TD Diversified Monthly Income Fund (03/18)

Transcription

1 TD Diversified Monthly Income Fund (03/18) TD Mutual Funds for the period ended

2 nmanagement s Responsibility for Financial Reporting The accompanying financial statements have been prepared by TD Asset Management Inc. ( TDAM ) as manager of the TD Mutual Fund Trusts, TD Managed Assets Program Portfolios and TD Managed ETF Portfolios (collectively the Funds and individually the Fund ) and approved by TDAM s board of directors. The manager is responsible for the integrity, objectivity and reliability of the data presented. This responsibility includes selecting appropriate accounting principles and making judgments and estimates consistent with International Financial Reporting Standards ( 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 informa - tion is produced, and the safeguarding of all assets of the Funds. The board of directors of TDAM is responsible for reviewing and approving the financial statements and overseeing management s performance of its financial reporting responsibilities. PricewaterhouseCoopers LLP is the external auditor of the Funds. The auditor has audited the financial statements in accordance with Canadian generally accepted auditing standards to enable them to express their opinion on the financial statements. The auditor s report is included on the follow ing page of this annual report. On behalf of TDAM, manager of the Funds. Bruce Cooper David Lambie Director and Director and Chief Executive Officer Chief Financial Officer March 16, 2018 March 16,

3 nindependent Auditor s Report To the Unitholders and Trustee of: TD Canadian Money Market Fund TD Premium Money Market Fund TD U.S. Money Market Fund TD Ultra Short Term Bond Fund TD Short Term Bond Fund TD Canadian Bond Fund TD Income Advantage Portfolio TD Canadian Core Plus Bond Fund TD Canadian Corporate Bond Fund TD Corporate Bond Plus Fund TD U.S. Corporate Bond Fund TD Real Return Bond Fund TD Global Income Fund TD Global Core Plus Bond Fund TD Global Unconstrained Bond Fund TD High Yield Bond Fund TD Global Conservative Opportunities Fund TD Global Balanced Opportunities Fund TD Monthly Income Fund TD Tactical Monthly Income Fund TD U.S. Monthly Income Fund TD U.S. Monthly Income Fund C$ TD Balanced Income Fund TD Diversified Monthly Income Fund TD Strategic Yield Fund TD Balanced Growth Fund TD Dividend Income Fund TD Canadian Diversified Yield Fund TD Canadian Low Volatility Fund TD Dividend Growth Fund TD Canadian Blue Chip Dividend Fund TD Canadian Large-Cap Equity Fund TD Canadian Equity Fund TD Core Canadian Value Fund TD Canadian Value Fund TD Canadian Small-Cap Equity Fund TD U.S. Risk Managed Equity Fund TD U.S. Low Volatility Fund TD U.S. Low Volatility Currency Neutral Fund TD North American Dividend Fund TD U.S. Dividend Growth Fund TD U.S. Blue Chip Equity Fund TD U.S. Quantitative Equity Fund TD U.S. Equity Portfolio TD North American Small-Cap Equity Fund TD U.S. Mid-Cap Growth Fund TD U.S. Small-Cap Equity Fund TD Global Risk Managed Equity Fund TD Global Low Volatility Fund TD International Growth Fund TD International Stock Fund TD Emerging Markets Low Volatility Fund TD Asian Growth Fund TD Emerging Markets Fund Epoch U.S. Shareholder Yield Fund Epoch U.S. Blue Chip Equity Fund Epoch U.S. Blue Chip Equity Currency Neutral Fund Epoch U.S. Large-Cap Value Fund Epoch Global Shareholder Yield Fund Epoch Global Shareholder Yield Currency Neutral Fund Epoch Global Equity Fund Epoch International Equity Fund Epoch European Equity Fund TD Resource Fund TD Precious Metals Fund TD Entertainment & Communications Fund TD Science & Technology Fund TD Health Sciences Fund TD Canadian Bond Index Fund TD Balanced Index Fund TD Canadian Index Fund TD Dow Jones Industrial Average Index Fund TD U.S. Index Fund TD U.S. Index Currency Neutral Fund TD Nasdaq Index Fund TD International Index Fund TD International Index Currency Neutral Fund TD European Index Fund TD US$ Retirement Portfolio TD Retirement Conservative Portfolio TD Retirement Balanced Portfolio TD Advantage Balanced Income Portfolio TD Advantage Balanced Portfolio TD Advantage Balanced Growth Portfolio TD Advantage Growth Portfolio TD Advantage Aggressive Growth Portfolio TD Comfort Conservative Income Portfolio TD Comfort Balanced Income Portfolio TD Comfort Balanced Portfolio TD Comfort Balanced Growth Portfolio TD Comfort Growth Portfolio TD Comfort Aggressive Growth Portfolio TD Fixed Income Pool TD Risk Management Pool TD Canadian Equity Pool TD Global Equity Pool TD Tactical Pool TD Managed Income Portfolio TD Managed Income & Moderate Growth Portfolio TD Managed Balanced Growth Portfolio TD Managed Aggressive Growth Portfolio TD Managed Maximum Equity Growth Portfolio TD FundSmart Managed Income & Moderate Growth Portfolio TD FundSmart Managed Balanced Growth Portfolio TD FundSmart Managed Aggressive Growth Portfolio TD Managed Index Income Portfolio TD Managed Index Income & Moderate Growth Portfolio TD Managed Index Balanced Growth Portfolio TD Managed Index Aggressive Growth Portfolio TD Managed Index Maximum Equity Growth Portfolio TD Managed Income ETF Portfolio TD Managed Income & Moderate Growth ETF Portfolio TD Managed Balanced Growth ETF Portfolio TD Managed Aggressive Growth ETF Portfolio TD Managed Maximum Equity Growth ETF Portfolio (collectively, the Funds ) 2

