affect the future cash flows or the fair values of interest-bearing investments.

A Fund’s exposure to interest rate risk is concentrated in its investments in debt instruments (such as bonds and debentures) and interest rate derivative instruments, if any. Short-term investments, currencies and other assets and liabilities are short-term in nature and/or non-interest bearing and not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates.

If a Fund invests in Underlying Funds, it is exposed to indirect interest rate risk to the extent of the interest-bearing financial instruments held by the Underlying Funds. A Fund’s direct exposure to interest rate risk, where significant, is disclosed in the Fund-Specific Notes.

(ii) Currency Risk

A Fund may hold financial instruments denominated in currencies other than its functional currency. It is therefore exposed to currency risk, as the value of the financial instruments denominated in other currencies will fluctuate due to changes in the foreign exchange rates of those currencies in relation to the Fund’s functional currency.

Where a Fund invests in any Underlying Funds, it is exposed to indirect currency risk in the event that the Underlying Funds invest in financial instruments that are denominated in a currency other than the Underlying Funds’ functional currency.

A Fund and/or its Underlying Funds may enter into foreign exchange forward contracts for hedging purposes to reduce its foreign currency exposure or to establish exposure to foreign currencies.

A Fund’s direct exposure to currency risk (including monetary and non-monetary instruments), where significant, is disclosed in the Fund-Specific Notes. Where a Fund invests in a single Underlying Fund, the direct and indirect exposure to currency risk (including monetary and non-monetary instruments), where significant, is disclosed in the Fund-Specific Notes.



(iii) Other Price Risk

Other price risk is the risk that securities will fluctuate in value because of changes in market prices (other than those arising from interest rate risk or currency risk). TDAM seeks to reduce this risk through its Investment Restrictions.

In determining each Fund’s sensitivity impact from exposure to other price risk, a historical beta may be used when applicable. Historical beta, a measure of the sensitivity of a fund’s returns to market returns, is generally derived from comparing 36 months of returns between a fund and its benchmark. As such, beta inherently includes effects previously reflected in the interest rate risk and currency risk disclosures. Historical beta may not be representative of future beta.

Where a Fund invests in a single Underlying Fund, it is exposed to indirect other price risk in the event that the Underlying Fund invests in equity securities. As a result, other price risk, reflecting this indirect exposure, is provided in the Fund-Specific Notes.

Where a Fund invests in several Underlying Funds, its exposure to other price risk includes all investments in Underlying Funds. A Fund’s direct exposure to other price risk, where applicable, is disclosed in the Fund-Specific Notes.

Except for written options and equities sold short, the maximum risk resulting from financial instruments is the fair value of the financial instruments as presented in the Statements of Financial Position. Possible losses from written options and equities sold short can be unlimited.

(b) Credit Risk Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. Where applicable, a Fund’s main credit risk concentration is in debt instruments and derivative instruments it holds. A Fund’s exposure to credit risk is the risk that an issuer of debt instruments or a counterparty to derivative instruments will be unable to pay amounts in full when due. All transactions in listed securities are settled or paid for upon delivery using approved brokers. The risk of default with a broker is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation.

A Fund may be exposed to credit risk from the use of counterparties for foreign exchange forward contracts. Where applicable, this risk is minimized by:

(i) using counterparties with a minimum credit rating of A by S&P Global Ratings (“S&PGR”) or an equivalent rating from another recognized credit rating agency;

(ii) limiting the term of the foreign exchange forward contracts to a maximum of 365 days; and,

(iii) limiting the mark-to-market exposure to any one counterparty to 10 percent of the portfolio value.

A Fund may also be exposed indirectly to credit risk if it invests in Underlying Funds in the event that the Underlying Funds invest in debt instruments and derivatives.

The Funds and their Underlying Funds managed by TDAM only buy and hold short-term notes with a minimum of R-1 Low credit rating by DBRS Limited or an equivalent rating from another recognized credit rating agency.

A Fund’s direct exposure to short-term and/or debt instruments, by ratings categories, where applicable, is disclosed in the Fund- Specific Notes.

