TD Canadian Core Plus
Bond Fund
532006
(08/15)
TD Mutual Funds
Semi-Annual Financial Report
for the period ended June 30, 2015
n
Management’s Responsibility for Financial Reporting
The accompanying unaudited interim financial report have been
prepared by TD Asset Management Inc. as manager of the TD Mutual
Fund Trusts (collectively the “Funds” and individually the “Fund”).
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 (“IFRS”). 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 information is produced,
and the safeguarding of all assets of the Funds.
The board of directors of TD Asset Management Inc. is responsible
for reviewing and approving the interim financial report and overseeing
management’s performance of its financial reporting responsibilities.
On behalf of TD Asset Management Inc., manager of the Funds
Tim G. Wiggan
Director and
Chief Executive Officer
August 12, 2015
n
Atanaska Novakova
Director and
Chief Financial Officer
August 12, 2015
Notice to Unitholders
The Auditor of the Funds has not reviewed this Financial Report
TD Asset Management Inc., 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.
June 30, 2015
1
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
Statements of Financial Position
(in 000s except per unit amounts
and number of units) as at June 30, 2015 and December 31, 2014 (Unaudited)
June 30,
December 31,
2015
Assets
Current Assets
Investments (Note 4)
Cash
Interest Receivable
Subscriptions Receivable
Derivative Assets (Note 4)
Unrealized Appreciation on Open
Foreign Exchange Forward Contracts
$
Liabilities
Current Liabilities
Accrued Liabilities
Redemptions Payable
Distributions Payable
Payable for Investments Purchased
Derivative Liabilities (Note 4)
Unrealized Depreciation on Open
Foreign Exchange Forward Contracts
11,310,581
25,847
67,860
19,322
June 30,
2014
$
9,068,001
284
55,408
34,836
0
1,285
11,423,610
9,159,814
711
2,104
2,011
28,820
14,771
0
48,417
44,282
Net Assets Attributable to Holders
of Redeemable Units (Note 4)
$
11,375,193
$
9,115,532
Net Assets Attributable to Holders
of Redeemable Units – Per Series (Note 6)
Investor Series
Institutional Series
Premium Series
Advisor Series
F-Series
Premium F-Series
D-Series
O-Series
$
$
$
$
$
$
$
$
159,525
155,457
71,973
262,571
91,866
30,906
866
10,602,029
$
$
$
$
$
$
$
173,629
161,230
64,333
266,508
77,292
17,545
N/A
8,354,995
$
11,375,193
$
9,115,532
2014
Number of Redeemable Units Outstanding – Per Series
Investor Series
13,542,361
14,830,286
Institutional Series
14,815,922
15,460,791
Premium Series
6,671,493
6,001,433
Advisor Series
21,906,583
22,372,995
F-Series
7,654,580
6,482,028
Premium F-Series
2,904,245
1,660,367
D-Series
88,251
N/A
O-Series
845,897,806
671,104,055
Net Assets Attributable to Holders of Redeemable Units –
Per Series Unit (Note 4)
Investor Series
$
11.78
735
806
1
42,740
December 31,
2015
$
11.71
Institutional Series
$
10.49
$
10.43
Premium Series
$
10.79
$
10.72
Advisor Series
$
11.99
$
11.91
F-Series
$
12.00
$
11.92
Premium F-Series
$
10.64
$
10.57
D-Series
$
9.81
O-Series
$
12.53
N/A
$
12.45
The accompanying notes are an integral part of the interim financial report.
June 30, 2015
2
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
Statements of Comprehensive Income
(in 000s except per unit amounts
and number of units) for the periods ended June 30, 2015 and 2014 (Unaudited)
2015
Income
Foreign Exchange Gain (Loss) on Cash
$
Securities Lending Income
Net Gain (Loss) on Investments and Derivatives
Net Gain (Loss) on Investments
Interest for Distribution Purposes
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation
(Depreciation)
(1,247)
602
2014
$
2015
Increase (Decrease) in Net Assets Attributable to Holders
of Redeemable Units – Per Series
Investor Series
$
2,918
Institutional Series
$
3,500
Premium Series
$
1,069
Advisor Series
$
4,334
F-Series
$
1,557
Premium F-Series
$
327
D-Series
$
(2)
O-Series
$
183,158
(220)
515
173,197
37,340
129,863
18,777
52,148
178,840
Net Gain (Loss) on Investments
Net Gain (Loss) on Derivatives
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation
(Depreciation)
262,685
327,480
Net Gain (Loss) on Derivatives
$
(44,715)
(1,403)
(16,057)
(297)
(60,772)
(1,700)
196,861
2014
$
$
$
$
$
$
$
8,303
7,456
2,240
11,509
2,847
146
N/A
288,909
$
321,410
Weighted Average Units Outstanding for the Period – Per Series
Investor Series
14,098,216
17,950,390
Institutional Series
15,084,775
16,767,201
Premium Series
6,534,355
5,263,506
Total Net Gain (Loss) on Investments
and Derivatives
201,913
325,780
Advisor Series
22,100,194
25,056,511
Total Income (Net)
201,268
326,075
F-Series
7,161,836
5,745,264
Premium F-Series
2,121,212
402,616
D-Series
47,470
N/A
O-Series
763,288,070
531,727,084
Expenses (Note 7)
Management Fees
Administration Fees
Other Trust Fund Costs
Independent Review Committee Fees
Interest Charges
4,016
361
0
1
0
4,228
410
0
0
1
Total Expenses before Waivers
Less: Waived Expenses
4,378
(1)
4,639
(1)
Total Expenses (Net)
4,377
4,638
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units before Tax
Tax Reclaims (Withholding Taxes)
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units
$
196,891
321,437
(30)
196,861
Increase (Decrease) in Net Assets Attributable to Holders
of Redeemable Units – Per Series Unit (Note 4)
Investor Series
$
0.21
(27)
$
321,410
$
0.46
Institutional Series
$
0.23
$
0.44
Premium Series
$
0.16
$
0.43
Advisor Series
$
0.20
$
0.46
F-Series
$
0.22
$
0.50
Premium F-Series
$
0.15
$
0.36
D-Series
$
(0.05)
O-Series
$
0.24
$
0.54
N/A
The accompanying notes are an integral part of the interim financial report.
June 30, 2015
3
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units
(in 000s except number of units)
for the periods ended June 30, 2015 and 2014 (Unaudited)
Investor Series
2015
Net Assets Attributable to Holders of Redeemable
Units at Beginning of the Period
$
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units
Distributions to Holders of Redeemable Units
173,629
Institutional Series
2014
$
2015
232,121
$
161,230
Premium Series
2014
$
165,087
2015
$
64,333
2014
$
53,802
2,918
8,303
3,500
7,456
1,069
2,240
(1,671)
(1,379)
(2,407)
(2,093)
(858)
(501)
Redeemable Unit Transactions
Proceeds from Redeemable Units Issued
Reinvestments of Distributions to
Holders of Redeemable Units
Early Redemption Fees on Redeemable Units
Redemption of Redeemable Units
23,234
20,014
6,153
17,910
16,566
9,901
1,625
0
(40,210)
1,338
0
(72,947)
0
0
(13,019)
0
0
(19,474)
782
0
(9,919)
455
0
(10,463)
Net Increase (Decrease) from
Redeemable Unit Transactions
(15,351)
(51,595)
(6,866)
(1,564)
7,429
(107)
Net Increase (Decrease) in Net Assets
Attributable to Holders of Redeemable Units
(14,104)
(44,671)
(5,773)
3,799
7,640
1,632
Net Assets Attributable to Holders of
Redeemable Units at End of the Period
$
159,525
$
187,450
$
155,457
$
168,886
$
71,973
$
55,434
Redeemable Unit Transactions
Redeemable Units Outstanding,
Beginning of the Period
Redeemable Units Issued
Redeemable Units Issued on Reinvestments
Redeemable Units Redeemed
14,830,286
1,943,271
135,815
(3,367,011)
20,818,109
1,754,349
116,569
(6,403,497)
15,460,791
576,910
0
(1,221,779)
16,624,966
1,764,448
0
(1,911,423)
6,001,433
1,511,262
71,361
(912,563)
5,273,407
947,560
43,377
(1,000,956)
Redeemable Units Outstanding,
End of the Period
13,542,361
16,285,530
14,815,922
16,477,991
6,671,493
5,263,388
Advisor Series
2015
Net Assets Attributable to Holders of Redeemable
Units at Beginning of the Period
$
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units
266,508
F-Series
2014
$
2015
305,516
$
77,292
Premium F-Series
2014
$
64,299
2015
$
17,545
2014
$
1,206
4,334
11,509
1,557
2,847
327
146
(2,663)
(1,989)
(1,224)
(764)
(329)
(54)
35,685
35,717
33,018
22,975
16,652
6,093
2,360
0
(43,653)
1,732
0
(73,319)
951
0
(19,728)
587
0
(20,581)
284
0
(3,573)
50
0
(516)
Net Increase (Decrease) from
Redeemable Unit Transactions
(5,608)
(35,870)
14,241
2,981
13,363
5,627
Net Increase (Decrease) in Net Assets
Attributable to Holders of Redeemable Units
(3,937)
(26,350)
14,574
5,064
13,361
5,719
Distributions to Holders of Redeemable Units
Redeemable Unit Transactions
Proceeds from Redeemable Units Issued
Reinvestments of Distributions to
Holders of Redeemable Units
Early Redemption Fees on Redeemable Units
Redemption of Redeemable Units
Net Assets Attributable to Holders of
Redeemable Units at End of the Period
$
262,571
$
279,166
$
91,866
$
69,363
$
30,906
$
6,925
Redeemable Unit Transactions
Redeemable Units Outstanding,
Beginning of the Period
Redeemable Units Issued
Redeemable Units Issued on Reinvestments
Redeemable Units Redeemed
22,372,995
2,934,990
193,799
(3,595,201)
26,933,503
3,077,564
148,353
(6,320,821)
6,482,028
2,717,984
77,977
(1,623,409)
5,665,327
1,978,237
50,245
(1,773,054)
1,660,367
1,548,017
26,347
(330,486)
120,254
592,798
4,838
(49,959)
Redeemable Units Outstanding,
End of the Period
21,906,583
23,838,599
7,654,580
5,920,755
2,904,245
667,931
The accompanying notes are an integral part of the interim financial report.
June 30, 2015
4
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units
(in 000s except number of units)
for the periods ended June 30, 2015 and 2014 (Unaudited)
D-Series
Net Assets Attributable to Holders of Redeemable
Units at Beginning of the Period
$
2015
2014
O-Series
2015
N/A
(2)
N/A
183,158
288,909
196,861
321,410
Distributions to Holders of Redeemable Units
(4)
N/A
(167,621)
(96,219)
(176,777)
(102,999)
890
N/A
2,646,816
1,479,321
2,779,014
1,591,931
3
0
(21)
N/A
N/A
N/A
166,096
3
(581,418)
96,053
8
(222,020)
172,101
3
(711,541)
100,215
8
(419,320)
Net Increase (Decrease) from
Redeemable Unit Transactions
872
N/A
2,231,497
1,353,362
2,239,577
1,272,834
Net Increase (Decrease) in Net Assets
Attributable to Holders of Redeemable Units
866
N/A
2,247,034
1,546,052
2,259,661
1,491,245
$
$
10,602,029
$
$
5,615,444
866
N/A
Redeemable Unit Transactions
Redeemable Units Outstanding,
Beginning of the Period
Redeemable Units Issued
Redeemable Units Issued on Reinvestments
Redeemable Units Redeemed
7,161,496
N/A
89,965
380
(2,094)
N/A
N/A
N/A
N/A
671,104,055
207,221,811
13,052,043
(45,480,103)
474,036,335
122,070,311
7,885,297
(18,349,203)
Redeemable Units Outstanding,
End of the Period
88,251
N/A
845,897,806
585,642,740
$
$
9,115,532
2014
N/A
Net Assets Attributable to Holders of
Redeemable Units at End of the Period
8,354,995
2015
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units
Redeemable Unit Transactions
Proceeds from Redeemable Units Issued
Reinvestments of Distributions to
Holders of Redeemable Units
Early Redemption Fees on Redeemable Units
Redemption of Redeemable Units
$
Total
2014
11,375,193
$
$
6,437,475
7,928,720
The accompanying notes are an integral part of the interim financial report.