4 nindependent Auditor s Report We have audited the accompanying financial statements of each of the Funds, which comprise the statements of financial position, comprehensive income, changes in net assets attributable to holders of redeemable units and cash flows as at and for the periods indicated in note 1, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the financial statements of each of the Funds in accordance with Inter national Financial Reporting Standards, and for such internal control as manage ment determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on the financial statements of each of the Funds based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit pro - cedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of account - ing policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in each of our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of each of the Funds present fairly, in all material respects, the financial position, financial performance and cash flows of each of the Funds as at and for the periods indicated in note 1 in accordance with Inter national Financial Reporting Standards. Chartered Professional Accountants, Licensed Public Accountants Toronto, Ontario March 16,

5 ntd Diversified Monthly Income Fund Statements of Financial Position (in 000s except per unit amounts) as at and Assets Current Assets Investments $ 419,026 $ 437,827 Cash 21,938 9,122 Interest Receivable 1,343 1,142 Dividends Receivable 726 1,162 Subscriptions Receivable 75 1,030 Derivative Assets Unrealized Appreciation on Open Foreign Exchange Forward Contracts , ,416 Liabilities Current Liabilities Accrued Liabilities Redemptions Payable Payable for Investments Purchased 93 0 Derivative Liabilities Unrealized Depreciation on Open Foreign Exchange Forward Contracts Net Assets Attributable to Holders of Redeemable Units $ 442,984 $ 449,514 Net Assets Attributable to Holders of Redeemable Units Per Series (Note 5) Investor Series $ 353,421 $ 355,493 Advisor Series $ 54,798 $ 64,611 F-Series $ 17,501 $ 11,331 H-Series $ 6,591 $ 6,063 S-Series $ 1,940 $ 1,442 T-Series $ 8,733 $ 10,574 O-Series $ 0 $ 0 $ 442,984 $ 449,514 Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ $ Advisor Series $ $ F-Series $ $ H-Series $ $ S-Series $ $ T-Series $ $ O-Series $ $ The accompanying notes are an integral part of the financial statements. 4

6 ntd Diversified Monthly Income Fund Statements of Comprehensive Income (in 000s except per unit amounts) for the periods ended and Income Foreign Exchange Gain (Loss) on Cash $ 101 $ 81 Securities Lending Income Net Gain (Loss) on Investments and Derivatives Net Gain (Loss) on Investments Interest for Distribution Purposes 5,372 6,025 Dividend Income 9,595 10,814 Net Realized Gain (Loss) 48,300 20,324 Net Change in Unrealized Appreciation/ Depreciation (23,404) 35,032 Net Gain (Loss) on Investments 39,863 72,195 Net Gain (Loss) on Derivatives Net Realized Gain (Loss) 1,289 (1,467) Net Change in Unrealized Appreciation/ Depreciation 342 1,188 Net Gain (Loss) on Derivatives 1,631 (279) Total Net Gain (Loss) on Investments and Derivatives 41,494 71,916 Total Income (Net) 41,616 72,065 Expenses (Note 6) Management Fees 9,673 9,498 Administration Fees Independent Review Committee Fees 2 2 Transaction Costs Interest Charges 2 0 Total Expenses before Waivers 10,270 10,060 Less: Waived Expenses (2) (2) Total Expenses (Net) 10,268 10,058 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax 31,348 62,007 Tax Reclaims (Withholding Taxes) (273) (309) Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 31,075 $ 61, Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Investor Series $ 24,428 $ 48,983 Advisor Series $ 4,135 $ 9,167 F-Series $ 1,167 $ 1,178 H-Series $ 467 $ 741 S-Series $ 244 $ 111 T-Series $ 634 $ 1,518 O-Series $ 0 $ 0 $ 31,075 $ 61,698 Weighted Average Units Outstanding for the Period Per Series Investor Series 13,992 14,872 Advisor Series 4,900 5,760 F-Series 1, H-Series S-Series T-Series O-Series 0 0 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ 1.75 $ 3.29 Advisor Series $ 0.84 $ 1.59 F-Series $ 1.03 $ 1.75 H-Series $ 0.82 $ 1.65 S-Series $ 1.22 $ 1.87 T-Series $ 0.85 $ 1.68 O-Series $ 1.08 $ 1.93 The accompanying notes are an integral part of the financial statements. 5

7 ntd Diversified Monthly Income Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2016 Investor Series Advisor Series F-Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 355,493 $ 342,753 $ 64,611 $ 68,019 $ 11,331 $ 5,113 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 24,428 48,983 4,135 9,167 1,167 1,178 Distributions to Holders of Redeemable Units From Net Investment Income (4,677) (4,866) (806) (888) (347) (152) From Net Realized Gains on Investments Return of Capital 0 (431) 0 (107) 0 (56) (4,677) (5,297) (806) (995) (347) (208) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 22,449 18,186 5,898 8,137 8,039 6,870 Reinvestments of Distributions to Holders of Redeemable Units 4,535 5, Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (48,808) (54,273) (19,722) (20,546) (2,873) (1,750) Net Increase (Decrease) from Redeemable Unit Transactions (21,823) (30,946) (13,142) (11,580) 5,350 5,248 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (2,072) 12,740 (9,813) (3,408) 6,170 6,218 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 353,421 $ 355,493 $ 54,798 $ 64,611 $ 17,501 $ 11,331 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 14,376 15,740 5,357 6, Redeemable Units Issued Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (1,927) (2,359) (1,594) (1,838) (233) (152) Redeemable Units Outstanding, End of the Period 13,516 14,376 4,297 5,357 1, H-Series S-Series T-Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 6,063 $ 5,747 $ 1,442 $ 296 $ 10,574 $ 11,328 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units ,518 Distributions to Holders of Redeemable Units From Net Investment Income (95) (80) (64) (20) (124) (142) From Net Realized Gains on Investments Return of Capital (329) (226) (84) (25) (427) (471) (424) (306) (148) (45) (551) (613) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 1,804 1,083 5,207 1, ,859 Reinvestments of Distributions to Holders of Redeemable Units Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (1,529) (1,354) (4,824) (47) (3,136) (3,785) Net Increase (Decrease) from Redeemable Unit Transactions 485 (119) 402 1,080 (1,924) (1,659) Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units ,146 (1,841) (754) Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 6,591 $ 6,063 $ 1,940 $ 1,442 $ 8,733 $ 10,574 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period Redeemable Units Issued Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (123) (117) (362) (4) (252) (317) Redeemable Units Outstanding, End of the Period The accompanying notes are an integral part of the financial statements. 6