The TD Mutual Fund Trusts and the Underlying Funds held by the Funds may also engage in securities lending transactions. For these funds that are managed by TDAM, the securities lending transactions are with counterparties that have a minimum credit rating of A by S&PGR or an equivalent rating from another credit agency. The value of cash or securities held as collateral by these funds in connection with these transactions is at least 102 percent of the fair value of the securities loaned. The collateral and loaned securities are marked to market on each business day. The aggregate fair value of the securities loaned, together with repurchase transactions, are limited to 50 percent of each fund’s NAV at the time these funds enter into the transactions. Information about the fair values of securities lent and collateral held and securities lending income earned, where applicable, is disclosed in the Fund-Specific Notes.

In the TD Managed Assets Program Portfolios, where applicable, the portfolio adviser reviews these funds’ credit positions as part of the investment management process.

(c) Liquidity Risk Liquidity risk is defined as the risk that a fund may not be able to settle or meet its obligations on time or at a reasonable price. A fund’s exposure to this risk is concentrated in the daily cash redemptions of redeemable units. The Funds primarily invest in securities that are traded in active markets and can be readily disposed of. In addition, the Funds retain sufficient cash and cash equivalents to maintain liquidity, and have the ability to borrow up to 5 percent of their respective NAV for the purpose of funding redemptions.

All non-derivative financial liabilities, other than redeemable units outstanding, are due in less than 3 months.

(d) Concentration Risk Concentration risk arises as a result of the concentration of exposures within the same category, whether it is geographical location, security type or industry sector. A Fund’s concentration risk is disclosed in the Fund-Specific Notes.



9. Capital Risk Management

Units issued and outstanding represent the capital of the Funds. The Funds do not have any specific capital requirements on the subscription and redemption of units, other than certain minimum subscription requirements. Changes in the Funds’ capital during the reporting periods are reflected in the Statements of Changes in Net Assets Attributable to Holders of Redeemable Units. TDAM is responsible for managing the capital of the Funds in accordance with each Fund’s investment objec -tives and for managing liquidity in order to meet redemption requests.

10. Comparative Financial Information

Where applicable, certain comparative figures in the Statements of Comprehensive Income have been reclassified. Amounts related to Net Gain (Loss) on Derivatives, including the derivatives’ Net Realized Gain (Loss) and Net Change in Unrealized Appreciation/Depreciation, have been reclassified into Net Realized Gain (Loss) and Net Change in Unrealized Appreciation/Depreciation, respectively, under Net Gain (Loss) on Investments and Derivatives. Amounts related to Income Distributions and Capital Gain Distributions from Underlying Funds have been aggregated into Distributions from Underlying Funds. For these reclassifications, there was no impact on the Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units.

If applicable, the most recent financial statements of the Underlying Funds managed by TDAM are available, without charge, by writing to TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8, or by e-mail to [email protected], or by visiting our website at www.tdassetmanagement.com or the SEDAR website at www.sedar.com



Currency codes used throughout the report:

Currency Code

Description

Currency Code

Description

Currency Code

Description

AED UAE Dirham HKD Hong Kong Dollar PHP Philippine Peso

ARS Argentine Peso HUF Hungarian Forint PKR Pakistan Rupee

AUD Australian Dollar IDR Indonesian Rupiah PLN Polish Zloty

BRL Brazilian Real ILS Israeli Shekel QAR Qatari Riyal

CAD/C$ Canadian Dollar INR Indian Rupee RON Romanian Leu

CHF Swiss Franc JOD Jordanian Dinar RUB Russian Ruble

CLP Chilean Peso JPY Japanese Yen SEK Swedish Krona

CNY/CNH China Renminbi KRW South Korean Won SGD Singapore Dollar

COP Colombian Peso LKR Sri Lanka Rupee THB Thai Baht

CZK Czech Koruna MAD Moroccan Dirham TRY Turkish Lira

DKK Danish Krone MXN Mexican Peso TWD New Taiwan Dollar

EGP Egyptian Pound MYR Malaysian Ringgit USD/US$ United States Dollar

EUR Euro NOK Norwegian Krone ZAR South African Rand

GBP British Pound NZD New Zealand Dollar

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epoch global equity fund - td asset management · 2019-09-02 · june 30, 2019 semi-annual...

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