June 30, 2015
5
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
Statements of Cash Flows
(in 000s)
for the periods ended June 30, 2015 and 2014 (Unaudited)
2015
Cash Flows from (used in) Operating Activities
Increase (Decrease) in Net Assets Attributable
to Holders of Redeemable Units
$
Adjustment For:
Unrealized Foreign Exchange (Gain) Loss on Cash
Net Realized (Gain) Loss on
Sale of Investments and Derivatives
Net Change in Unrealized (Appreciation)
Depreciation of Investments and Derivatives
Purchase of Investments
Proceeds from Sale and/or Maturity
of Investments
(Increase) Decrease in Interest Receivable
Increase (Decrease) in Accrued Liabilities
196,861
2014
$
321,410
(1)
220
7,375
(17,374)
(36,091)
(47,662,060)
(178,543)
(7,877,935)
45,450,402
(12,522)
(24)
6,536,677
(6,509)
(117)
(2,056,060)
(1,222,171)
Cash Flows from (used in) Financing Activities
Distributions Paid to Holders of Redeemable Units,
Net of Reinvested Distributions
Proceeds from Issuances of Redeemable Units
Amounts Paid on Redemption of Redeemable
Units, Net of Redemption Fees
(2,666)
2,774,729
(1,974)
1,625,986
(690,441)
(401,587)
Net Cash from (used in) Financing Activities
2,081,622
1,222,425
1
25,562
284
(220)
254
632
Net Cash from (used in) Operating Activities
Unrealized Foreign Exchange Gain (Loss) on Cash
Net Increase (Decrease) in Cash
Cash (Bank Overdraft) at Beginning of the Period
Cash (Bank Overdraft) at End of the Period
Interest for Distribution Purposes Received*,
Net of Withholding Taxes
$
25,847
$
160,675
665
123,354
* Included as part of Cash Flows from (used in) Operating Activities.
The accompanying notes are an integral part of the interim financial report.
June 30, 2015
6
Semi-Annual Financial Report
n
No. of Shares
or Units/
Par Value Description
TD Canadian Core Plus Bond Fund
Schedule of Investment Portfolio
(in 000s except number of Shares
39,500,000
170,500,000
34,200,000
44,600,000
26,760,000
15,000,000
42,100,000
220,700,000
45,000,000
67,000,000
or Units/Par Value) as at June 30, 2015 (Unaudited)
No. of Shares
or Units/
Par Value Description
Cost
Fair Value
Canadian Bonds – 87.0%
FEDERAL BONDS & GUARANTEES – 18.8%
20,000,000
60,000,000
60,000,000
70,000,000
10,000,000
20,000,000
20,000,000
Canada Housing Trust No. 1
2.35% due December 15, 2018
1.2% due June 15, 2020
3.35% due December 15, 2020
3.80% due June 15, 2021
2.40% due December 15, 2022
2.90% due June 15, 2024
2.55% due March 15, 2025
$
20,651
59,522
65,505
78,654
10,481
21,486
21,326
Canada Post Corporation
6,200,000 4.08% due July 16, 2025
17,200,000
173,500,000
60,130,000
28,500,000
45,421,000
36,100,000
281,550,000
142,700,000
20,000,000
15,800,000
32,980,000
299,500,000
328,240,000
50,001,000
6,197
Government of Canada
1.25% due September 01, 2018
1.75% due March 01, 2019
3.75% due June 01, 2019
1.75% due September 01, 2019
3.50% due June 01, 2020
2.75% due June 01, 2022
1.50% due June 01, 2023
2.50% due June 01, 2024
2.25% due June 01, 2025
5.75% due June 01, 2029
5.75% due June 01, 2033
5.00% due June 01, 2037
4.00% due June 01, 2041
3.50% due December 01, 2045
$
20,953
59,810
66,256
79,285
10,439
21,395
20,727
17,619
181,105
67,383
29,773
51,090
39,600
282,069
153,332
21,029
22,990
50,471
439,973
435,099
62,980
2,030,788
2,140,650
$
AltaLink L.P.
460,000 5.243% due May 29, 2018
12,600,000 2.978% due November 28, 2022
PROVINCIAL BONDS & GUARANTEES – 16.0%
Hydro One Inc.
11,000,000 4.40% due June 01, 2020
5,000,000 5.49% due July 16, 2040
40,600,000 Callable 4.17% due June 06, 2044
Province of Ontario
4.40% due June 02, 2019
2.85% due June 02, 2023
6.50% due March 08, 2029
6.20% due June 02, 2031
5.60% due June 02, 2035
4.70% due June 02, 2037
4.60% due June 02, 2039
4.65% due June 02, 2041
3.50% due June 02, 2043
3.45% due June 02, 2045
1,814,307
472
12,600
512
13,188
20,395
24,746
61,581
29,919
62,862
64,494
61,305
46,016
58,046
60,000,000
16,000,000
47,100,000
48,000,000
37,400,000
50,800,000
86,000,000
21,000,000
48,700,000
93,900,000
The Bank of Nova Scotia
2.598% due February 27, 2017
4.10% due June 08, 2017
2.37% due January 11, 2018
2.242% due March 22, 2018
2.462% due March 14, 2019
2.13% due June 15, 2020
3.27% due January 11, 2021
Callable 6.65% due January 22, 2021
Callable 3.036% due October 18, 2024
2.58% due May 30, 2027
60,621
16,887
47,103
47,590
37,400
50,786
89,889
23,695
49,299
93,749
61,336
16,869
48,315
49,114
38,727
51,378
91,683
21,593
50,910
91,537
7,613
24,991
63,667
7,744
26,352
63,395
Bell Canada
3.60% due December 02, 2015
3.65% due May 19, 2016
3.50% due September 10, 2018
3.35% due June 18, 2019
3.25% due June 17, 2020
Callable 3.15% due September 29, 2021
20,284
29,731
25,498
28,467
35,884
73,468
20,185
29,570
26,421
29,569
36,658
75,738
BMO Capital Trust
21,900,000 Callable 4.633% due December 31, 2015
22,185
22,243
18,990
17,578
18,424
21,539
16,047
24,791
18,633
22,094
16,545
25,545
8,694
4,150
1,320
1,127
10,596
4,480
1,397
1,226
9,540
Province of British Columbia
3.25% due December 18, 2021
2.70% due December 18, 2022
5.70% due June 18, 2029
6.35% due June 18, 2031
4.70% due June 18, 2037
4.95% due June 18, 2040
4.30% due June 18, 2042
35,371
42,650
44,650
44,766
43,003
12,295
114,719
36,851
44,820
47,066
47,325
44,845
13,192
121,557
Province of Manitoba
30,000,000 4.25% due March 05, 2039
93,900,000 4.10% due March 05, 2041
64,000,000 4.05% due September 05, 2045
29,887
111,147
71,140
34,378
107,715
73,909
BMO Capital Trust II
13,800,000 Callable 10.221% due December 31, 2018
Province of New Brunswick
43,000,000 3.35% due December 03, 2021
103,800,000 2.85% due June 02, 2023
83,000,000 4.80% due June 03, 2041
44,605
102,571
104,465
46,878
108,284
103,948
18,300,000
21,540,000
16,100,000
24,800,000
77,156
75,509
June 30, 2015
1,721,540
20,339
25,829
59,948
30,438
59,794
60,875
61,968
47,193
57,262
8,822
Province of Newfoundland and Labrador
77,500,000 2.3% due June 02, 2025
44,381
178,935
48,581
63,088
36,627
18,665
52,059
276,747
47,474
70,364
Bank of Montreal
2.96% due August 02, 2016
5.45% due July 17, 2017
2.24% due December 11, 2017
6.02% due May 02, 2018
2.84% due June 04, 2020
3.40% due April 23, 2021
2.12% due March 16, 2022
Callable 6.17% due March 28, 2023
Callable 3.12% due September 19, 2024
12,407
6,314
42,848
33,700,000
42,600,000
35,000,000
32,700,000
35,600,000
10,000,000
100,000,000
$
20,000,000
22,800,000
60,200,000
26,500,000
60,000,000
60,000,000
61,900,000
41,000,000
56,100,000
11,077
5,237
40,559
Ontrea Inc.
8,821,657 4.619% due April 09, 2018
42,463
164,885
42,213
54,724
30,840
15,858
46,181
262,611
50,729
66,916
Fair Value
CORPORATE BONDS – 52.2%
7,272
16,677
173,397
66,188
28,821
50,297
38,617
261,017
143,304
20,984
21,355
45,475
403,471
414,313
63,050
Cost
bcIMC Realty Corporation
7,000,000 5.65% due January 05, 2018
25,000,000 2.96% due March 07, 2019
63,700,000 Callable 2.84% due June 03, 2025
20,000,000
29,000,000
25,000,000
28,000,000
35,000,000
73,300,000
8,080,000
3,550,000
1,250,000
1,100,000
7
BMW Canada Inc.
2.88% due August 09, 2016
2.39% due November 27, 2017
2.33% due May 23, 2018
2.33% due September 26, 2018
Bombardier Inc. (USD)
7.50% due March 15, 2018
7.75% due March 15, 2020
5.75% due March 15, 2022
6.125% due January 15, 2023
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
No. of Shares
or Units/
Par Value Description
Caisse centrale Desjardins
54,000,000 2.795% due November 19, 2018
75,500,000 1.748% due March 02, 2020
50,000,000
35,000,000
56,700,000
62,000,000
20,000,000
21,161,000
Canadian Imperial Bank of Commerce
2.65% due November 08, 2016
3.95% due July 14, 2017
2.35% due October 18, 2017
2.22% due March 07, 2018
2.35% due June 24, 2019
Callable 6.00% due June 06, 2023
Cost
$
54,543
75,500
Fair Value
$
50,982
36,910
58,095
63,477
20,697
23,805
Canadian Natural Resources Limited
68,300,000 2.89% due August 14, 2020
37,900,000 Callable 3.55% due June 03, 2024
69,054
37,761
70,012
38,408
Canadian Pacific Railway Company
15,000,000 6.25% due June 01, 2018
16,262
17,078
Capital Desjardins Inc.
15,000,000 5.187% due May 05, 2020
36,500,000 Callable 4.954% due December 15, 2026
17,300
38,808
17,115
41,795
Cascades Inc.
5,150,000 Callable 5.50% due July 15, 2021
5,150
5,107
Cascades Inc. (USD)
2,400,000 Callable 5.50% due July 15, 2022
2,582
2,911
Centre Street Trust
18,400,000 3.69% due June 14, 2021
18,400
19,117
CIBC Capital Trust
45,900,000 Callable 9.976% due June 30, 2019
59,946
59,160
Corus Entertainment Inc.
4,808,000 4.25% due February 11, 2020
4,799
4,737
Daimler Canada Finance Inc.
11,980,000 3.28% due September 15, 2016
22,400,000 2.27% due March 26, 2018
11,980
22,398
12,257
22,941
1,239
1,446
13,311
13,345
2,012
9,724
6,402
24,021
2,185
10,548
6,465
24,296
3,738
16,382
4,998
4,166
17,720
5,560
Eagle Credit Card Trust
13,200,000 3.474% due December 17, 2015
2,000,000
9,500,000
5,600,000
24,100,000
Enbridge Gas Distribution Inc.
5.16% due December 04, 2017
4.04% due November 23, 2020
Callable 4.77% due December 17, 2021
Callable 4.00% due August 22, 2044
Enbridge Pipelines Inc.