8 ntd Diversified Monthly Income Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2016 O-Series TOTAL Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 0 $ 0 $ 449,514 $ 433,256 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units ,075 61,698 Distributions to Holders of Redeemable Units From Net Investment Income 0 0 (6,113) (6,147) From Net Realized Gains on Investments Return of Capital 0 0 (840) (1,317) 0 0 (6,953) (7,464) Redeemable Unit Transactions Proceeds from Redeemable Units Issued ,335 37,257 Reinvestments of Distributions to Holders of Redeemable Units 0 0 5,904 6,522 Early Redemption Fees on Redeemable Units Redemption of Redeemable Units 0 0 (80,892) (81,755) Net Increase (Decrease) from Redeemable Unit Transactions 0 0 (30,652) (37,976) Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 0 0 (6,530) 16,258 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 0 $ 0 $ 442,984 $ 449,514 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 0 0 Redeemable Units Issued 0 0 Redeemable Units Issued on Reinvestments 0 0 Redeemable Units Redeemed 0 0 Redeemable Units Outstanding, End of the Period 0 0 The accompanying notes are an integral part of the financial statements. 7

9 ntd Diversified Monthly Income Fund Statements of Cash Flows (in 000s) for the periods ended and Cash Flows from (used in) Operating Activities Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 31,075 $ 61,698 Adjustment For: Unrealized Foreign Exchange (Gain) Loss on Cash (1) (4) Net Realized (Gain) Loss on Sale of Investments and Derivatives (49,589) (18,857) Net Change in Unrealized Appreciation/ Depreciation of Investments and Derivatives 23,062 (36,220) Purchase of Investments (164,111) (233,044) Proceeds from Sale and/or Maturity of Investments 209, ,519 (Increase) Decrease in Interest Receivable (204) (14) (Increase) Decrease in Dividends Receivable Increase (Decrease) in Accrued Liabilities (4) (818) Net Cash from (used in) Operating Activities 49,857 54,308 Cash Flows from (used in) Financing Activities Distributions Paid to Holders of Redeemable Units, Net of Reinvested Distributions (1,049) (942) Proceeds from Issuance of Redeemable Units 36,678 28,470 Amounts Paid on Redemption of Redeemable Units, Net of Early Redemption Fees (72,671) (73,637) Net Cash from (used in) Financing Activities (37,042) (46,109) Unrealized Foreign Exchange Gain (Loss) on Cash 1 4 Net Increase (Decrease) in Cash 12,815 8,199 Cash (Bank Overdraft) at Beginning of the Period 9, Cash (Bank Overdraft) at End of the Period $ 21,938 $ 9,122 Interest for Distribution Purposes Received*, Net of Withholding Taxes $ 5,168 $ 6,011 Dividends Received*, Net of Withholding Taxes $ 9,761 $ 10,559 * Included as part of Cash Flows from (used in) Operating Activities. The accompanying notes are an integral part of the financial statements. 8

