TD Emerging Markets Low Volatility Fund

Transcription

1 TD Emerging Markets Low Volatility Fund (03/18) TD Mutual Funds for the period ended This contains financial highlights, but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, at no cost, by calling , by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8, by to td.mutualfunds@td.com, or by visiting our website at tdassetmanagement.com or the SEDAR website at sedar.com Securityholders may also contact us or visit our website to get a copy of the investment fund s interim financial report, proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure at no cost.

2 ntd Emerging Markets Low Volatility Fund Management Discussion of Fund Performance Investment Objectives and Strategies The investment objective of TD Emerging Markets Low Volatility Fund (the Fund ) is to seek to achieve long-term capital appreciation by investing primarily in, or gaining exposure to, equity securities of issuers in emerging market countries, while seeking to reduce volatility. In seeking to achieve this objective, the Fund invests in a diversified portfolio of emerging market stocks which are included in the MSCI Emerging Markets Index, with a focus on stocks with lower volatility. The Fund seeks to optimize the portfolio by overweighting stocks expected to deliver less volatile returns and underweighting or excluding stocks expected to deliver more volatile returns. The Port folio Adviser currently uses historical standard deviation as a tool in selecting the stocks, looking at individual stocks and the correlation between stocks, with the aim of reducing volatility. As a result of this strategy, the Fund may not fully benefit from strong equity markets. Risk The risks of investing in the Fund remain as outlined in the simplified prospectus. Results of Operations The Investor Series units of the Fund returned 14.2 percent for the year ended ( Reporting Period ), versus 28.3 percent for the Fund s product benchmark, MSCI Emerging Markets Index (Net Dividend, C$) ( MSCI Emerging Markets Index (ND, C$) ). Returns for other series of the Fund may vary, largely due to differences in fees and expenses. Unlike the benchmark, the Fund s return is quoted after the deduction of fees and expenses. Market Update During the Reporting Period, the global economy showed continued signs of strength. China made large investments in infrastructure, which led to improved industrial profits in that country. Meanwhile, domestic consumption remained high in China, and was helped by falling unemployment figures. Export activity also increased in response to the improving global economy. Brazil s economy also expanded. Brazilian exports increased in response to higher prices for agricultural commodities. Inflation stabilized considerably, which led Brazil s central bank to reduce interest rates from the higher levels that had previously reduced consumer consumption and investments. The Russian economy benefited from increased consumer consumption and export activity, as well as higher energy prices near the end of the Reporting Period. The improved global economy helped drive the individual economies of many commodity-exporting countries in the emerging markets. Unlike many other commodity-importing emerging markets, however, India struggled in response to government-imposed initiatives that removed large denominations of its currency from the economy. These initiatives were previously introduced to combat tax evasion and corruption. Furthermore, the introduction of a tax on goods and services, aimed at boosting tax revenues, reduced manufacturing and investment. Despite uncertainty surrounding North American Free Trade Agreement negotiations, Mexico s economy advanced during the Reporting Period. Employment improved, and the recent increase in the peso helped moderate the country s inflationary pressures. Emerging markets equities posted gains and outperformed their developed market peers. Global economic growth and increased trade contributed to higher share prices. Chinese equities posted gains in response to increased domestic consumption and industrial output, as well as increased global trade. Latin American equities also posted gains, partially as a result of rising commodity prices. Key Contributors/Detractors During the Reporting Period, the Fund underperformed the bench - mark as the result of strong equity market performance, which was in line with the expectations for this Fund. Both sector allocation and stock selection detracted from the Fund s performance. Stocks within the information technology sector performed well during the Reporting Period, but the Fund had less exposure to the sector and greater exposure to the utilities sector, which detracted from performance. Additionally, stock selection within both sectors detracted from the Fund s performance. Greater exposure to the telecommunication services sector detracted from performance, but this was slightly offset by stock selection within the sector. Stock selection within the financials and consumer discretionary sectors detracted from relative performance. Exposure to Taiwan and stock selection within South Korea and South Africa detracted from performance. Low exposure to and stock selection in China also detracted from the Fund s performance. Recent Developments Looking ahead, the Portfolio Adviser continues to be mindful of a variety of macroeconomic factors that may influence the per - formance of financial markets. Economic indicators remain robust, with trade, industrial production, job creation and construction activity all positive. While these may further support solid economic growth, any optimism should be balanced against potential risks, including geopolitical developments, trade protectionism and central bank actions. Given the above, the Portfolio Adviser expects central banks around the world to continue winding down their respective stimulus measures. However, inflation has remained subdued despite improving economic growth and production, and the Portfolio Adviser believes this trend may continue in 2018, with elevated debt levels, demographic trends and technology acting as price restraints. Subdued inflation may moderate the need for significantly higher interest rates. As a result, the Portfolio Adviser anticipates that central banks may raise interest rates only modestly during 2018, which would extend the low-yield environment for fixed income investors. Solid economic growth may drive corporate earnings and, in turn, support equity returns. However, the Portfolio Adviser does not expect equity gains to be as robust as they were during the Reporting Period. 1