3,565,000 6.62% due November 19, 2018
15,900,000 4.49% due November 12, 2019
5,000,000 4.45% due April 06, 2020
Fairfax Financial Holdings Limited
50,000 7.375% due April 15, 2018
4,000,000 5.80% due May 15, 2021
9,350,000 6.40% due May 25, 2021
53
3,934
9,398
70
5,331
10,653
21,930
22,537
First Capital Realty Inc.
4,600,000 5.70% due November 30, 2017
4,715
5,035
Ford Credit Canada Limited
7.50% due August 18, 2015
2.10% due December 01, 2016
4.875% due February 08, 2017
3.32% due December 19, 2017
3,640
60,495
11,627
24,694
3,368
61,040
11,459
24,831
Finning International Inc.
20,000,000 6.02% due June 01, 2018
3,345,000
60,500,000
10,900,000
23,900,000
June 30, 2015
Cost
FortisBC Inc.
28,100,000 Callable 4.00% due October 28, 2044
56,361
75,228
50,582
36,903
56,744
61,038
20,781
24,226
Domtar Corporation (USD)
1,000,000 10.75% due June 01, 2017
No. of Shares
or Units/
Par Value Description
29,500,000
33,000,000
33,855,000
25,000,000
43,900,000
18,100,000
12,000,000
$
GE Capital Canada Funding Company
3.35% due November 23, 2016
4.55% due January 17, 2017
5.53% due August 17, 2017
4.40% due February 08, 2018
2.42% due May 31, 2018
3.55% due June 11, 2019
4.60% due January 26, 2022
Glacier Credit Card Trust
2,100,000 3.158% due November 20, 2015
$
28,630
30,868
35,499
37,694
26,663
43,674
18,337
12,284
30,386
34,690
36,896
26,988
45,271
19,522
13,781
2,098
2,117
Golden Credit Card Trust
15,580,000 3.51% due May 15, 2016
15,580
15,912
Honda Canada Finance Inc.
24,000,000 2.275% due December 11, 2017
18,600,000 2.35% due June 04, 2018
31,200,000 1.631% due August 12, 2019
23,972
18,600
31,200
24,552
19,113
31,225
HSBC Bank Canada
2.901% due January 13, 2017
3.558% due October 04, 2017
2.491% due May 13, 2019
2.938% due January 14, 2020
1.816% due July 07, 2020
2.908% due September 29, 2021
61,042
60,887
51,500
67,328
57,723
54,500
61,348
61,864
53,217
70,475
57,480
56,710
Institutional Mortgage Securities Canada Inc.
3,803,911 Callable 3.69% due April 12, 2020
3,900,000 Callable 4.697% due February 12, 2021
3,788
3,900
4,016
4,414
Iron Mountain Canada Operations ULC
1,400,000 Callable 6.125% due August 15, 2021
59,900,000
59,000,000
51,500,000
67,100,000
57,800,000
54,500,000
1,400
1,454
John Deere Canada Funding Inc.
14,600,000 1.95% due April 12, 2017
14,800,000 2.65% due July 16, 2018
14,590
14,798
14,785
15,376
The Manufacturers Life Insurance Company
24,100,000 Callable 2.64% due January 15, 2025
69,800,000 2.10% due June 01, 2025
24,099
69,797
24,906
69,766
Manulife Financial Capital Trust II
21,610,000 Callable 7.405% due December 31, 2019
24,080
26,538
Master Credit Card Trust
13,600,000 3.502% due May 21, 2016
10,300,000 2.626% due January 21, 2017
13,600
10,300
13,889
10,526
1,667
3,584
1,817
3,434
Merrill Lynch Financial Assets Inc.
1,808,979 Callable 4.621% due November 12, 2015
3,401,835 Callable 4.85% due December 12, 2015
8
28,081
Fair Value
47,000,000
52,500,000
67,000,000
31,200,000
54,580,000
National Bank of Canada
3.58% due April 26, 2016
2.702% due December 15, 2016
1.951% due December 11, 2017
1.742% due March 03, 2020
Callable 3.261% due April 11, 2022
48,572
53,782
67,000
31,153
55,552
47,939
53,610
68,015
31,106
56,239
24,800,000
15,400,000
19,300,000
18,700,000
North West Redwater Partnership/
NWR Financing Co. Ltd.
Callable 2.10% due February 23, 2022
Callable 3.20% due July 22, 2024
Callable 3.70% due February 23, 2043
Callable 4.05% due July 22, 2044
24,750
15,376
19,328
18,824
24,616
15,934
18,536
19,051
Northland Power Solar Finance One L.P.
14,702,582 4.397% due June 30, 2032
14,705
15,356
NOVA Chemicals Corporation (USD)
3,670,000 Callable 5.25% due August 01, 2023
3,866
4,670
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
No. of Shares
or Units/
Par Value Description
22,700,000
37,000,000
20,300,000
44,300,000
17,800,000
OMERS Realty Corporation
2.498% due June 05, 2018
3.203% due July 24, 2020
2.971% due April 05, 2021
3.358% due June 05, 2023
3.328% due November 12, 2024
Open Text Corporation (USD)
12,555,000 Callable 5.625% due January 15, 2023
Cost
$
22,700
37,366
20,300
43,967
17,800
15,913
Fair Value
$
23,461
39,448
21,376
46,818
18,539
26,646
28,239
25,409
26,923
Real Estate Asset Liquidity Trust
Callable 4.437% due February 12, 2016
Callable 4.61% due November 12, 2016
Callable 4.782% due March 12, 2017
2.356% due January 12, 2025
3.239% due May 12, 2025
9
2,864
2,367
18,323
18,798
289
3,291
2,746
18,534
19,009
Resolute Forest Products Inc. (USD)
10,700,000 Callable 5.875% due May 15, 2023
12,198
12,228
RioCan Real Estate Investment Trust
12,840,000 3.80% due March 01, 2017
17,200,000 3.62% due June 01, 2020
53,400,000 3.746% due May 30, 2022
13,005
17,451
53,831
13,307
18,126
55,729
19,800,000
34,600,000
16,200,000
35,730,000
7,960,000
Rogers Communications Inc.
5.80% due May 26, 2016
5.38% due November 04, 2019
4.70% due September 29, 2020
5.34% due March 22, 2021
4.00% due June 06, 2022
21,462
38,191
16,481
38,692
7,928
20,552
39,409
18,056
41,058
8,531
46,000,000
54,400,000
50,000,000
50,000,000
55,000,000
60,600,000
61,250,000
84,800,000
55,800,000
Royal Bank of Canada
2.26% due March 12, 2018
2.82% due July 12, 2018
2.89% due October 11, 2018
2.98% due May 07, 2019
2.86% due March 04, 2021
1.968% due March 02, 2022
Callable 2.99% due December 06, 2024
Callable 2.48% due June 04, 2025
Callable 3.45% due September 29, 2026
45,588
54,618
50,531
50,139
54,953
60,600
61,781
84,784
56,593
47,083
56,679
52,299
52,734
57,486
59,322
63,905
84,643
57,930
400
408
30,560
30,319
Russel Metals Inc.
400,000 Callable 6.00% due April 19, 2022
Scotiabank Tier 1 Trust
25,000,000 Callable 7.802% due June 30, 2019
7,000,000
7,000,000
14,940,000
45,000,000
Shaw Communications Inc.
6.15% due May 09, 2016
5.70% due March 02, 2017
5.65% due October 01, 2019
5.50% due December 07, 2020
7,756
7,474
16,074
50,886
7,273
7,473
17,109
51,871
Sherritt International Corporation
1,876,170 Callable 8.00% due November 15, 2018
1,935
1,846
Sun Life Capital Trust II
4,000,000 Callable 5.863% due December 31, 2019
4,000
4,671
Suncor Energy Inc.
50,516,000 Callable 3.1% due November 26, 2021
51,300
52,767
TD Capital Trust III*
46,000,000 Callable 7.243% due December 31, 2018*
55,930
54,292
TD Capital Trust IV*
5,850,000 Callable 9.523% due June 30, 2019
8,100,000 Callable 6.631% due June 30, 2021
June 30, 2015
25,000,000
8,870,000
36,700,000
53,600,000
76,400,000
15,564
RBC Capital Trust
25,000,000 Callable 4.87% due December 31, 2015
23,500,000 Callable 6.821% due June 30, 2018
286,969
3,165,000
2,610,000
18,323,354
18,800,000
No. of Shares
or Units/
Par Value Description
Cost
TELUS Corporation
4.95% due March 15, 2017
5.05% due December 04, 2019
5.05% due July 23, 2020
Callable 3.20% due April 05, 2021
Callable 2.35% due March 28, 2022
$
27,002
9,957
40,623
54,413
76,036
Fair Value
$
26,461
10,032
41,628
55,786
74,565
Thomson Reuters Corporation
9,500,000 Callable 3.309% due November 12, 2021
9,500
9,870
The Toronto-Dominion Bank*
2.948% due August 02, 2016
1.693% due April 02, 2020
Callable 3.367% due November 02, 2020
Callable 2.692% due June 24, 2025
Callable 4.779% due December 14, 2105
Callable 5.763% due December 18, 2106
35,593
67,400
24,482
83,500
31,725
60,480
35,692
67,256
24,158
84,104
31,373
59,393
Toyota Credit Canada Inc.
4,800,000 3.55% due February 22, 2016
25,600,000 2.75% due July 18, 2018
19,800,000 2.80% due November 21, 2018
4,795
25,596
19,794
4,875
26,636
20,692
TransCanada PipeLines Limited
7,000,000 4.65% due October 03, 2016
7,455
7,294
Trinidad Drilling Ltd. (USD)
5,500,000 Callable 7.875% due January 15, 2019
35,000,000
67,400,000
24,000,000
83,500,000
30,000,000
54,000,000
5,590
6,904
Union Gas Limited
12,300,000 Callable 4.20% due June 02, 2044
12,292
12,662
Valeant Pharmaceuticals International Inc.
16,000,000 Callable 6.75% due August 15, 2018
3,000,000 Callable 7.50% due July 15, 2021
19,055
3,949
20,996
4,042
Ventas Canada Finance Limited
38,500,000 3.00% due September 30, 2019
36,400,000 Callable 3.30% due February 01, 2022
38,390
36,397
39,841
37,320
Vermilion Energy Inc.
6,350,000 Callable 6.50% due February 10, 2016
6,493
6,380
Videotron Ltee
1,200,000 Callable 6.875% due July 15, 2021
1,294
1,288
5,400,000
13,300,000
29,000,000
18,100,000
41,900,000
VW Credit Canada Inc.
3.60% due February 01, 2016
2.90% due June 01, 2017
2.45% due November 14, 2017
2.80% due August 20, 2018
2.50% due October 01, 2019
5,395
13,300
28,948
18,084
41,877
5,474
13,693
29,750
18,847
43,340
68,250,000
35,000,000
63,300,000
71,100,000
Wells Fargo Financial Canada Corporation
2.774% due February 09, 2017
2.78% due November 15, 2018
2.944% due July 25, 2019
3.04% due January 29, 2021
69,236
34,990
63,744
72,045
69,892
36,553
66,554
74,680
West Edmonton Mall Property Inc.