10 ntd Diversified Monthly Income Fund Schedule of Investment Portfolio (in 000s except number of Shares or Units/Par Value) as at No. of Shares or Units/ Par Value Description Cost Fair Value Canadian Equities 47.9% ENERGY 12.5% 225,000 Canadian Natural Resources Limited $ 6,933 $ 10, ,000 Enbridge Inc. 7,657 12,290 70,000 Keyera Corp. 1,245 2, ,000 Kinder Morgan Canada Ltd. 4,300 4, ,000 Pason Systems Inc. 1,882 1, ,000 Suncor Energy Inc. 10,724 12, ,000 TransCanada Corporation 6,314 8,259 75,000 Vermilion Energy Inc. 3,078 3,426 42,133 55,324 MATERIALS 4.2% 55,000 Agnico Eagle Mines Limited 3,532 3,192 60,000 Agrium Inc. 7,355 8,675 38,000 Franco-Nevada Corporation 3,519 3,818 40,000 Methanex Corporation 2,055 3,046 16,461 18,731 INDUSTRIALS 1.5% 63,000 Canadian National Railway Company 5,817 6,530 CONSUMER DISCRETIONARY 1.2% 20,000 Dollarama Inc. 2,175 3,141 30,000 Restaurant Brands International Inc. 1,924 2,318 4,099 5,459 CONSUMER STAPLES 0.9% 65,000 Alimentation Couche-Tard Inc., Class B SV 4,010 4,263 FINANCIALS 20.2% 200,000 The Bank of Nova Scotia 9,363 16, ,000 Brookfield Asset Management Inc., Class A 7,904 9,302 75,000 Canadian Imperial Bank of Commerce 6,193 9, ,000 Manulife Financial Corporation 9,775 11, ,000 Royal Bank of Canada 9,761 20,530 60,000 Sun Life Financial Inc. 2,396 3, ,000 The Toronto-Dominion Bank* 9,325 19,886 1,000 Trisura Group Ltd ,741 89,415 TELECOMMUNICATION SERVICES 3.2% 90,000 BCE Inc. 3,477 5,434 60,000 Rogers Communications Inc., Class B 1,142 3, ,000 TELUS Corporation 3,100 4,762 7,719 14,039 UTILITIES 2.7% 250,000 Algonquin Power & Utilities Corp. 2,734 3,515 50,000 Boralex Inc., Class A 1,114 1,175 60,000 Emera Inc. 1,924 2,819 95,000 Fortis Inc. 4,221 4,380 9,993 11,889 ROYALTY/INCOME TRUSTS 1.5% 120,000 Brookfield Infrastructure Partners L.P. 1,085 6,766 Total Canadian Equities 146, ,416 No. of Shares or Units/ Par Value Description Cost Fair Value U.S. Equities 13.8% MATERIALS 0.7% 15,000 Praxair Inc. $ 2,652 $ 2,917 INDUSTRIALS 1.6% 10,000 3M Company 765 2,959 15,000 Honeywell International Inc ,892 23,000 Nielsen Holdings PLC 1,375 1,052 3,007 6,903 CONSUMER DISCRETIONARY 1.6% 1,800 Amazon.com Inc. 1,988 2,646 40,000 Comcast Corporation, Class A 1,701 2,014 30,000 Las Vegas Sands Corp. 2,400 2,620 6,089 7,280 CONSUMER STAPLES 1.3% 40,000 The Coca-Cola Company 1,099 2,307 25,000 Philip Morris International Inc. 3,399 3,320 4,498 5,627 HEALTH CARE 1.8% 17,000 Amgen Inc. 3,912 3,716 25,000 Johnson & Johnson 1,637 4,391 5,549 8,107 FINANCIALS 2.1% 70,000 Bank of America Corporation 2,245 2,597 30,000 JPMorgan Chase & Co. 1,511 4,033 40,000 Morgan Stanley 1,920 2,638 5,676 9,268 INFORMATION TECHNOLOGY 3.3% 1,000 Alphabet Inc., Class A 1,191 1,324 15,000 Apple Inc. 2,239 3,191 8,500 International Business Machines Corporation 1,795 1,639 27,000 Microsoft Corporation 2,253 2,903 20,000 Texas Instruments Incorporated 2,290 2,626 20,000 Visa Inc. 2,255 2,866 12,023 14,549 REAL ESTATE 1.4% 25,000 Crown Castle International Corp. 3,047 3,489 5,000 Equinix Inc. 2,449 2,848 5,496 6,337 Total U.S. Equities 44,990 60,988 International Equities 5.3% AUSTRALIA 0.8% 125,000 BHP Billiton Limited 3,372 3,625 BELGIUM 0.8% 25,000 Anheuser-Busch InBev NV 3,939 3,512 DENMARK 1.2% 75,000 Novo Nordisk AS, Class B 4,268 5,083 FRANCE 0.5% 25,000 BNP Paribas SA 2,187 2,347 SPAIN 0.5% 251,760 Banco Santander SA 2,178 2,080 SWEDEN 0.7% 161,000 Com Hem Holding AB 2,193 3,094 UNITED KINGDOM 0.8% 400,000 BP PLC 3,114 3,548 Total International Equities 21,251 23,289 9

11 TD Diversified Monthly Income Fund No. of Shares or Units/ Par Value Description Cost Fair Value Canadian Bonds 24.6% FEDERAL BONDS & GUARANTEES 0.3% Government of Canada 170, % due June 01, 2024 $ 178 $ , % due June 01, , % due December 01, ,373 1,286 PROVINCIAL BONDS & GUARANTEES 1.9% Hydro One Inc. 3,200, % due June 01, ,888 4,501 1,100, % due March 13, ,091 1,312 Ontrea Inc. 439, % due April 09, Province of Ontario 850, % due June 02, ,076 Province of Ontario Generic Strip Residual 2,900, % due June 02, ,331 1,305 7,702 8,637 CORPORATE BONDS 22.4% 407 International Inc. 750,000 Callable 3.83% due May 11, AIMCo Realty Investors LP 300,000 Callable 2.266% due June 26, ,000 Callable 3.043% due June 01, Alberta Powerline LP 160, % due December 01, , % due March 01, AltaLink L.P. 1,000, % due June 30, ,084 1,087 1,000,000 Callable 3.717% due December 03, ,062 1,044 Bank of Montreal 2,210, % due April 23, ,303 2,281 1,050, % due March 16, ,057 1,035 1,000, % due September 10, ,036 1, ,000 Callable 3.34% due December 08, ,000 Callable 2.57% due June 01, The Bank of Nova Scotia 1,540, % due January 11, ,587 1, , % due June 04, ,040, % due April 27, ,040 1, , % due June 28, ,000 Callable 3.367% due December 08, ,460,000 Callable 2.58% due March 30, ,460 1,438 bcimc Realty Corporation 1,070,000 Callable 2.84% due June 03, ,069 1, ,000 Callable 3.00% due March 31, Bell Canada Inc. 1,250, % due June 17, ,249 1,277 1,360,000 Callable 3.15% due September 29, ,355 1, ,000 Callable 2.70% due February 27, BMO Capital Trust II 223,000 Callable % due December 31, Bombardier Inc. (USD) 70, % due March 15, Bow Centre Street L.P. 700, % due June 14, Canadian Imperial Bank of Commerce 500, % due March 21, ,010,000 Callable 6.00% due June 06, ,007 1, ,000 Callable 3.42% due January 26, No. of Shares or Units/ Par Value Description Cost Fair Value Canadian Natural Resources Limited 1,010, % due August 14, 2020 $ 1,010 $ 1, , % due February 11, ,000 Callable 3.55% due June 03, Capital Desjardins Inc. 1,000,000 Callable 4.954% due December 15, ,000 1,087 Cascades Inc. 175,000 Callable 5.50% due July 15, CIBC Capital Trust 2,240,000 Callable 9.976% due June 30, ,689 2,473 CU Inc. 1,030,000 Callable 3.964% due July 27, ,060 1,117 Enbridge Gas Distribution Inc. 500, % due December 16, ,800, % due February 25, ,833 2, ,000 Callable 4.00% due August 22, Enbridge Pipelines Inc. 1,300, % due December 19, ,252 1, , % due November 10, ,320, % due April 06, ,424 1,588 First Capital Realty Inc. 500, % due January 31, Ford Credit Canada Company 660, % due September 16, , % due February 23, , % due June 22, , % due September 19, FortisBC Inc. 570,000 Callable 4.00% due October 28, Grand Renewable Solar L.P. 188, % due January 31, Honda Canada Finance Inc. 280, % due December 19, , % due March 01, HSBC Bank Canada 700, % due July 07, ,250, % due September 29, ,250 1, , % due June 29, Industrial Alliance Insurance and Financial Services Inc. 400,000 Callable 3.30% due September 15, Kingston Solar LP 299, % due July 31, The Manufacturers Life Insurance Company 1,320,000 Callable 2.10% due June 01, ,320 1,310 Manulife Financial Capital Trust II 3,500,000 Callable 7.405% due December 31, ,500 3,817 Nissan Canada Financial Services Inc. 120, % due April 09, North West Redwater Partnership/ NWR Financing Company Ltd. 170,000 Callable 2.10% due February 23, ,000 Callable 3.20% due July 22, ,000 Callable 3.20% due April 24, ,000 Callable 4.25% due June 01, ,000 Callable 3.70% due February 23, ,000 Callable 4.05% due July 22, Northland Power Solar Finance One L.P. 272, % due June 30,