3 In the Portfolio Adviser s view, monetary policy easing by global central banks may succeed in stabilizing the emerging markets growth rate. On the other hand, the Portfolio Adviser anticipates that household debt reduction will hinder the move towards consumer-led economic growth since consumers will spend less as they focus on lowering debt; this could pose risks to China s economic outlook. As such, the Portfolio Adviser plans to maintain the Fund s current exposure to China and Brazil. Related Party Transactions Affiliates of TD Asset Management Inc. ( TDAM ) may earn fees and spreads in connection with various services provided to, or transactions with, the Fund, such as in connection with banking, custody, brokerage and derivatives transactions. Buying and Selling Securities: TDAM has established an independent review committee ( IRC ) which acts as an impartial and independent committee to review and provide recommendations or, if appropriate, approvals respecting any conflict of interest matters referred to it by TDAM. The IRC prepares, at least annually, a report of its activities for securityholders of the Fund. The report is available on the TDAM website at tdassetmanagement.com or at the securityholder s request at no cost by contacting TDAM (see front cover). The Fund did not engage in any portfolio transactions requiring IRC approval during the Reporting Period. Manager, Trustee and Portfolio Adviser: TDAM, a wholly-owned subsidiary of The Toronto-Dominion Bank ( TD ), is the manager, trustee and portfolio adviser of the Fund. The Fund pays TDAM an annual management fee, which may vary for each series of Fund units, and an annual admin istration fee of 0.35 percent with respect to the Investor Series, Advisor Series, H-Series, T-Series and D-Series units of the Fund. Distributor: Certain series units of the Fund are distributed through brokers and dealers including TD Waterhouse Canada Inc. ( TDW ), a wholly-owned subsidiary of TD. TDW, like other dealers, is paid a trailer commission by TDAM for distrib uting certain series of units of the Fund. Trailer commissions are paid by TDAM out of the management fees it receives from the Fund and are based on the average value of assets held by each dealer. Registrar and Transfer Agent: TD is the registrar and transfer agent of the Fund, and as such maintains all unitholder records, processes purchase, switch, conversion and redemption orders, issues investor statements and prepares annual tax reporting information on behalf of the Fund. TD earns a foreign exchange spread when unitholders switch between units of funds denominated in different currencies. The Fund also maintains bank accounts and overdraft provisions with TD for which TD earns a fee. Administration and Securityholder Services: TDW, in addition to acting as a dealer, also provides administration and securityholder services to the Private Series units of the Fund for which such costs are reflected in the operating expenses for the Private Series units of the Fund. These services include securityholder account maintenance and reporting. 2