21,100,000 4.309% due February 13, 2024
Total Canadian Bonds
21,100
22,723
5,831,011
5,939,481
9,583,339
9,894,438
2,234
2,499
3,526
3,578
Global Bonds – 10.3%
FRANCE – 0.0%
Numericable Group SA (USD)
2,025,000 Callable 6.00% due May 15, 2022
GERMANY – 0.0%
7,787
8,543
7,454
9,847
Unitymedia Hessen GmbH & Co KG/
Unitymedia NRW GmbH (USD)
2,800,000 Callable 5.5% due January 15, 2023
9
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
No. of Shares
or Units/
Par Value Description
Cost
No. of Shares
or Units/
Par Value Description
Fair Value
CenturyLink Inc. (USD)
3,275,000 5.625% due April 01, 2020
9,250,000 6.45% due June 15, 2021
80,000 5.80% due March 15, 2022
LUXEMBOURG – 0.0%
The Nielsen Co Luxembourg SARL (USD)
1,500,000 Callable 5.5% due October 01, 2021
$
1,939
$
1,899
MEXICO – 0.1%
CEMEX SAB de CV (USD)
5,834,000 Callable 9.50% due June 15, 2018
1,450,000 Callable 6.50% due December 10, 2019
7,361
1,907
8,052
1,905
9,268
9,957
NETHERLANDS – 0.2%
Schaeffler Finance BV (USD)
15,700,000 Callable 4.25% due May 15, 2021
17,455
19,217
4,195
4,456
Fiat Chrysler Automobiles NV (USD)
9,780,000 4.50% due April 15, 2020
12,375
12,185
UNITED STATES – 9.6%
The ADT Corporation (USD)
9,325,000 2.25% due July 15, 2017
5,600,000 6.25% due October 15, 2021
AECOM Technology Corp. (USD)
12,700,000 Callable 5.75% due October 15, 2022
The AES Corporation (USD)
1,022,000 8.00% due June 01, 2020
750,000
1,500,000
1,800,000
11,620,000
1,300,000
Ally Financial Inc. (USD)
5.50% due February 15, 2017
6.25% due December 01, 2017
3.75% due November 18, 2019
7.50% due September 15, 2020
4.125% due February 13, 2022
American Greetings Corporation (USD)
2,110,000 Callable 7.375% due December 01, 2021
Ashland Inc. (USD)
7,700,000 Callable 3.875% due April 15, 2018
4,325,000 Callable 4.75% due August 15, 2022
Ball Corporation (USD)
1,900,000 4.00% due November 15, 2023
Best Buy Co., Inc. (USD)
3,000,000 5.00% due August 01, 2018
13,975,000 Callable 5.50% due March 15, 2021
Calpine Corporation (USD)
10,425,000 Callable 6.00% due January 15, 2022
936,000 Callable 7.875% due January 15, 2023
Case New Holland Inc. (USD)
3,000,000 7.25% due January 15, 2016
8,650,000 7.875% due December 01, 2017
CBRE Services Inc. (USD)
17,730,000 Callable 5.00% due March 15, 2023
CCO Holdings LLC/
CCO Holdings Capital Corporation (USD)
6,325,000 Callable 5.125% due May 01, 2023
CCO Holdings LLC/
CCO Holdings Capital Corp. (USD)
10,850,000 Callable 7.375% due June 01, 2020
CEMEX Finance LLC (USD)
5,550,000 Callable 9.375% due October 12, 2022
June 30, 2015
10,650
7,054
11,562
7,379
15,468
16,100
1,290
1,481
811
2,033
2,223
14,874
1,566
979
2,005
2,237
16,944
1,563
2,163
2,777
8,800
4,726
1,960
3,836
13,923
2,213
3,972
18,190
12,153
1,053
13,835
1,268
3,932
9,671
3,841
11,884
20,500
22,477
7,703
7,702
12,972
14,348
7,067
7,742
4,111
11,698
96
1,470
2,784
2,729
6,465
6,685
582
2,573
7,860
7,289
638
2,642
CIT Group Inc. (USD)
5.00% due May 15, 2017
4.25% due August 15, 2017
6.625% due April 01, 2018
5.50% due February 15, 2019
2,215
2,525
3,029
14,276
2,453
2,542
3,654
16,511
Constellation Brands Inc. (USD)
7.25% due September 01, 2016
3.875% due November 15, 2019
6.00% due May 01, 2022
4.25% due May 01, 2023
5,325
113
11,368
3,876
6,546
127
11,567
4,379
Crown Americas LLC/
Crown Americas Capital Corp. III (USD)
8,885,000 Callable 6.25% due February 01, 2021
10,063
11,624
Crown Castle International Corp. (USD)
9,425,000 4.875% due April 15, 2022
4,150,000 5.25% due January 15, 2023
10,820
4,551
11,919
5,240
Dana Holding Corporation (USD)
9,950,000 Callable 5.375% due September 15, 2021
750,000 Callable 5.5% due December 15, 2024
12,756
955
12,785
925
Denali Borrower LLC/Denali Finance Corp. (USD)
13,425,000 Callable 5.625% due October 15, 2020
15,709
17,669
CHS/Community Health Systems Inc. (USD)
Callable 5.125% due August 15, 2018
Callable 8.00% due November 15, 2019
Callable 5.125% due August 01, 2021
Callable 6.875% due February 01, 2022
DISH DBS Corporation (USD)
3,300,000 4.25% due April 01, 2018
5,500,000 7.875% due September 01, 2019
3,894
7,605
4,204
7,635
Elizabeth Arden Inc. (USD)
3,400,000 Callable 7.375% due March 15, 2021
3,665
3,461
Endo Health Solutions Inc. (USD)
2,205,000 Callable 7.00% due December 15, 2020
2,447
2,760
10,247
2,185
4,018
1,738
10,945
2,292
4,156
1,576
1,732
6,307
4,222
224
322
1,719
7,093
4,575
257
373
8,334
2,956
8,321
9,488
4,059
10,629
14,076
17,028
8,100,000
1,769,000
3,175,000
1,200,000
Frontier Communications Corporation (USD)
8.125% due October 01, 2018
7.125% due March 15, 2019
8.50% due April 15, 2020
9.25% due July 01, 2021
1,300,000
5,534,000
3,548,000
200,000
300,000
Gannett Co., Inc. (USD)
10.00% due April 01, 2016
Callable 7.125% due September 01, 2018
5.125% due October 15, 2019
Callable 5.125% due July 15, 2020
Callable 4.875% due September 15, 2021
The Goodyear Tire & Rubber Company (USD)
7,240,000 Callable 8.25% due August 15, 2020
2,708,000 8.75% due August 15, 2020
7,800,000 Callable 7.00% due May 15, 2022
H.J. Heinz Company (USD)
13,350,000 Callable 4.25% due October 15, 2020
10
$
1,256
4,950,000
100,000
8,475,000
3,550,000
9,918
5,321
3,828
10,795
105
Chrysler Group LLC/CG Co-Issuer Inc. (USD)
2,000,000 8.25% due June 15, 2021
1,900,000
2,000,000
2,750,000
12,650,000
UNITED KINGDOM – 0.1%
$
Fair Value
CF Industries Inc. (USD)
1,045,000 6.875% due May 01, 2018
6,125,000
5,525,000
500,000
2,000,000
SWEDEN – 0.0%
Eileme 2 AB (USD)
3,200,000 Callable 11.625% due January 31, 2020
Cost
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
No. of Shares
or Units/
Par Value Description
HCA Inc. (USD)
100,000 4.25% due October 15, 2019
3,950,000 6.50% due February 15, 2020
3,000,000 5.875% due March 15, 2022
Cost
$
The Hertz Corporation (USD)
7,450,000 Callable 6.75% due April 15, 2019
Hilton Worldwide Finance LLC/
Hilton Worldwide Finance Corporation (USD)
16,725,000 Callable 5.625% due October 15, 2021
Hologic Inc. (USD)
13,364,000 Callable 6.25% due August 01, 2020
1,550,000 Callable 5.25% due July 15, 2022
Hughes Satellite Systems Corporation (USD)
6,030,000 6.50% due June 15, 2019
IAC/InterActiveCorp (USD)
5,300,000 Callable 4.875% due November 30, 2018
3,900,000 Callable 4.75% due December 15, 2022
6,150,000
1,750,000
3,700,000
3,800,000
2,000,000
International Lease Finance Corporation (USD)
8.625% due September 15, 2015
5.75% due May 15, 2016
8.75% due March 15, 2017
6.25% due May 15, 2019
8.625% due January 15, 2022
Iron Mountain Incorporated (USD)
1,436,000 Callable 8.375% due August 15, 2021
1,000,000 Callable 6.00% due August 15, 2023
112
5,052
3,911
Fair Value
$
128
5,526
4,084
8,339
9,625
20,829
21,802
15,094
1,896
17,276
1,982
6,166
8,200
5,857
4,063
6,694
2,237
5,164
4,706
2,689
No. of Shares
or Units/
Par Value Description
660,000
1,912,000
1,450,000
1,226,000
2,500,000
1,200,000
6,851
4,792
7,787
2,243
5,068
5,144
3,057
R.R. Donnelley & Sons Company (USD)
8.60% due August 15, 2016
7.25% due May 15, 2018
8.25% due March 15, 2019
7.625% due June 15, 2020
7.875% due March 15, 2021
6.50% due November 15, 2023
3,218
3,259
SBA Telecommunications Inc. (USD)
13,530,000 Callable 5.75% due July 15, 2020
15,948
17,596
Sinclair Television Group Inc. (USD)
11,575,000 Callable 5.375% due April 01, 2021
12,405
14,620
Sirius XM Holdings Inc. (USD)
1,100,000 Callable 4.25% due May 15, 2020
1,351
1,370
Sirius XM Radio Inc. (USD)
11,100,000 Callable 5.875% due October 01, 2020
500,000 Callable 5.25% due August 15, 2022
300,000 Callable 6.00% due July 15, 2024
12,931
652
332
14,245
655
379
Six Flags Entertainment Corporation (USD)
14,294,000 Callable 5.25% due January 15, 2021
15,682
18,344
6,628
6,690
2,344
13,187
2,571
14,730
Smithfield Foods Inc. (USD)
5,000,000 Callable 6.625% due August 15, 2022
15,140
1,410
17,466
1,429
10,866
7,275
973
12,893
8,315
1,248
8,082
390
8,752
434
Lear Corporation (USD)
17,055,000 Callable 4.75% due January 15, 2023
19,998
21,089
Levi Strauss & Co. (USD)
1,750,000 Callable 6.875% due May 01, 2022
2,389
2,344
MetroPCS Wireless Inc. (USD)
2,500,000 Callable 6.625% due November 15, 2020
2,883
3,255
Nielsen Finance LLC/Nielsen Finance Co. (USD)
3,325,000 Callable 4.50% due October 01, 2020
13,519,000 Callable 5.00% due April 15, 2022
3,686
15,345
4,148
16,611
NRG Energy Inc. (USD)
400,000 7.625% due January 15, 2018
1,480,000 Callable 8.25% due September 01, 2020
10,300,000 Callable 7.875% due May 15, 2021
T-Mobile US Inc. (USD)
1,125,000 Callable 6.464% due April 28, 2019
9,300,000 Callable 6.542% due April 28, 2020
4,700,000 Callable 6.25% due April 01, 2021
444
1,983
12,582
549
1,941
13,765
Peabody Energy Corporation (USD)
12,225,000 6.00% due November 15, 2018
1,200,000 6.50% due September 15, 2020
300,000 6.25% due November 15, 2021
13,292
1,336
219
7,405
517
129
PVH Corp. (USD)
10,475,000 Callable 4.50% due December 15, 2022
11,426
13,018
June 30, 2015
Spectrum Brands Inc. (USD)
1,950,000 Callable 6.75% due March 15, 2020
11,100,000 Callable 6.375% due November 15, 2020
Spirit AeroSystems Holdings Inc. (USD)
125,000 Callable 6.75% due December 15, 2020
147
164
Sprint Capital Corporation (USD)
3,750,000 6.90% due May 01, 2019
4,487
4,789
Sprint Corporation (USD)
6.00% due December 01, 2016
9.125% due March 01, 2017
8.375% due August 15, 2017
7.00% due August 15, 2020
6.00% due November 15, 2022
1,415
2,126
4,714
7,315
2,272
1,414
2,338
5,624
7,767
2,289
Steel Dynamics Inc. (USD)
11,200,000 Callable 6.125% due August 15, 2019
500,000 Callable 5.125% due October 01, 2021
14,488
544
14,793
629
Sun Merger Sub Inc. (USD)
7,507,000 Callable 5.25% due August 01, 2018
1,521,000 Callable 5.875% due August 01, 2021
8,425
2,004
9,540
1,966
1,248
10,905
6,090
1,451
12,191
6,032
TRW Automotive Inc. (USD)
4,400,000 7.25% due March 15, 2017
2,975,000 4.50% due March 01, 2021
4,751
3,395
6,080
3,758
United States Steel Corporation (USD)
3,100,000 6.05% due June 01, 2017
2,600,000 7.00% due February 01, 2018
4,250,000 7.375% due April 01, 2020
3,417
3,329
4,397
4,046
3,483
5,574
1,100,000
1,725,000
4,150,000
6,250,000
2,000,000
11
887
2,663
2,078
1,727
3,536
1,519
3,140
12,900
Lamar Media Corp. (USD)
6,738,000 Callable 5.875% due February 01, 2022
350,000 Callable 5.00% due May 01, 2023
$
3,117
10,658
L Brands Inc. (USD)
9,075,000 7.00% due May 01, 2020
6,028,000 6.625% due April 01, 2021
945,000 5.625% due February 15, 2022
777
1,934
2,055
1,211
3,570
1,334
SBA Communications Corporation (USD)
2,500,000 Callable 5.625% due October 01, 2019
1,856
1,310
Jarden Corporation (USD)
12,800,000 7.50% due May 01, 2017
1,100,000 Callable 6.125% due November 15, 2022
$
Fair Value
Reynolds Group Issuer Inc. (USD)
2,400,000 Callable 6.875% due February 15, 2021
1,618
1,029
Jabil Circuit Inc. (USD)
9,090,000 8.25% due March 15, 2018
Cost
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
No. of Shares
or Units/
Par Value Description
Cost
United States Treasury
Inflation-Indexed Bonds (USD)
78,000,000 0.125% due April 15, 2019
75,000,000 1.375% due February 15, 2044
99,393
111,025
$
ZF North America Capital Inc. (USD)
5,400,000 4.5% due April 29, 2022
Fair Value
99,669
100,218
$
6,735
6,632
1,018,506
1,089,857
10,374
13,185
SUPRANATIONALS – 0.3%
Asian Development Bank
11,000,000 4.65% due February 16, 2027
Inter-American Development Bank
20,000,000 4.40% due January 26, 2026
Total Global Bonds
19,662
23,288
30,036
36,473
1,099,534
1,180,121
231,900
231,900
4,122
4,122
236,022
236,022
10,918,895
11,310,581
0
(14,771)
79,245
79,383
$ 10,998,140
$ 11,375,193
Short-Term Investments – 2.1%
Bank of Montreal
231,900,000 0.70% due July 02, 2015
The Bank of Nova Scotia (USD)
3,300,000 0.10% due July 02, 2015
Total Short-Term Investments
TOTAL INVESTMENT
PORTFOLIO – 99.4%
FORWARD CONTRACTS
(SCHEDULE 1) – (0.1%)
OTHER NET ASSETS
(LIABILITIES) – 0.7%
TOTAL NET ASSETS – 100.0%
* Related party to the Fund as an affiliated entity
of TD Asset Management Inc.