12 TD Diversified Monthly Income Fund No. of Shares or Units/ Par Value Description Cost Fair Value OMERS Realty Corporation 350,000 Callable 2.858% due February 23, 2024 $ 350 $ 353 1,010, % due November 12, ,039 1, ,000 Callable 3.244% due October 04, Open Text Corporation (USD) 175,000 Callable 5.625% due January 15, Original Wempi Inc. 580, % due February 13, RBC Capital Trust 400,000 Callable 6.821% due June 30, Real Estate Asset Liquidity Trust 268,029 Callable 2.356% due January 12, ,000 Callable 3.239% due May 12, ,000 Callable 2.588% due October 12, Resolute Forest Products Inc. (USD) 130,000 Callable 5.875% due May 15, RioCan Real Estate Investment Trust 240, % due August 26, , % due April 09, ,090, % due May 30, ,098 1, , % due October 03, Rogers Communications Inc. 300, % due November 04, ,150, % due March 22, ,175 2,339 1,400, % due June 06, ,394 1,479 Royal Bank of Canada 830, % due March 04, ,360, % due March 02, ,360 1, , % due December 05, , % due December 05, ,000 Callable 2.99% due December 06, ,010,000 Callable 2.48% due June 04, ,010 1, , % due July 16, ,090,000 Callable 3.31% due January 20, ,090 1, ,000 Callable 3.45% due September 29, Scotiabank Tier 1 Trust 1,400,000 Callable 7.802% due June 30, ,533 1,504 Shaw Communications Inc. 270, % due October 01, Sun Life Capital Trust II 2,000,000 Callable 5.863% due December 31, ,000 2,121 Suncor Energy Inc. 1,022,000 Callable 3.10% due November 26, ,023 1,044 TD Capital Trust III* 140,000 Callable 7.243% due December 31, TD Capital Trust IV* 2,500,000 Callable 6.631% due June 30, ,500 2,800 TELUS Corporation 1,500, % due December 04, ,504 1,580 1,450, % due July 23, ,549 1, ,000 Callable 3.20% due April 05, ,240,000 Callable 2.35% due March 28, ,237 1, ,000 Callable 3.75% due March 10, Thomson Reuters Corporation 310,000 Callable 3.309% due November 12, Toromont Industries Ltd. 170,000 Callable 3.842% due October 27, The Toronto-Dominion Bank* 295,000 Callable 2.692% due June 24, ,000 Callable 3.224% due July 25, ,000 Callable 4.859% due March 04, No. of Shares or Units/ Par Value Description Cost Fair Value TransCanada PipeLines Limited 780,000 Callable 3.30% due July 17, 2025 $ 779 $ 803 1,200, % due November 15, ,204 1, ,000 Callable 4.35% due June 06, Union Gas Limited 500, % due July 23, ,300,000 Callable 4.20% due June 02, ,435 1,456 Ventas Canada Finance Limited 800, % due September 30, ,000 Callable 3.30% due February 01, Videotron Ltd. (USD) 2,000 Callable 5.125% due April 15, VW Credit Canada Inc. 450, % due August 20, , % due October 01, Wells Fargo Canada Corporation 2,210, % due January 29, ,210 2,251 Westcoast Energy Inc. 200, % due July 02, ,000 Callable 3.77% due December 08, ,589 99,032 Total Canadian Bonds 105, ,955 Global Bonds 3.0% UNITED KINGDOM 0.3% Fiat Chrysler Automobiles NV (USD) 220, % due April 15, HSBC Holdings PLC 1,100, % due December 05, ,100 1,111 1,393 1,396 UNITED STATES 2.3% The ADT Corporation (USD) 125, % due July 15, AECOM (USD) 175,000 Callable 5.75% due October 15, The AES Corporation (USD) 15, % due June 01, Ally Financial Inc. (USD) 275, % due September 10, Ashland Inc. (USD) 75,000 Callable 4.75% due August 15, Bank of America Corporation (USD) 880,000 Callable 2.604% due March 15, Best Buy Company Inc. (USD) 190,000 Callable 5.50% due March 15, Calpine Corporation (USD) 200,000 Callable 6.00% due January 15, CCO Holdings LLC/ CCO Holdings Capital Corporation (USD) 175,000 Callable 5.125% due May 01, Cemex Finance LLC (USD) 200,000 Callable 6.00% due April 01, CenturyLink Inc. (USD) 150, % due June 15, Charter Communications Operating LLC/ Charter Communications Operating Capital (USD) 25,000 Callable 3.75% due February 15,