4 Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past five fiscal years, as applicable. Net Assets per Unit ($) 1 INVESTOR SERIES * Net Assets, Beginning of Year Total Revenue Total Expenses (excluding distributions) (0.33) (0.33) (0.39) (0.34) (0.10) Realized Gains (Losses) for the Period (0.11) (0.18) Unrealized Gains (Losses) for the Period 1.35 (0.14) (1.29) Total Increase (Decrease) from Operations (0.14) (1.12) From Net Investment Income (excluding dividends) (0.10) (0.54) (0.10) (0.02) 0.00 From Dividends From Capital Gains (0.18) 0.00 Return of Capital Total Annual Distributions 3 (0.10) (0.54) (0.10) (0.20) 0.00 Net Assets at December ADVISOR SERIES * Net Assets, Beginning of Year Total Revenue Total Expenses (excluding distributions) (0.33) (0.33) (0.38) (0.34) (0.11) Realized Gains (Losses) for the Period (0.11) (0.24) Unrealized Gains (Losses) for the Period 1.42 (0.31) (1.13) Total Increase (Decrease) from Operations (0.38) (0.96) From Net Investment Income (excluding dividends) (0.12) (0.55) (0.09) (0.04) 0.00 From Dividends From Capital Gains (0.10) 0.00 Return of Capital Total Annual Distributions 3 (0.12) (0.55) (0.09) (0.14) 0.00 Net Assets at December F-SERIES * Net Assets, Beginning of Year Total Revenue Total Expenses (excluding distributions) (0.20) (0.18) (0.23) (0.19) (0.07) Realized Gains (Losses) for the Period (0.12) (0.22) Unrealized Gains (Losses) for the Period 1.38 (0.54) (1.24) 0.00 (0.46) Total Increase (Decrease) from Operations (0.42) (1.03) 0.36 (0.42) From Net Investment Income (excluding dividends) (0.25) (0.55) (0.23) (0.08) 0.00 From Dividends From Capital Gains (0.07) 0.00 Return of Capital Total Annual Distributions 3 (0.25) (0.55) (0.23) (0.15) 0.00 Net Assets at December Footnotes for the above table(s) can be found at the end of the Net Assets per Unit section. 3

5 Net Assets per Unit ($) 1 (continued) H-SERIES * 2013 Net Assets, Beginning of Year N/A Total Revenue N/A Total Expenses (excluding distributions) (0.37) (0.42) (0.51) (0.55) N/A Realized Gains (Losses) for the Period (0.14) (0.02) N/A Unrealized Gains (Losses) for the Period (0.71) 1.85 N/A Total Increase (Decrease) from Operations (0.07) 1.79 N/A From Net Investment Income (excluding dividends) (0.11) (0.60) (0.13) (0.03) N/A From Dividends N/A From Capital Gains (0.08) N/A Return of Capital (0.81) (0.93) (1.08) (0.79) N/A Total Annual Distributions 3 (0.92) (1.53) (1.21) (0.90) N/A Net Assets at December N/A S-SERIES * 2013 Net Assets, Beginning of Year N/A Total Revenue N/A Total Expenses (excluding distributions) (0.22) (0.22) (0.30) (0.24) N/A Realized Gains (Losses) for the Period (0.14) (0.16) (0.24) 0.11 N/A Unrealized Gains (Losses) for the Period 2.50 (0.08) (2.52) 0.40 N/A Total Increase (Decrease) from Operations (2.48) 0.60 N/A From Net Investment Income (excluding dividends) (0.25) (0.63) (0.28) (0.11) N/A From Dividends N/A From Capital Gains (0.12) N/A Return of Capital (0.83) (0.95) (1.09) (0.71) N/A Total Annual Distributions 3 (1.08) (1.58) (1.37) (0.94) N/A Net Assets at December N/A T-SERIES * 2013 Net Assets, Beginning of Year N/A Total Revenue N/A Total Expenses (excluding distributions) (0.38) (0.41) (0.52) (0.36) N/A Realized Gains (Losses) for the Period (0.12) (0.18) (0.14) 0.17 N/A Unrealized Gains (Losses) for the Period 1.36 (0.01) (2.21) 0.05 N/A Total Increase (Decrease) from Operations (2.28) 0.33 N/A From Net Investment Income (excluding dividends) (0.13) (0.63) (0.11) (0.06) N/A From Dividends N/A From Capital Gains (0.19) N/A Return of Capital (0.80) (0.92) (1.07) (0.77) N/A Total Annual Distributions 3 (0.93) (1.55) (1.18) (1.02) N/A Net Assets at December N/A Footnotes for the above table(s) can be found at the end of the Net Assets per Unit section. 4