Schedule 1
Foreign Exchange Forward Contracts (in 000s except contract price and total number of contract(s))
Settlement
Date
July
July
July
July
31,
31,
31,
31,
Currency to be
Delivered
2015
2015
2015
2015
260,353
200,058
167,411
161,749
USD
USD
USD
USD
July 31, 2015
July 31, 2015
109,696
57,433
USD
USD
Canadian Value
as at
June 30, 2015
$
$
Currency to be
Received
325,324
249,982
209,188
202,113
321,263
246,884
206,598
199,676
CAD
CAD
CAD
CAD
137,070
71,765
135,374
70,876
CAD
CAD
1,195,442
$
321,263
246,884
206,598
199,676
135,374
70,876
$
TOTAL NUMBER OF CONTRACT(S): 7
June 30, 2015
Canadian Value
as at
June 30, 2015
Contract
Price
1.23395
1.23406
1.23408
1.23407
to 1.23952
1.23408
1.23407
1,180,671
NET DEPRECIATION
12
CAD
Depreciation
$
(4,061)
(3,098)
(2,590)
(2,437)
(1,696)
(889)
$
(14,771)
$
(14,771)
Semi-Annual Financial Report
n
TD Canadian Core Plus Bond Fund
(C) Brokerage Commissions and Soft Dollars (in 000s)
for the six-month periods ended June 30, 2015 and 2014 (Note 4 and 7)
Not applicable for the Fund.
Fund-Specific Notes to the Interim Financial Report (Unaudited)
(A) The Fund (Note 1)
(I) The Fund start date was September 4, 2007.
(D) Tax Loss Carry Forwards (in 000s)
as at December 31, 2014 (Note 8)
None for the Fund.
(II) TDAM is the manager, portfolio adviser and trustee of the Fund. TDIS is
the principal distributor of the Investor Series units of the Fund.
(III) The presentation and functional currency of the Fund is the
Canadian dollar.
(E) Securities Lending and Collateral Held (in 000s)
as at June 30, 2015, and December 31, 2014 (Note 4)
(IV) The investment objective of the Fund is to earn a high rate of interest
income by investing primarily in Canadian dollar denominated, investmentgrade debt instruments issued by Canadian governments and corporations.
In seeking to achieve this objective, the Fund invests mainly in the Canadian
debt market, and from time to time, in non-Canadian and/or non-investmentgrade debt instruments to enhance total return by using rigorous bottom-up
security selection in regard to the macro environment.
June 30,
2015
December 31,
2014
Fair Value of Securities Lent
$ 1,365,275
$ 1,075,451
Fair Value of Collateral Held
1,436,469
1,134,565
(V) D-Series was launched on February 10, 2015.
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.
(B) Management Fees and Administration Fees (Note 7)
(F) Financial Risk Management (Note 9)
(I) MANAGEMENT FEES (%)
(I) INTEREST RATE RISK
for the six-month periods ended June 30, 2015 and 2014
The table below summarizes the Fund’s exposure to interest rate risk as at
June 30, 2015 and December 31, 2014 by remaining term to maturity. The
table also illustrates the potential impact to the Fund’s net assets had the
prevailing interest rates changed by 1 percent, assuming a parallel shift in
the yield curve, with all other variables held constant. The Fund’s sensitivity
to interest rate changes was estimated using the weighted average duration
of the bond portfolio. In practice, the actual trading results may differ from
these approximate sensitivity analysis amounts and the differences could
be material.
Actual
(exclusive of GST and HST)
Series
Investor Series
Institutional Series
Premium Series
Advisor Series
F-Series
Premium F-Series
D-Series
O-Series
Maximum
2015
2014
1.25
0.75
1.00
1.25
0.75
0.50
1.00
0.00
1.21
0.43
1.00
1.21
0.60
0.50
1.00
0.00
1.21
0.43
1.00
1.21
0.60
0.50
N/A
0.00
Total Exposure (in 000s)
Term to Maturity
Bonds
The amount payable (in 000s) to TDAM as at June 30, 2015 for
management fees is $589 (2014: $609) which is included in Accrued
Liabilities on the Statements of Financial Position.
(II) ADMINISTRATION FEES
The Fund also pays TDAM an administration fee at an annual rate of 0.15%
of the NAV of each of the Investor, Advisor Series and D-Series, calculated
daily and paid monthly.
June 30,
2015
Less than 1 year
1-5 years
5-10 years
> 10 years
$
Total
$ 11,074,559
$ 8,730,697
Impact on Net Assets (000s)
$
$
Impact on Net Assets (%)
259,662
4,048,041
3,954,120
2,812,736
December 31,
2014
749,194
6.59
$
138,279
3,438,203
2,920,437
2,233,778
600,554
6.59
The amount payable (in 000s) to TDAM as at June 30, 2015 for
administration fees is $52 (2014: $58) which is included in Accrued
Liabilities on the Statements of Financial Position.
June 30, 2015
13
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
Fund-Specific Notes to the Interim Financial Report
(II) CURRENCY RISK
(V) FINANCIAL INSTRUMENTS BY THE LEVEL IN THE FAIR VALUE HIERARCHY
The table below indicates the foreign currencies to which the Fund had
exposure as at June 30, 2015 and December 31, 2014 in Canadian dollar
terms, including the impact of the underlying principal amount of forward
currency contracts, if any. The table also illustrates the potential impact
to the Fund’s net assets if the Fund’s functional currency, the Canadian dollar,
had strengthened or weakened by 5 percent in relation to all 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.
(in 000s)
The table below illustrates the classification of the Fund’s financial
instruments within the fair value hierarchy as at June 30, 2015 and
December 31, 2014.
Impact on
Net Assets* (in 000s)
Total Exposure* (in 000s)
Currency
June 30,
2015
December 31,
2014
June 30,
2015
$
0
63,092
$
27
53,171
$
0
3,155
$
1
2,659
Total
$
63,092
$
53,198
$
3,155
$
2,660
0.55
0.58
0.03
$
Forward Contracts
December 31,
2014
Euro
United States Dollar
As Percentage of
Net Assets (%)
June 30, 2015
Short-Term Investments
Bonds
December 31, 2014
Short-Term Investments
Bonds
Forward Contracts
0.03
Level 1
Level 2
0
0
$ 236,022
11,074,559
0
11,310,581
Level 3
$
0
0
Total
$
0
236,022
11,074,559
11,310,581
0
(14,771)
0
(14,771)
$
0
$11,295,810
$
0
$ 11,295,810
$
0
0
0
$
337,304
8,730,697
1,285
$
0
0
0
$
$
0
$ 9,069,286
$
0
$ 9,069,286
337,304
8,730,697
1,285
* Includes both monetary and non-monetary instruments, where applicable.
During the periods, transfers between Level 1 and Level 2 were nil.
(III) OTHER PRICE RISK
(VI) RECONCILIATION OF LEVEL 3 FAIR VALUE MEASUREMENTS (in 000s)
Not applicable for the Fund.
Not applicable for the Fund.
(IV) CREDIT RISK
(VII) CONTRACTUAL MATURITIES ANALYSIS FOR FINANCIAL LIABILITIES
The table below summarizes the debt instruments by credit ratings as at
June 30, 2015 and December 31, 2014.
As at June 30, 2015 and December 31, 2014, the Fund’s net assets are
due on demand. All other financial liabilities of the Fund are due in less
than three months.
Percentage of
Total Bonds (%)
Credit Rating°
June 30,
2015
December 31,
2014
Percentage of
Total Net Assets (%)
June 30,
2015
December 31,
2014
AAA
AA
A
BBB
BB
B
CCC
25.70
30.27
20.94
13.83
5.21
3.98
0.07
26.63
29.06
20.41
14.20
5.46
4.24
0.00
25.02
29.47
20.39
13.46
5.07
3.87
0.07
25.51
27.82
19.55
13.60
5.23
4.06
0.00
Total
100.00
100.00
97.35
95.77
° Credit ratings are obtained from Standard & Poor’s, Moody’s or DBRS rating agencies.
June 30, 2015
14
Semi-Annual Financial Report
TD Canadian Core Plus Bond Fund
Fund-Specific Notes to the Interim Financial Report
(G) Investment Portfolio Concentration (%)
As at June 30, 2015 and December 31, 2014, the Fund’s investment
portfolio concentration can be summarized as follows:
June 30,
2015
Canadian Bonds
Federal Bonds & Guarantees
Provincial Bonds & Guarantees
Corporate Bonds
Global Bonds
Cayman Islands
France
Germany
Luxembourg
Mexico
Netherlands
Sweden
United Kingdom
United States
Supranationals
Short-Term Investments
Forward Contracts
Other Net Assets (Liabilities)
December 31,
2014
18.8
16.0
52.2
20.4
15.8
50.6
0.0
0.0
0.0
0.0
0.1
0.2
0.0
0.1
9.6
0.3
2.1
(0.1)
0.7
0.1
0.0
0.1
0.0
0.1
0.2
0.0
0.0
8.1
0.4
3.7
0.0
0.5
100.0
100.0
(H) Interest in Unconsolidated Structured Entities (Note 4)
Not applicable for the Fund.