13 TD Diversified Monthly Income Fund No. of Shares or Units/ Par Value Description Cost Fair Value CHS/Community Health Systems Inc. (USD) 83,000 Callable 5.125% due August 01, 2021 $ 93 $ 94 CIT Group Inc. (USD) 35, % due August 01, CNH Industrial Capital LLC (USD) 100, % due April 05, Crown Castle International Corp. (USD) 20, % due April 15, Diamond 1 Finance Corporation/ Diamond 2 Finance Corporation (USD) 200,000 Callable 5.875% due June 15, DISH DBS Corporation (USD) 125, % due September 01, First Data Corporation (USD) 145,000 Callable 5.375% due August 15, ,000 Callable 5.00% due January 15, Frontier Communications Corporation (USD) 50, % due October 01, GameStop Corp. (USD) 60,000 Callable 6.75% due March 15, The Goodyear Tire & Rubber Company (USD) 150, % due August 15, HCA Inc. (USD) 250, % due February 15, The Hertz Corporation (USD) 200,000 Callable 5.875% due October 15, Hologic Inc. (USD) 175,000 Callable 5.25% due July 15, Hughes Satellite Systems Corporation (USD) 100, % due June 15, International Lease Finance Corporation (USD) 150, % due April 15, , % due May 15, Jabil Circuit Inc. (USD) 225, % due December 15, L Brands Inc. (USD) 150, % due April 01, Lamar Media Corp. (USD) 25,000 Callable 5.875% due February 01, ,000 Callable 5.00% due May 01, MSCI Inc. (USD) 200,000 Callable 5.25% due November 15, Neptune Finco Corp. (USD) 200,000 Callable 6.625% due October 15, Nielsen Finance LLC/Nielsen Finance Co. (USD) 175,000 Callable 5.00% due April 15, NRG Energy Inc. (USD) 125,000 Callable 6.25% due July 15, PVH Corp. (USD) 100,000 Callable 4.50% due December 15, R.R. Donnelley & Sons Company (USD) 50, % due March 15, Reynolds Group Issuer Inc. (USD) 64,814 Callable 6.875% due February 15, SBA Communications Corporation (USD) 35,000 Callable 4.875% due July 15, Sinclair Television Group Inc. (USD) 200,000 Callable 5.375% due April 01, No. of Shares or Units/ Par Value Description Cost Fair Value Sirius XM Radio Inc. (USD) 200,000 Callable 6.00% due July 15, 2024 $ 277 $ 267 Six Flags Entertainment Corporation (USD) 75,000 Callable 4.875% due July 31, Sprint Corporation (USD) 48, % due August 15, , % due November 15, Staples Inc., Term Loan (USD) 139,480 due August 15, TEGNA Inc. (USD) 100,000 Callable 4.875% due September 15, T-Mobile US Inc. (USD) 135,000 Callable 6.00% due March 01, ,000 Callable 6.50% due January 15, VeriSign Inc. (USD) 80,000 Callable 4.75% due July 15, Wells Fargo & Company 700, % due April 25, , % due October 27, WESCO Distribution Inc. (USD) 10,000 Callable 5.375% due June 15, ,181 10,296 SUPRANATIONALS 0.4% Inter-American Development Bank 1,500, % due January 26, ,442 1,686 Total Global Bonds 13,016 13,378 Transaction Costs (224) TOTAL INVESTMENT PORTFOLIO 94.6% $ 330,755 $ 419,026 FORWARD CONTRACTS (SCHEDULE 1) 0.1% 378 OTHER NET ASSETS (LIABILITIES) 5.3% 23,580 TOTAL NET ASSETS 100.0% $ 442,984 * Related party to the Fund as an affiliated entity of TD Asset Management Inc. 12

14 TD Diversified Monthly Income Fund Schedule 1 Foreign Exchange Forward Contracts (in 000s except contract price and total number of contract(s)) Canadian Value Canadian Value Settlement Currency to be as at Currency to be as at Contract CAD Unrealized Date Delivered Received Price Appreciation January 31, ,356 USD $ 9,242 9,314 CAD $ 9, $ 72 January 31, ,366 USD 1,717 1,730 CAD 1, January 31, USD 1,177 1,186 CAD 1, February 28, ,045 USD 8,849 8,956 CAD 8, February 28, ,966 USD 8,749 8,855 CAD 8, February 28, ,653 USD 8,356 8,458 CAD 8, February 28, ,515 USD 6,926 7,009 CAD 7, February 28, ,711 USD 3,405 3,446 CAD 3, $ 48,421 $ 48,954 $ 533 Canadian Value Canadian Value Settlement Currency to be as at Currency to be as at Contract CAD Unrealized Date Delivered Received Price Depreciation January 31, CAD $ USD $ $ (3) February 28, ,619 CAD 4,619 3,616 USD 4, to (78) February 28, CAD USD (3) March 28, ,701 CAD 2,701 2,098 USD 2, (66) March 28, CAD USD (5) $ 8,086 $ 7,931 $ (155) TOTAL NUMBER OF CONTRACT(S): 27 CAD NET UNREALIZED APPRECIATION $