6 Net Assets per Unit ($) 1 (continued) D-SERIES * Net Assets, Beginning of Year N/A N/A Total Revenue N/A N/A Total Expenses (excluding distributions) (0.22) (0.22) (0.23) N/A N/A Realized Gains (Losses) for the Period (0.09) (0.09) (0.22) N/A N/A Unrealized Gains (Losses) for the Period (1.15) N/A N/A Total Increase (Decrease) from Operations (1.28) N/A N/A From Net Investment Income (excluding dividends) (0.15) (0.34) (0.05) N/A N/A From Dividends N/A N/A From Capital Gains N/A N/A Return of Capital N/A N/A Total Annual Distributions 3 (0.15) (0.34) (0.05) N/A N/A Net Assets at December N/A N/A PRIVATE SERIES 2017* Net Assets, Beginning of Year N/A N/A N/A N/A Total Revenue 0.35 N/A N/A N/A N/A Total Expenses (excluding distributions) (0.08) N/A N/A N/A N/A Realized Gains (Losses) for the Period (0.14) N/A N/A N/A N/A Unrealized Gains (Losses) for the Period 0.67 N/A N/A N/A N/A Total Increase (Decrease) from Operations N/A N/A N/A N/A From Net Investment Income (excluding dividends) (0.14) N/A N/A N/A N/A From Dividends 0.00 N/A N/A N/A N/A From Capital Gains 0.00 N/A N/A N/A N/A Return of Capital 0.00 N/A N/A N/A N/A Total Annual Distributions 3 (0.14) N/A N/A N/A N/A Net Assets at December N/A N/A N/A N/A O-SERIES * Net Assets, Beginning of Year Total Revenue Total Expenses (excluding distributions) (0.07) (0.07) (0.09) (0.07) (0.01) Realized Gains (Losses) for the Period (0.11) (0.20) (0.09) Unrealized Gains (Losses) for the Period 1.45 (0.17) Total Increase (Decrease) from Operations From Net Investment Income (excluding dividends) (0.40) (0.75) (0.12) (0.19) 0.00 From Dividends From Capital Gains (0.10) 0.00 Return of Capital Total Annual Distributions 3 (0.40) (0.75) (0.12) (0.29) 0.00 Net Assets at December This information is derived from the Fund s audited annual financial statements. The Fund adopted International Financial Reporting Standards ( IFRS ) on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles ( GAAP ) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value ( NAV ) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund s accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the NAV for transactions with unitholders. 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial periods. These tables are not intended to be a reconciliation of the net assets per unit. 3 Distributions were paid in cash or reinvested in additional units of the Fund, or both. * Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date. Initial offering price. 5

7 Ratios and Supplemental Data INVESTOR SERIES Total Net Asset Value ($000s) ,231 Number of Units Outstanding (000s) Management Expense Ratio (%) Waivers or Absorptions (%) Trading Expense Ratio (%) Portfolio Turnover Rate (%) Net Asset Value per Unit ($) ADVISOR SERIES Total Net Asset Value ($000s) 1 1,818 2,026 3,761 3, Number of Units Outstanding (000s) Management Expense Ratio (%) Waivers or Absorptions (%) Trading Expense Ratio (%) Portfolio Turnover Rate (%) Net Asset Value per Unit ($) F-SERIES Total Net Asset Value ($000s) 1 5,585 4,397 8,962 5, Number of Units Outstanding (000s) Management Expense Ratio (%) Waivers or Absorptions (%) Trading Expense Ratio (%) Portfolio Turnover Rate (%) Net Asset Value per Unit ($) H-SERIES Total Net Asset Value ($000s) N/A Number of Units Outstanding (000s) N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Trading Expense Ratio (%) N/A Portfolio Turnover Rate (%) N/A Net Asset Value per Unit ($) N/A S-SERIES Total Net Asset Value ($000s) N/A Number of Units Outstanding (000s) N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Trading Expense Ratio (%) N/A Portfolio Turnover Rate (%) N/A Net Asset Value per Unit ($) N/A T-SERIES Total Net Asset Value ($000s) N/A Number of Units Outstanding (000s) N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Trading Expense Ratio (%) N/A Portfolio Turnover Rate (%) N/A Net Asset Value per Unit ($) N/A Footnotes for the above table(s) can be found at the end of the Ratios and Supplemental Data section. 6