(I) Offsetting of Financial Assets and Liabilities (in 000s) (Note 4)
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, 2015 and
December 31, 2014, and shows in the Net Amount column what the impact would be on the Fund’s
Statements of Financial Position if all set-off rights were exercised.
Amounts
Net Amounts
Gross Amounts Set-Off on the
Presented on
of Recognized
Statements the Statements
Financial Assets
of Financial
of Financial
(Liabilities)
Position
Position
June 30, 2015
Derivative Assets
$
Derivative Liabilities
December 31, 2014
Derivative Assets
Derivative Liabilities
June 30, 2015
0
$
(14,771)
$
1,285
0
0
$
0
$
0
0
0
Related Amounts Not
Set-Off on the Statements
of Financial Position
Financial
Instruments
$
(14,771)
$
1,285
0
Cash
0
$
0
$
0
Net Amount
$
0
0
$
0
0
0
15
0
(14,771)
$
1,285
0
Semi-Annual Financial Report
n
Notes to the Interim Financial Report
(Unaudited)
1. The Fund
4. Summary of Significant Accounting Policies
The TD Mutual Fund Trusts (collectively, the “Funds” and individually,
the “Fund”) are open-end mutual funds established under the laws of
Ontario and are governed by the Amended, Consolidated and Restated
Declarations of Trust dated as of January 15, 2015 (“Declarations of
Trust”), as amended from time to time.
(I) FINANCIAL INSTRUMENTS
The Fund recognizes financial instruments at fair value upon initial
recognition, plus transaction costs in the case of financial instruments
not measured at FVTPL. Regular way purchases and sales of financial
instruments are recognized at their trade date. The Fund’s non-derivative
investments, which are designated at FVTPL, and derivative assets and
liabilities, which are classified as held for trading (“HFT”), are measured
at FVTPL.
TD Asset Management Inc. (“TDAM”) is the manager, portfolio adviser
and trustee of the Funds. TDAM, TDAM USA Inc., TD Investment Services
Inc. (“TDIS”), and Epoch Investment Partners, Inc. (“Epoch”) are whollyowned subsidiaries of The Toronto-Dominion Bank (“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.
All other financial assets and liabilities are measured at amortized cost.
Under this method, financial assets and liabilities reflect the amount
required to be received or paid, discounted, when appropriate, at the
contract’s effective interest rate.
The financial year-end for the Funds is December 31. For the Statements
of Financial Position, “as at” represents June 30, 2015 and December
31, 2014 (unless the Fund was created in 2015 in which case “as at”
for the earliest period presented represents the Fund’s date of inception).
For the Statements of Comprehensive Income, Changes in Net Assets
Attributable to Holders of Redeemable Units and Cash Flows in the year
a fund or series is established, “period” represents inception to June 30;
in all other cases, period represents the six months ended June 30. A
comparative Statement of Financial Position has only been presented in
the financial statements for any period end for which the Fund or series
was in existence as at that date.
The Fund has determined that it meets the definition of an ‘investment
entity’ and as a result, it measures 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 manage ment 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 judgment
that the Fund has made in determining that it meets this definition is
that fair value is the primary measurement attribute used to measure
and evaluate the performance of substantially all of its investments.
The Fund’s investments may also include associates and joint ventures
which are designated at FVTPL.
Each of the Fund’s start date as indicated in the Fund-Specific Notes to
the Interim Financial Report is the date the Fund commenced operations
or in the case of a new series, the date the series was first offered and
not the inception date.
The Fund’s 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 Fund’s only contractual obligation.
Consequently, the Fund’s outstanding redeemable units are classified as
financial liabilities in accordance with the requirements of International
Accounting Standards (“IAS”) 32, “Financial Instruments: Presentation”
(“IAS 32”). The Fund’s obligations for Net Assets Attributable to Holders
of Redeemable Units are presented at the redemption amount.
This interim financial report was authorized for issue by TDAM on
August 12, 2015.
This interim financial report should be read in conjunction with the Fund’s
annual financial statements for the period ended December 31, 2014.
2. Significant Events
On January 15, 2015 the existing D-Series of the Funds prior to that
date were redesignated to C-Series.
The Fund’s accounting policies for measuring the fair value of its
investments and derivatives are substantially similar to those used in
measuring its 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 accordance with IFRS. As at
all dates presented, there were no differences between the Fund’s NAV
per series unit and net assets per series unit.
3. Basis of Presentation
This interim financial report has been prepared in compliance with
International Financial Reporting Standards (“IFRS”) as published by the
International Accounting Standards Board (“IASB”). This financial report
has 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”).
June 30, 2015
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(e) The Fund may use foreign exchange forward contracts to hedge
against or profit from fluctuations in foreign exchange rates. These
contracts are valued based on the difference between the contract
rates and current market rates for the foreign currency at the
measurement date. The net change in unrealized appreciation or
depreciation and the net realized gains or losses from closing out
contracts are reflected in the Statements of Comprehensive Income
as part of Net Gain (Loss) on Derivatives.
(II) 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) are based on quoted market prices at the
close of trading on the reporting date. The Fund uses 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
Fund’s policy is to recognize transfers into and out of the fair value
hierarchy levels as of the date of the event or change in circumstances
giving rise to the transfer.
(f) The Fund may enter into a forward contract to obtain exposure to
a specific type of investment without actually investing directly in
such investment. These contracts are valued based on the difference
between the contract rate and the current market rate for the
underlying investment, at the measurement date. The unrealized gain
or loss 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 Derivatives.
The fair value of financial assets and liabilities that are not traded in
an active market, including over-the-counter derivatives, is determined
using valuation techniques. The Fund uses a variety of methods and
makes assumptions that are based on market conditions existing at
each reporting date. Valuation techniques include the use of comparable
recent arm’s length transactions, reference to other instruments that
are substantially the same, discounted cash flow analysis, option pricing
models and other techniques commonly used by market participants and
which make the maximum use of observable inputs.
(g) The Fund may purchase standardized, exchange-traded futures
contracts. Any outstanding futures contracts as at June 30, 2015 are
listed in the Schedule of Investment Portfolio. 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 amounts receivable (payable) from settlement of
futures contracts are reflected in the Statements of Financial Position
as Futures Margin Receivable (Payable). 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 Fund.
The valuation methodology for specific types of investments held by
the Fund 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. Debt instruments are
valued based on mid prices, where readily available.
(h) 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) on derivatives. When options
are closed, 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
part of Net Gain (Loss) on Derivatives.
(b) Short-term debt instruments 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 reported in Interest for Distribution Purposes in the Statements
of Comprehensive Income.
(i) Investments in underlying funds are generally valued at the NAV
per series unit of the underlying funds as reported by the underlying
funds’ managers.
(d) Mortgages are valued using TD’s prevailing rate of return on new
mortgages of similar type and term. Mortgages are purchased from
TD and other related parties such as the Canada Trustco Mortgage
Company and the Canada Trust Company. In consideration of the
services and facilities provided, the seller of each mortgage receives
a liquidity fee. As applicable, liquidity fees paid during the period are
disclosed in the Fund-Specific Notes to the Interim Financial Report.
The liquidity fee is deferred and amortized over the remaining term
to maturity of the mortgages purchased and are reported, where
applicable, in Interest for Distribution Purposes in the Statements of
Comprehensive Income.
June 30, 2015
(j) The exchange-traded funds (ETF) are valued based on quoted market
prices at the close of trading on the reporting date.
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(III) INTEREST IN UNCONSOLIDATED STRUCTURED ENTITIES
(IV) OFFSETTING FINANCIAL ASSETS AND LIABILITIES
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 funds
(including ETF) in which the Fund invests are unconsolidated structured
entities. In making this determination, TDAM evaluated the fact that
decision making about the underlying funds’ activities are generally not
governed by voting or similar rights held by the Fund and other investors
in any underlying funds.
Financial assets and liabilities are offset and the net amount reported
in the Statements of Financial Position where the Fund has 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 all other situations they are presented on a
gross basis. In the normal course of business, the Fund may enter into
various master netting agreements or other similar arrangements 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 Fund-Specific
Notes to the Interim Financial Report.
The Fund may invest in underlying funds whose investment objectives
range from achieving short- to long-term income and capital growth
potential. Underlying funds may use leverage in a manner consistent
with their respective investment objectives or as permitted by
Canadian securities regulatory authorities. Underlying funds finance
their operations by issuing redeemable units which are puttable at the
holder’s option and entitles the holder to a proportionate stake in the
respective fund’s net assets. The Fund’s interests in underlying funds
as at June 30, 2015 and December 31, 2014, held in the form of
redeemable units, are included at their fair value in the Statements of
Financial Position, which represent the Fund’s maximum exposure in
these underlying funds. The Fund does not provide and has not commit ted 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 periods is included in Net Change in Unrealized
Appreciation (Depreciation) in the Statements of Comprehensive Income
in Net Gain (Loss) on Investments. Additional information on the Fund’s
interest in underlying funds, where applicable, is provided in the FundSpecific Notes to the Interim Financial Report.
(V) TRANSLATION OF FOREIGN CURRENCIES
The Fund’s functional currency, as disclosed in the Fund-Specific Notes
to the Interim Financial Report, 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 translated into the functional currency
using the exchange rates prevailing at the dates that transactions occur.
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 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.
(VI) CASH
The Fund may also invest in mortgage-related and other asset-backed
securities. These securities include mortgage pass-through securities,
collateralized mortgage obligations, commercial mortgage-backed
securities, asset-backed securities, collateralized debt obligations and
other securities that directly or indirectly represent a participation in, or
are secured by and payable from, mortgage loans on real property. The
debt and equity securities issued by these securities may include tranches
with varying levels of subordination. The Fund may also 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.
Cash is comprised of deposits with financial institutions. Bank overdrafts
are shown under current liabilities in the Statements of Financial Position.
(VII) MARGIN
Margin represents margin deposits held with brokers in respect of
open exchange-traded futures contracts.
(VIII) INVESTMENT TRANSACTIONS AND TRANSACTION COSTS
The cost of each investment security (excluding transaction costs),
realized and unrealized gains and losses from investment transactions
are determined on an average cost basis.
Transaction costs, such as brokerage commissions, incurred by the Fund
in the purchase and sale of investments at fair value are recognized
in the Statements of Comprehensive Income in the period incurred.
Commissions paid, where applicable, are described in the Fund-Specific
Notes to the Interim Financial Report. No transaction costs are incurred
when the Fund invests in underlying funds. However, the underlying
funds’ investments may be subject to transaction costs.
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.
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, 2015 and December 31, 2014, the fair value of mortgage
related and other asset-backed securities of the Fund, where applicable,
is disclosed in the Statements of Financial Position. This amount
represents the maximum exposure to losses at that date. The change
in fair value of mortgage related and other asset backed securities are
included in the Statements of Comprehensive Income in Net Gain (Loss)
on Investments.
June 30, 2015
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(Unaudited)
(IX) REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
(XIII) INCOME RECOGNITION
The Fund may enter into repurchase transactions and reverse repurchase
transactions. A repurchase transaction is where a Fund sells a security
that it owns to a party for cash and agrees to buy the same security
back from the same party at a specified price on an agreed future date.
In a reverse repurchase transaction, the 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
included as Net Gain (Loss) on Investments in the Statements of
Comprehensive Income.
Interest for Distribution Purposes as shown on the Statements of
Comprehensive Income includes interest income from cash and the
coupon interest on debt instruments accounted for on an accrual basis.