15 ntd Diversified Monthly Income Fund Fund-Specific Notes to the Financial Statements (A) The Fund (I) The Fund start date was November 30, (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. (IV) The investment objective of the Fund is to seek to provide monthly income with capital appreciation as a secondary objective, by investing primarily in income-producing securities. In seeking to achieve this objective, the Fund invests primarily in a diversified portfolio of Canadian securities which may include government and corporate debt obligations (including non-investment grade corporate debt obligations), other evidences of indebtedness (including investments in loans), dividend-paying equity securities and exchange-traded funds. The Fund uses a bottom-up strategy that emphasizes the analysis of individual companies to determine if their income distributions can be maintained and increased over time. This analysis also focuses on selecting securities and allocating investments among asset classes with the objective to seek to maximize risk-adjusted returns. Generally, the Fund employs a buy-and-hold strategy. (V) Any related party holdings as at (2016: 7.7%), are disclosed in the Schedule of Investment Portfolio. (B) Management Fees and Administration Fees (Note 6) for the periods ended and 2016 (I) MANAGEMENT FEES (%) (exclusive of GST and HST) Annual Maximum Actual Rate Annual Rate Annual Rate Series Investor Series Advisor Series F-Series H-Series S-Series T-Series O-Series Includes management fees paid by the Fund and the proportionate management fees, if any, of the underlying fund(s) managed by TDAM held by the Fund. However, there is no duplication of management fees paid to TDAM or its affiliates if the Fund invests in underlying fund(s) that are managed by TDAM. The amount payable (in 000s) to TDAM as at for management fees is $0 (2016: $0) which is included in Accrued Liabilities in the Statements of Financial Position. (II) ADMINISTRATION FEES (%) (exclusive of GST and HST) Annual Rate Series Investor Series Advisor Series H-Series T-Series The amount payable (in 000s) to TDAM as at for administration fees is $27 (2016: $29) which is included in Accrued Liabilities in the Statements of Financial Position. (C) Brokerage Commissions and Soft Dollars (in 000s) (Notes 3 and 6) for the periods ended and 2016 (I) BROKERAGE COMMISSIONS Total Brokerage Commissions $ 213 $ 184 Paid to Related Parties 23 6 (II) SOFT DOLLARS Soft Dollars $ 9 $ 39 Percentage of Total Commissions (%) (D) Tax Loss Carry Forwards (in 000s) (Note 7) as at Capital Losses $ 3,266 Non-Capital Losses (by year of expiry) (E) Securities Lent (Note 3) (I) SECURITIES LENDING INCOME A reconciliation of the gross amount generated from the securities lending transactions to the securities lending income to the Fund for the periods ended and 2016 is as follows: None Percentage of Amount (in 000s) Total Amount (%) Gross Securities Lending Income $ 25 $ Agent fees The Bank of New York Mellon Corp. (4) (16) (16.0) (19.0) Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) Tax Reclaims (Withholding Taxes) (3) (5) (12.0) (6.0) Net Securities Lending Income $ 18 $ (II) SECURITIES LENT AND COLLATERAL HELD (in 000s) The table below summarizes the aggregate securities lent and related collateral held by the Fund as at and Fair Value of Securities Lent $ 5,429 $ 8,924 Fair Value of Collateral Held 5,743 9,604 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. 14

16 TD Diversified Monthly Income Fund Fund-Specific Notes to the Financial Statements (F) Financial Risk Management (Notes 3, 4 and 8) as at and 2016 (I) INTEREST RATE RISK The table below summarizes the Fund s exposure to interest rate risk as at and 2016 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 approx - imate sensitivity analysis amounts and the differences could be material. Term to Maturity Total Exposure (in 000s) Bonds Less than 1 year $ 2,296 $ 2, years 57,689 60, years 31,298 37,834 > 10 years 31,050 30,130 Total $ 122,333 $ 130,670 Impact on Net Assets (000s) $ 7,447 $ 7,603 Impact on Net Assets (%) (II) CURRENCY RISK The following table indicates the foreign currencies to which the fund had exposure to as at and 2016 in Canadian dollar terms, including the underlying principal amount of foreign exchange forward contracts, as applicable. 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 exposure to other currencies, with all other variables held constant. In practice, the actual trading results may differ from these approximate sensitivity amounts and the differences could be material. Foreign Exchange Financial Forward Total Impact on Currency (in 000s) Instruments Contracts Exposure* Net Assets* Australian Dollar $ 3,625 $ 0 $ 3,625 $ 181 British Pound 3, , Danish Krone 5, , Euro 8, , Swedish Krona 3, , Swiss Franc United States Dollar 82,744 (40,490) 42,254 2,113 Total $ 107,334 $ (40,490) $ 66,844 $ 3,342 (III) OTHER PRICE RISK The table below summarizes the impact of other price risk to the Fund. As at and 2016, had the benchmark of the Fund increased or decreased by 5 percent, with all other variables held constant, the net assets of the Fund would have increased or decreased by approximately: Impact on Impact on Net Assets (in 000s) Net Assets (%) Benchmark % S&P/TSX Composite Total Return Index, 40% FTSE TMX Canada All Corporate Bond Index, 10% MSCI World High Dividend Yield Index (Net Dividend, C$) $ 14,835 $ 15, In practice, the actual trading results may differ from the above estimated amounts and the differences could be material. (IV) CREDIT RISK The table below summarizes the debt instruments by credit ratings as at and Percentage of Percentage of Total Bonds (%) Total Net Assets (%) Credit Rating AAA AA A BBB BB B CCC No Rating Total Credit ratings are obtained from Standard & Poor s, Moody s or DBRS rating agencies. As a Percentage of Net Assets (%) Total Impact on Currency (in 000s) Exposure* Net Assets* December 31, 2016 British Pound $ 2 $ 0 Swiss Franc 29 1 United States Dollar 42,614 2,131 Total $ 42,645 $ 2,132 As Percentage of Net Assets (%) * Includes both monetary and non-monetary instruments, where applicable. 15