8 Ratios and Supplemental Data (continued) D-SERIES Total Net Asset Value ($000s) N/A N/A Number of Units Outstanding (000s) N/A N/A Management Expense Ratio (%) N/A N/A Waivers or Absorptions (%) N/A N/A Trading Expense Ratio (%) N/A N/A Portfolio Turnover Rate (%) N/A N/A Net Asset Value per Unit ($) N/A N/A PRIVATE SERIES Total Net Asset Value ($000s) 1 4,473 N/A N/A N/A N/A Number of Units Outstanding (000s) N/A N/A N/A N/A Management Expense Ratio (%) N/A N/A N/A N/A Waivers or Absorptions (%) 0.24 N/A N/A N/A N/A Trading Expense Ratio (%) N/A N/A N/A N/A Portfolio Turnover Rate (%) N/A N/A N/A N/A Net Asset Value per Unit ($) N/A N/A N/A N/A O-SERIES Total Net Asset Value ($000s) 1 68,581 65, ,969 45,072 0 Number of Units Outstanding (000s) 1 6,120 6,650 13,788 4,099 0 Management Expense Ratio (%) 2, Waivers or Absorptions (%) Trading Expense Ratio (%) Portfolio Turnover Rate (%) Net Asset Value per Unit ($) This information is provided as at December 31 of the past five fiscal years, as applicable. 2 Management expense ratio ( MER ) is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) net of any waivers or absorptions for the stated period, including the Fund s proportionate share of the MER, if any, of the underlying fund(s) in which the Fund has invested in, and is expressed as an annualized percentage of daily average NAV during the period. Any waivers or absorptions may be discontinued at any time by TDAM at its discretion without notice. 3 The trading expense ratio ( TER ) represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average NAV during the stated period. Where a Fund invests in units of any underlying fund, the TER presented for the Fund includes the portion of TERs, if available, of the underlying fund(s) attributable to this investment. 4 The Fund s portfolio turnover rate ( PTR ) indicates how actively the Fund s portfolio adviser manages its investments. A PTR of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the stated period. The higher a fund s PTR, the greater the trading costs payable, directly or indirectly, by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the fiscal year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. 5 The Fund does not pay any management fees or operating expenses with respect to the O-Series units of the Fund, but may have a MER as a result of its holdings in underlying fund(s), representing the weighted average MER of those underlying fund(s) for the reporting period. Less than $500 Less than 500 units 7