Interest Receivable is shown separately in the Statements of Financial
Position based on the debt instruments’ stated rates of interest. The
Fund does not amortize premiums paid or discounts received on the
purchase of debt securities except for zero coupon bonds which are
amortized on a straight line basis.
Dividends are recognized as income on the ex-dividend date.
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 the Fund. 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 the Fund,
where applicable, are listed in the Schedule of Investment Portfolio.
Distributions received from any underlying funds in the form of
interest, foreign income and related withholding taxes, Canadian
dividends, realized capital gains and return of capital are recognized
when declared.
(XIV) SECURITIES LENDING AND COLLATERAL HELD
The Fund 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 collateral held is determined daily. Aggregate securities on loan and
related collateral held by the Fund are provided in the Fund-Specific
Notes to the Interim Financial Report.
(X) RECEIVABLE FOR INVESTMENT SOLD/PAYABLE FOR INVESTMENT 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.
(XI) IMPAIRMENT OF FINANCIAL ASSETS
At each reporting date, the Fund assesses whether there is objective
evidence that a financial asset at amortized cost is impaired. If such
evidence exists, the Fund recognizes an impairment loss as the difference
between the amortized cost of the financial asset and the present value
of the estimated future cash flows, discounted using the instrument’s
original effective interest rate. Impairment losses on financial assets at
amortized cost are reversed in subsequent periods if the amount of the
loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognized.
(XV) ALLOCATION OF INCOME AND EXPENSES, REALIZED
AND UNREALIZED GAINS (LOSSES)
Expenses are accrued on a daily basis; separately for each series
(excluding interest charges and portfolio transaction costs), while
income, gains and losses are allocated to each series based on their
respective Net Assets Attributable to Holders of Redeemable Units.
(XVI) INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS
OF REDEEMABLE UNITS – PER SERIES UNIT
(XII) VALUATION OF SERIES UNITS
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 period.
TDAM generally calculates the Net Assets Attributable to Holders of
Redeemable Units for each series of the Fund as at 4 p.m Eastern Time
on each day that the Toronto Stock Exchange is open for trading.
However, in some unusual circumstances, the series NAV per unit may be
calculated at another time where it is in the best interests of unitholders
to do so.
The NAV is calculated, for processing purchase, switch, conversion or
redemption orders of series units, for each series of units of the Fund
by taking the series’ proportionate share of the Fund’s common assets
less that series’ proportionate share of the Fund’s 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 Fund by the total
number of units outstanding of that series at the reporting date.
June 30, 2015
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(Unaudited)
5. Critical Accounting Estimates and Judgments
(XVII) ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED
(a) The final version of IFRS 9, “Financial Instruments” (“IFRS 9”)
The preparation of financial statements requires management to use
judgment in applying its accounting policies and to make estimates
assumptions about the future. The following discusses the most
significant accounting judgments and estimates that the Fund has made
in preparing the financial statements:
was issued by the IASB in July 2014 and will replace IAS 39,
“Financial Instruments: Recognition and Measurement” (“IAS 39”).
IFRS 9 introduces a model for classification and measurement, a single,
forward-looking ‘expected loss’ impairment model and a substantially
reformed approach to hedge accounting. The new single, principle based
approach for determining the classification of financial assets is driven
by cash flow characteristics and the business model in which an asset
is held. The new model also results in a single impairment model being
applied to all financial instruments, which will require more timely
recognition of expected credit losses. It also includes changes in respect
of own credit risk in measuring liabilities elected to be measured at fair
value, so that gains caused by the deterioration of an entity’s own credit
risk on such liabilities are no longer recognized in profit or loss. IFRS 9
is effective for annual periods beginning on or after January 1, 2018,
however it is available for early adoption. In addition, the own credit
changes can be early applied in isolation without otherwise changing
the accounting for financial instruments. The Fund is in the process of
assessing the impact of IFRS 9 and has not yet determined when it will
adopt the new standard.
(I) FAIR VALUE MEASUREMENT OF DERIVATIVES AND SECURITIES
NOT QUOTED IN AN ACTIVE MARKET
The Fund may hold financial instruments that are not quoted in active
markets, including derivatives. As described in Note 4, 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 date of financial
statements. Changes in assumptions about these factors could affect the
reported fair values of financial instruments. Refer to the Fund-Specific
Notes to the Interim Financial Report for further information about the
fair value measurement of the Fund’s financial instruments.
(II) CLASSIFICATION AND MEASUREMENT OF INVESTMENTS
AND APPLICATION OF THE FAIR VALUE OPTION
In classifying and measuring financial instruments held by the Fund,
TDAM is required to make significant judgments about whether or not
the business of the Fund is to invest on a total return basis for the
purpose of applying the fair value option for financial assets under IAS
39. The most significant judgments made include the determination
that certain investments are HFT and that the fair value option can be
applied to those which are not.
(b) IFRS 15, “Revenue from Contracts with Customers” (“IFRS 15”) is a
new standard effective for periods beginning on or after January 1, 2018,
which will supersede IAS 18, “Revenue, and Related Interpretations” .
The Fund is in the process of assessing the impact of IFRS 15.
(III) INVESTMENT ENTITY
In determining whether the Fund is an investment entity, TDAM may be
required to make significant judgments about whether the Fund has the
typical characteristics of an investment entity. The 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, the 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.
June 30, 2015
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Notes to the Interim Financial Report
(Unaudited)
6. Redeemable Units
Each Fund 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, the Fund is also authorized to issue 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 the Fund are as described below.
Investor Series:
H-Series:
Premium Series:
K-Series:
e-Series:
D-Series:
Advisor Series:
T-Series:
F-Series:
S-Series:
Premium F-Series:
W-Series:
Private Series:
Institutional Series:
Q-Series:
C-Series
O-Series:
Offered on a no-load basis to investors.
Offered on a no-load basis to investors who wish to receive a regular monthly cash flow from the Fund.
Monthly distributions may consist of net income, net realized capital gains and/or a return of capital.
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.
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 Fund. Monthly distributions may consist of net income, net realized capital gains, and/or a
return of capital.
Offered on a no-load basis to investors who want to complete their transactions electronically.
Offered on a no-load basis to investors who want to complete their transactions through TD Direct
Investing, a division of TD Waterhouse Canada Inc., or other discount brokers.
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.
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 Fund. Monthly distributions may consist of net income, net realized capital gains and/or a
return of capital.
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.
Offered to investors who wish to receive a regular monthly cash flow from the Fund, through
fee-based financial advisors or dealer-sponsored “wrap accounts”. This series may also be offered
to other investors 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.
Offered to large 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. For this series,
investors must make the required minimum investment, as determined by TDAM from time to time.
Offered to investors, through certain wealth management businesses of TD Bank Group, including
certain divisions of TD Waterhouse Canada Inc. (“TDW”), or other dealers authorized by TDAM,
who pay an annual fee to their dealer instead of transactional sales charges.
Offered on a no-load basis to large investors who make the required minimum investment as
determined by TDAM, and have entered into a Private Series agreement with TDAM.
Offered on a no-load basis to large investors, such as group savings plans and others who make
the required minimum investment, as determined by TDAM from time to time.
Offered on a no-load basis to large investors such as group savings plans and others who wish to
receive a regular monthly cash flow from the Fund, and who make the required minimum investment,
as determined by TDAM from time to time. Monthly distributions may consist of net income, net
realized capital gains and/or a return of capital.
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.
Offered on a no-load basis to large investors who make the required minimum investment as
determined by TDAM, and have entered into O-Series agreement with TDAM.
Each individual series of units is sold under differing purchase options and may have higher or lower management fees based on
their specific attributes, as summarized above, reflecting the extent of the investment advice provided. The management fee rates
for the Fund and its various series are provided in the Fund-Specific Notes to the Interim Financial Report.
Units of the Fund are redeemable at the option of the unitholder in accordance with the provisions of the Declarations of Trust.
Units of the Fund are issued or redeemed on a daily basis at the NAV per series unit next determined after the purchase, switch,
conversion order or redemption request, respectively, is received by TDAM. Purchases and redemptions include units exchanged
from one series to another series within a Fund.
June 30, 2015
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Notes to the Interim Financial Report
(Unaudited)
No administration fee is charged with respect to other series of the Fund
according to the simplified prospectus.
7. Related Party Transactions
(I) INTEREST IN UNDERLYING FUNDS
The Fund may hold series of units of other funds managed by TDAM.
Information on the Fund’s interest in underlying funds, where applicable,
is provided in the Fund-Specific Notes to the Interim Financial Report.
(V) OPERATING EXPENSES
Except in respect of Private Series units of the Fund and Advisor Series
of TD U.S. Equity Portfolio, TDAM pays all of the operating expenses for
the Fund (including services provided by TDAM or affiliates of TDAM),
other than expenses associated with taxes, borrowing, the Fund’s
Independent Review Committee (“IRC”), compliance with any new
governmental and regulatory requirements (“Trust Fund Costs”).
(II) SEED CAPITAL
TDAM has contributed a nominal amount to certain series of the Fund
as seed capital. The contribution by TDAM, where applicable, is provided
in the Fund-Specific Notes to the Interim Financial Report.
TDAM pays the operating expenses with respect to O-Series units of
the Fund.
(III) MANAGEMENT FEES
In consideration for the provision of management, distribution and
portfolio management services and oversight of any portfolio subadvisory services provided to the Fund, TDAM receives an annual
management fee in respect of certain series of the Fund. The manage ment fee is calculated and accrued on a daily basis for each series
based on the NAV of that series of the Fund and paid monthly to TDAM.
Where a Fund invests in any underlying funds, there are fees and
expenses payable by the underlying funds in addition to those paid by
the Fund. However, there is no duplication of management fees.
The Fund pays applicable goods and services tax and harmonized sales
tax on management fees, administration fees and certain operating
expenses, for which the Fund is responsible, based on the province or
territory of residence of the unitholders in each series of the Fund.
TDAM, at its discretion, may waive or absorb a portion of the operating
expenses otherwise payable by the Fund. These waivers or absorptions
may be terminated at any time without notice. The amount of expenses
waived or absorbed is disclosed in the Statements of Comprehensive
Income as Waived Expenses, where applicable.
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.
(VI) IRC
TDAM is responsible for management of the Fund’s investment portfolio,
including the making of decisions relating to the investment of the
Fund’s assets. TDAM has established an IRC in respect of the Fund 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 has approved standing instructions
to permit the Fund and/or underlying funds managed by TDAM to enter
into the following securities transactions:
The maximum management fee is the maximum fee that can be charged
to each series of units of the Fund according to the simplified prospectus.
TDAM may charge a management fee that is less than the management
fee TDAM is otherwise entitled to charge each series of units of the Fund.
The actual management fee is the annualized fee that was charged to
each series of the Fund for the reporting period. TDAM may charge the
maximum management fee without notice to unitholders. Actual and
maximum management fees for each series of the Fund are provided in
the Fund-Specific Notes to the Interim Financial Report. The management
fees payable to TDAM as at June 30, 2015 and December 31, 2014 are
included in Accrued Liabilities on the statements of financial position.
(a) trades in securities of TD or any affiliate or associate thereof;
(b) investments in the securities of an issuer where TD Securities Inc.,
TDW, 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;
(c) purchases or sales of securities of an issuer from or to another
investment fund or discretionary managed account managed by
TDAM; and
(d) purchases of securities from or sales of securities to a Related Dealer,
where it acted as principal.
(IV) ADMINISTRATION FEES
In consideration for paying certain operating expenses, TDAM is paid
an annual administration fee with respect to certain series of the Fund.
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 for each series based on the NAV of that series of the Fund and
paid monthly to TDAM. The annual administration fees for each series
of the Fund, where applicable, are provided in the Fund-Specific Notes
to the Interim Financial Report.