17 TD Diversified Monthly Income Fund Fund-Specific Notes to the Financial Statements (V) FINANCIAL INSTRUMENTS BY THE LEVEL IN THE FAIR VALUE HIERARCHY (in 000s) The table below illustrates the classification of the Fund s financial instruments within the fair value hierarchy as at and Level 1 Level 2 Level 3 Total Common Shares $ 296,693 $ 0 $ 0 $ 296,693 Bonds 0 122, ,333 Forward Contracts , , ,553 Forward Contracts 0 (149) 0 (149) $ 296,693 $ 122,711 $ 0 $ 419,404 December 31, 2016 Common Shares $ 307,157 $ 0 $ 0 $ 307,157 Bonds 0 130, ,670 Forward Contracts , , ,960 Forward Contracts 0 (97) 0 (97) $ 307,157 $ 130,706 $ 0 $ 437,863 As at the end of the periods, transfers between Level 1 and Level 2 were nil. (VI) RECONCILIATION OF LEVEL 3 FAIR VALUE MEASUREMENTS (in 000s) Not significant or applicable to the Fund. (VII) CONTRACTUAL MATURITIES ANALYSIS FOR FINANCIAL LIABILITIES As at and 2016, the Fund s net assets are due on demand. All other financial liabilities of the Fund are due in less than three months. (G) Investment Portfolio Concentration (%) (Note 8) As at and 2016, the Fund s investment portfolio concentration can be summarized as follows: Canadian Equities Energy Materials Industrials Consumer Discretionary Consumer Staples Financials Telecommunication Services Utilities Real Estate Royalty/Income Trusts U.S. Equities Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Real Estate International Equities Australia Belgium Denmark France Spain Sweden United Kingdom Canadian Bonds Federal Bonds Provincial Bonds & Guarantees Corporate Bonds Global Bonds United Kingdom United States Supranationals Forward Contracts Other Net Assets (Liabilities) (H) Interest in Unconsolidated Structured Entities (in 000s) (Note 3) as at and 2016 Not significant or applicable to the Fund. 16

18 TD Diversified Monthly Income Fund Fund-Specific Notes to the Financial Statements (I) Offsetting of Financial Assets and Liabilities (in 000s) (Note 3) The following table presents the recognized financial instruments that are offset, or subject to enforceable master netting arrangements, if certain conditions arise, or other similar agreements but that are not offset, and cash and financial instruments collateral received or pledged, as at and 2016 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. Related Amounts Not Amounts Net Amounts Set-Off on the Statements Gross Amounts Set-Off on the Presented on of Financial Position of Recognized Statements the Statements Financial Assets of Financial of Financial Financial (Liabilities) Position Position Instruments Cash Net Amount Derivative Assets $ 533 $ (6) $ 527 $ (71) $ 0 $ 456 Derivative Liabilities (155) 6 (149) 71 0 (78) December 31, 2016 Derivative Assets $ 269 $ (136) $ 133 $ (27) $ 0 $ 106 Derivative Liabilities (233) 136 (97) 27 0 (70) 17

19 nnotes to the Financial Statements 1. The Funds The TD Mutual Fund Trusts and TD Managed Assets Program Portfolios (collectively, the Funds and individually, the Fund ) are open-end mutual funds established under the laws of Ontario and governed by the Declaration of Trust, as amended from time to time. The TD Managed Assets Program Portfolios invest primarily in units of other investment funds including in units of exchange-traded funds. TD Asset Management Inc. ( TDAM ) is the manager, portfolio adviser and trustee of the Funds. TDAM, TDAM USA Inc., TD Investment Services Inc. ( TDIS ), TD Waterhouse Canada Inc. ( TDW ) and Epoch Investment Partners, Inc. ( Epoch ) are wholly-owned 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. The financial year-end for the Funds is December 31. The Statements of Financial Position are presented as at and The Statements of Comprehensive Income, Statements of Changes in Net Assets Attributable to Holders of Redeemable Units and Statements of Cash Flows are presented for the periods ended and Where a Fund or series of a Fund was established during either period, the information for that Fund or series is provided from the inception date and a comparative statement has only been presented for any period for which that Fund was in existence as at the reporting date. Each Fund s start date as indicated in the Fund-Specific Notes to the Financial Statements is the date that it commenced operations or in the case of a new series, the date the series was first offered and not its inception date. These financial statements were authorized for issue by TDAM on March 16, Basis of Presentation These financial statements have been prepared in compliance with International Financial Reporting Standards ( IFRS ) as published by the International Accounting Standards Board ( IASB ). These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss ( FVTPL ). 3. Summary of Significant Accounting Policies Financial Instruments The Funds recognize 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 Funds 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. 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 Funds have determined that they meet the definition of an investment entity and as a result, the Funds measure subsidiaries, if any, at FVTPL. An investment entity is an entity that: obtains funds from one or more investors for the purpose of providing them with investment management services; commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and measures and evaluates the performance of substantially all of its investments on a fair value basis. The significant judgment that the Funds have made in determining that this definition is met is that fair value is the primary measurement attribute used to measure and evaluate the performance of substantially all of the Funds investments. The Funds investments may also include associates and joint ventures which are designated at FVTPL. The Funds outstanding redeemable units entitlements include a contractual obligation to distribute any net income and net realized capital gains in cash (at the request of the unitholder) and therefore the ongoing redemption feature is not the Funds only contractual obligation. Consequently, the Funds outstanding redeemable units are classified as financial liabilities in accordance with the requirements of IAS 32, Financial Instruments: Presentation ( IAS 32 ). The Funds obligations for Net Assets Attributable to Holders of Redeemable Units are presented at the redemption amount. The accounting policies for measuring the fair value of the Funds investments and derivatives are substantially similar to those used in measuring the Funds net asset value ( NAV ) for transactions with unitholders. The NAV is the value of the total assets of a fund less the value of its total liabilities determined, on each valuation day, in accordance with Part 14 of National Instrument , 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 Funds NAV per series unit and net assets per series unit. 18