9 Management Fees As manager and trustee of the Fund, TDAM is responsible for the overall business and affairs of the Fund, including activities related to making units of the Fund available to investors, and providing, or arranging for the provision of, investment advisory services and marketing services to the Fund. In consideration for the provision of such services, each series of the Fund, other than O-Series units and Private Series units, pays TDAM a management fee. Management fees are calculated and accrued as a percentage of the net asset value of each series of units of the Fund, as of the close of business on each business day for each series and are paid monthly to TDAM. Prior to July 27, 2017, the simplified prospectus disclosed the maximum management fee rate that TDAM could charge for each series of units of the Fund (so the actual management fee charged to the Fund might have been less than the maximum management fee rate). TDAM was able to charge the maximum management fee without notice to unitholders. Effective July 27, 2017, the simplified prospectus discloses a specified annual management fee rate. Where TDAM chooses to charge a management fee rate below the specified annual management fee rate, the difference represents a waiver of management fees. TDAM may waive all or a portion of the management fees being charged to the Fund, which may be discontinued at any time by TDAM at its discretion without notice to unitholders. The annual management fees and a breakdown of the major services rendered for each series, as a percentage of the management fees paid, are as follows: Past Performance The following charts show how the Fund has performed in the past, and can help you understand the risks of investing in the Fund. These returns include the reinvestment of all distributions and would be lower if an investor did not reinvest distributions. They do not include deduction of sales, switch, redemption, or other optional charges (which dealers may charge) or income taxes payable, and these returns would be lower if they did. The Fund s past performance does not necessarily indicate how it will perform in the future. Year-by-year returns The bar charts show how the Fund s performance has varied from year to year for each of the years shown. They show in percentage terms how an investment made on January 1 would have increased or decreased by December 31. Waived Annual Dealer Operating (expressed as a %) Mgmt. Fees Compensation Expenses Other Investor Series Advisor Series F-Series H-Series S-Series T-Series D-Series Private Series 0.00 N/A N/A N/A O-Series 0.00 N/A N/A N/A There are no management fees paid by the Fund in respect of Private Series units of the Fund and there are no management fees or expenses paid by the Fund in respect of O-Series units of the Fund. Unitholders in the O-Series pay a negotiated fee directly to TDAM. Unitholders in the Private Series pay a negotiated fee directly to TDAM or their dealer or TD Waterhouse Private Investment Counsel Inc. Investment advisory, trustee, marketing services and other. 8

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11 Annual Compound Returns The following table shows the annual compound total returns for each series of units of the Fund for each of the periods indicated ended on, compared with the following benchmarks: Product Benchmark: MSCI Emerging Markets Index (ND, C$) This index includes stocks of companies in the emerging market countries of the world, net of withholding taxes. General market indices: MSCI Emerging Markets Index (ND, C$). Since Past 5 Past 3 Past (expressed as a %) inception years years year (Start date September 10, 2013) INVESTOR SERIES 3.8 N/A Product Benchmark 10.9 N/A MSCI Emerging Markets Index (ND, C$) 10.9 N/A (Start date September 10, 2013) ADVISOR SERIES 3.8 N/A Product Benchmark 10.9 N/A MSCI Emerging Markets Index (ND, C$) 10.9 N/A (Start date September 10, 2013) F-SERIES 5.3 N/A Product Benchmark 10.9 N/A MSCI Emerging Markets Index (ND, C$) 10.9 N/A (Start date April 15, 2014) H-SERIES 2.7 N/A Product Benchmark 10.4 N/A MSCI Emerging Markets Index (ND, C$) 10.4 N/A Since Past 5 Past 3 Past (expressed as a %) inception years years year (Start date April 15, 2014) S-SERIES 4.4 N/A Product Benchmark 10.4 N/A MSCI Emerging Markets Index (ND, C$) 10.4 N/A (Start date April 15, 2014) T-SERIES 2.7 N/A Product Benchmark 10.4 N/A MSCI Emerging Markets Index (ND, C$) 10.4 N/A (Start date February 10, 2015) D-SERIES 0.0 N/A N/A 15.1 Product Benchmark 9.1 N/A N/A 28.3 MSCI Emerging Markets Index (ND, C$) 9.1 N/A N/A 28.3 (Start date March 7, 2017) PRIVATE SERIES 10.6 N/A N/A N/A Product Benchmark 18.0 N/A N/A N/A MSCI Emerging Markets Index (ND, C$) 18.0 N/A N/A N/A (Start date October 8, 2013) O-SERIES 6.4 N/A Product Benchmark 10.7 N/A MSCI Emerging Markets Index (ND, C$) 10.7 N/A Over the Reporting Period, units of the Investor Series and Advisor Series returned 14.2 percent, F-Series returned 15.8 percent, H-Series returned 14.3 percent, S-Series returned 15.9 percent, T-Series returned 14.1 per - cent, D-Series returned 15.1 percent and O-Series returned 17.2 percent. This compares to a return of 28.3 percent for MSCI Emerging Markets Index (ND, C$). Since its commencement of operations on March 7, 2017, the Private Series returned 10.6 percent versus 18.0 percent for MSCI Emerging Markets Index (ND, C$) over the same period. Variations in the returns for the different series of the Fund are largely due to differences in fees and expenses. Unlike the index, the Fund s return is quoted after the deduction of fees and expenses. The Fund continues to favour stocks that deliver less volatile returns, and to maintain underweight positions in or exclude stocks that are expected to deliver more volatile returns. During the Reporting Period, the Fund lagged the benchmark in a strong up market and this was in line with the expectations for the strategy of this Fund. 10