The relevant standing instructions require that securities transactions
with related parties conducted by TDAM (i) are free from any influence
by an entity related to TDAM and without taking into account any
consideration relevant to an entity related to TDAM; (ii) represent the
business judgment of TDAM uninfluenced by considerations other than
the best interests of the Fund and/or underlying funds; (iii) comply with
the applicable policies and procedures of TDAM; and (iv) achieve a fair
and reasonable result for the Fund and/or underlying funds.
The administration fee is payable in respect of Investor Series, H-Series,
K-Series, D-Series, Advisor Series and T-Series of each Fund, as applicable, other than the money market funds, TD Ultra Short Term Bond Fund,
TD Short Term Bond Fund, TD Canadian Bond Fund, the index funds, the
target return funds and Advisor Series units of TD U.S. Equity Portfolio.
The administration fee is also payable in respect of Premium Series of
each Fund, as applicable, 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 Capital Yield Fund and the target return funds.
June 30, 2015
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Notes to the Interim Financial Report
(Unaudited)
9. Financial Risk Management
(VII) BROKERAGE COMMISSIONS AND SOFT DOLLARS
Brokerage commissions (including other transaction costs) paid on
securities transactions and amounts paid to related parties of TD
for brokerage services provided to the Fund for the periods ended
June 30, where applicable, are disclosed in the Fund-Specific Notes to
the Interim Financial Report.
(I) Financial Risk Factors
The Fund is exposed to a variety of financial risks: 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. The Fund’s overall risk management program seeks to
maximize the returns derived for the level of risk to which the Fund is
exposed and seeks to minimize potential adverse effects on the Fund’s
financial performance.
Client brokerage commissions are used as payment for order execution
services 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.
TDAM seeks to reduce financial risks by employing experienced portfolio
advisers who invest within the limits as outlined in the Fund’s investment
objectives and investment strategies and applicable TDAM policies
and procedures (collectively referred to as “Investment Restrictions”).
Investment Restrictions are designed for the Fund’s exposure to be
prudently diversified across geography, sector and issuer, as applicable.
TDAM Risk Management uses a compliance monitoring system to
independently monitor the Fund’s Investment Restrictions and implement
an escalation process for exceptions, where warranted.
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 Fund is not generally ascertainable. Any ascertainable
soft dollar value received as a percentage of total brokerage commissions
paid under the soft dollar arrangement entered into by the portfolio
advisers or TDAM, where applicable, is disclosed in the Fund-Specific
Notes to the Interim Financial Report.
TDAM Risk Management conducts regular reviews of the Fund’s exposure
and, where appropriate, holds meetings with TDAM portfolio advisers
to discuss portfolio positioning and risk reports. In addition, TDAM Risk
Management performs on-site due diligence visits to third-party subadviser of the Fund, where applicable. TDAM Investment Performance
Oversight Committee meets as required to review management style,
processes and fund statistics, including performance and levels of risk.
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 underlying funds are disclosed in
the underlying funds’ semi-annual financial report, where ascertainable.
If the 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. Since different types of investments tend to
move independently from one another, positive performance in one asset
class can help offset negative performance in another, thereby reducing
volatility and overall risk in the long-term. The Fund is managed in
accordance with its investment objectives, generally within specific asset
class ranges as set out in the Fund’s simplified prospectus. The Fund
follows a long-term strategic asset allocation plan, which involves setting
an asset allocation policy, selecting investments for each asset class and
periodically rebalancing the asset allocation of the Fund in accordance
with its investment objectives. In addition, TDAM portfolio advisers also
apply active asset allocation strategy for the Fund which incorporates its
short- to medium-term view of asset classes, where applicable.
8. Taxation
The Fund qualifies, or intends to qualify if launched during the current
period, as a mutual fund trust under the Income Tax Act (Canada). All
or substantially all of the net income for tax purposes and sufficient net
capital gains realized in any period are distributed to unitholders such
that no income tax is payable by the Fund. As a result, the Fund has
determined that it is in substance not taxable and therefore, does not
record income taxes. Since the Fund does not record income taxes, the
tax benefit of capital and non-capital losses have not been reflected in
the Statements of Financial Position as deferred income tax assets. The
Fund’s capital and/or non-capital losses, where applicable, are provided
in the Fund-Specific Notes to the Interim Financial Report. Capital losses
have no expiry. Non-Capital losses can be carried forward for up to
twenty years.
(a) Market Risk
The Fund currently incurs 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.
June 30, 2015
(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. The Fund’s exposure to interest rate risk is concentrated in
its investments in debt instruments (such as bonds, debentures and
mortgages) 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.
23
Semi-Annual Financial Report
n
Notes to the Interim Financial Report
(Unaudited)
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.
If the 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. The Fund’s exposure to interest rate risk,
where significant, is disclosed in the Fund-Specific Notes to the Interim
Financial Report.
The 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.
Where applicable, the portfolio adviser reviews the Fund’s overall
interest rate sensitivity as part of the investment management process.
The Fund and the underlying funds only buy and hold short-term
notes with a minimum R1- Low credit rating by Dominion Bond Rating
Service (“DBRS”) or an equivalent rating from another recognized
credit rating agency. The credit risk from the use of counterparties for
foreign exchange forward contracts is, where applicable, minimized by:
(ii) Currency Risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. The Fund may hold
assets denominated in currencies other than its functional currency. The
Fund is therefore exposed to currency risk, as the value of the securities
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.
(i) using counterparties with a minimum credit rating of A by
Standard & Poor’s (“S&P”) 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.
The Fund may enter into foreign exchange forward contracts for hedging
purposes to reduce its foreign currency exposure or to establish exposure
to foreign currencies.
The Fund that invests in underlying funds 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.
The Fund may engage in securities lending transactions with counterparties that have a minimum credit rating of A by S&P or an equivalent
rating from another credit agency. The value of cash or securities held as
collateral by the Fund in connection with these transaction 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 Fund’s exposure to currency risk, where significant, is disclosed in
the Fund-Specific Notes to the Interim Financial Report.
The Fund’s investments in short-term and reverse repurchase agreement
debt instruments, by ratings categories, where applicable, are disclosed
in the Fund-Specific Notes to the Interim Financial Report.
Where applicable, the portfolio adviser reviews the Fund’s currency
positions as part of the investment management process.
(iii) Other Price Risk
Where applicable, the portfolio adviser reviews the Fund’s credit
positions as part of the investment management process.
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. 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 on the Statements of
Financial Position. Possible losses from written options and equities sold
short can be unlimited.
(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. The Fund is
exposed to daily cash redemptions of redeemable units. Units are
redeemable on demand at the then current NAV per series unit at the
option of the unitholder. As required by applicable securities legislation,
the Fund maintains at least 85 percent of its assets in liquid investments
(i.e. investments that are traded in active markets and can be readily
disposed of). In addition, the Fund retains sufficient cash and cash equivalents to maintain liquidity, and has the ability to borrow up to 5 percent
of its NAV for the purpose of funding redemptions. The contractual
maturities analysis for the Fund’s financial liabilities, where applicable,
is disclosed in the Fund-Specific Notes to the Interim Financial Report.
If the Fund invests in underlying funds, it is exposed to indirect other
price risk in the event that the underlying funds invest in securities that
trade on a market.
The Fund’s impact from exposure to other price risk, where applicable,
is disclosed in the Fund-Specific Notes to the Interim Financial Report.
(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, the Fund’s main credit risk concentration is in debt
instruments and derivative instruments it holds. The Fund’s exposure to
credit risk is the risk that an issuer of investments 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
June 30, 2015
The Fund may hold securities that are not traded in an active market
and may be illiquid.
Within the limits of the Investment Restrictions, the Fund may, from time
to time, invest in derivative contracts which are traded over the counter
(i.e. not traded in an organized market) and may be illiquid.
24
Semi-Annual Financial Report
n
Notes to the Interim Financial Report
(Unaudited)
The determination of what constitutes ‘observable’ requires significant
judgment. 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.
(d) Concentration Risk
Concentration risk arises as a result of the concentration of exposures
within the same category, whether it is geographical location, product
type, industry sector or counterparty type. The Fund’s concentration risk
is disclosed in the Fund-Specific Notes to the Interim Financial Report.
TDAM has set up a Global Fair Value Committee to oversee the
performance of the fair value measurements included in the financial
statements of the Fund, including Level 3 measurements. The
committee meets regularly to perform detail reviews of the valuations
of investments held by the Fund.
(II) Capital Risk Management
Units issued and outstanding represent the capital of the Fund. The Fund
does not have any specific capital requirements on the subscription and
redemption of units, other than certain minimum subscription require ments. Changes in the Fund’s capital during the 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 Fund in accordance with the Fund’s investment objectives and for
managing liquidity in order to meet redemption requests.
The classification of the Fund’s financial instruments within the fair value
hierarchy as at June 30, 2015 and December 31 2014, and any transfers
between levels during the period as a result of changes in the lowest
level input that is significant to the fair value measurement are disclosed
in Fund-Specific Notes to the Interim Financial Report, where applicable.
(III) Fair Value Hierarchy
The Fund classifies its investment 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
Level 2
Level 3
If applicable, the most recent financial statements of the underlying
funds are available, without charge, by writing to:
TD Mutual Funds
Quoted (unadjusted) prices in active markets for identical
assets or liabilities;
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
Inputs that are not based on observable market data
(that is, unobservable inputs).
c/o TD Asset Management Inc.
P.O. Box 100
66 Wellington Street West
TD Bank Tower
Toronto-Dominion Centre
Toronto, Ontario
M5K 1G8
All fair value measurements are recurring. The carrying values of Cash,
Subscriptions Receivable, Interest Receivable, Dividends Receivable,
Receivable for Investments Sold, Payable for Investments Purchased,
Redemptions Payable, Distributions Payable, Accrued Liabilities and the
Fund’s 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
derivative 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 its fair value requires the use of
significant unobservable inputs, in which case it is classified as Level 3.
Currency codes used throughout the report:
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
judgment, considering factors specific to the asset or liability.
June 30, 2015
25
Currency Code
Description
AUD
CAD
CHF
DKK
EUR
GBP
HKD
ILS
JPY
MXN
MYR
NOK
NZD
SEK
SGD
THB
USD
ZAR
Australian Dollar
Canadian Dollar
Swiss Franc
Danish Krone
Euro
British Pound
Hong Kong Dollar
Israeli Shekel
Japanese Yen
Mexican Peso
Malaysian Ringgit
Norwegian Krone
New Zealand Dollar
Swedish Krona
Singapore Dollar
Thai Baht
United States Dollar
South African Rand
Semi-Annual Financial Report
FTSE TMX Global Debt Capital Markets Inc. (“FTDCM”), FTSE International Limited (“FTSE”), the London Stock Exchange Group companies
(the “Exchange”) or TSX INC. (“TSX” and together with FTDCM, FTSE and the Exchange, the “Licensor Parties”). The Licensor Parties make
no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the index/indices
(“the Index/Indices”) and/or the figure at which the said Index/Indices stand at any particular time on any particular day or otherwise. The
Index/Indices are compiled and calculated by FTDCM and all copyright in the Index/Indices values and constituent lists vests in FTDCM. The
Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index/Indices and the Licensor
Parties shall not be under any obligation to advise any person of any error therein.
“TMX” is a trade mark of TSX Inc. and is used under licence. “FTSE®” is a trade mark of the London Stock Exchange Group companies
and is used by FTDCM under licence.
TD Mutual Funds are managed by TD Asset Management Inc. (TDAM), a wholly-owned subsidiary of The Toronto-Dominion Bank
and are available through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be
associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before
investing. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer
and are not guaranteed or insured. Their values change frequently. There can be no assurances that a money market fund will be
able to maintain its net asset value per unit at a constant amount or that the full amount of your investment will be returned to you.
Past performance may not be repeated. Mutual fund strategies and current holdings are subject to change.
All trademarks are the property of their respective owners.
® The TD logo and other trade-marks are the property of The Toronto-Dominion Bank.
June 30, 2015
26
Semi-Annual Financial Report