12 Summary of Investment Portfolio as at % of Net Asset Value as at % of Net Asset Value ASSET ALLOCATION Emerging Markets Equities 95.9 Index Equivalents 1.8 Non-Emerging Markets Equities 0.3 Cash 2.3 Other Net Assets (Liabilities) (0.3) GEOGRAPHIC ALLOCATION Taiwan 18.9 South Korea 13.9 Malaysia 12.5 China 9.2 Thailand 8.9 Chile 6.8 South Africa 4.3 Russia 4.2 Turkey 4.1 Brazil 2.1 Other Countries Emerging Markets 11.0 Other Countries Non-Emerging Markets 0.3 Index Equivalents 1.8 Cash 2.3 Other Net Assets (Liabilities) (0.3) TOTAL NET ASSET VALUE (000s) $ 82,389 TOP 25 INVESTMENTS* 1. Cash Banco de Chile CEZ AS Malayan Banking Berhad TAV Havalimanlari Holding AS Want Want China Holdings Limited Aguas Andinas SA Taiwan Semiconductor Manufacturing Company Limited SK Telecom Company Ltd Formosa Plastics Corporation SK hynix Inc PETRONAS Chemicals Group Berhad Turkiye Petrol Rafinerileri AS Formosa Petrochemical Corporation Chunghwa Telecom Company Ltd KT Corporation Credicorp Ltd Suzano Papel e Celulose SA Jiangsu Expressway Company Ltd Taiwan Mobile Company Ltd PAO Gazprom Nestle Malaysia Berhad Vodacom Group Limited Hankook Tire Company Ltd Aboitiz Power Corporation 1.4 Total % of Net Asset Value represented by these holdings 40.8 * The holdings represent a combination of the Fund s holdings and its exposure to holdings of the exchange-traded funds the Fund invested in. Note: Totals may not add due to rounding to one decimal place of individual figures. The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund. Updates are available quarterly. You may obtain the most current quarterly information by contacting TD Mutual Funds at , by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto, Ontario, M5K 1G8, or by to td.mutualfunds@td.com 11

13 Caution regarding forward-looking statements Certain portions of this report, including, but not limited to, Results of Operations and Recent Developments, may contain forward-looking statements including, but not limited to, statements about the Fund, its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future general economic, political and relevant market factors, such as interest rates, foreign exchange rates, equity and capital markets, and the general business environment, in each case assuming no changes to applicable tax or other laws or government regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable. Accordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and relevant market factors in North America and internationally, interest and foreign exchange rates, equity and capital markets, business competition, technological change, changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events. The above mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing any undue reliance on forward-looking statements. Further, there is no specific intention of updating any forward-looking statements contained herein whether as a result of new information, future events or otherwise. For Funds with references to FTSE TMX Canada indices: FTSE TMX Global Debt Capital Markets Inc FTSE is a trade mark of FTSE International Ltd and is used under licence. TMX is a trade mark of TSX Inc. and is used under licence. All rights in the FTSE TMX Global Debt Capital Markets Inc. s indices and/or FTSE TMX Global Debt Capital Markets Inc. s ratings vest in FTSE TMX Global Debt Capital Markets Inc. and/or its licensors. Neither FTSE TMX Global Debt Capital Markets Inc. nor its licensors accept any liability for any errors or omissions in such indices and/or ratings or underlying data. No further distribution of FTSE TMX Global Debt Capital Markets Inc. s data is permitted without FTSE TMX Global Debt Capital Markets Inc. s express written consent. TD Mutual Funds, TD Pools and the TD Managed Assets Program portfolios are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers. All trademarks are the property of their respective owners. The TD logo and other trade-marks are the property of The Toronto-Dominion Bank. 12