TD Short Term Bond Fund

Transcription

1 TD Short Term Bond 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 Short Term Bond Fund Statements of Financial Position (in 000s except per unit amounts) as at and Assets Current Assets Investments $ 6,196,165 $ 6,246,934 Cash 15,049 44,410 Interest Receivable 28,522 29,473 Subscriptions Receivable 11,092 8,743 Receivable for Investments Sold 25, ,275,938 6,329,560 Liabilities Current Liabilities Accrued Liabilities 1 7 Redemptions Payable 19,681 9,144 19,682 9,151 Net Assets Attributable to Holders of Redeemable Units $ 6,256,256 $ 6,320,409 Net Assets Attributable to Holders of Redeemable Units Per Series (Note 5) Investor Series $ 171,833 $ 220,667 Institutional Series $ 1,065 $ 1,311 Premium Series $ 28,563 $ 48,210 Advisor Series $ 124,804 $ 179,510 F-Series $ 100,095 $ 96,496 Premium F-Series N/A $ 14,071 D-Series $ 2,470 $ 1,809 Private Series $ 1,326,899 $ 1,185,899 O-Series $ 4,500,527 $ 4,572,436 $ 6,256,256 $ 6,320,409 Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ 9.60 $ 9.80 Institutional Series $ 9.86 $ Premium Series $ 9.53 $ 9.73 Advisor Series $ $ F-Series $ $ Premium F-Series N/A $ D-Series $ 9.73 $ 9.93 Private Series $ 9.70 $ 9.90 O-Series $ 9.92 $ The accompanying notes are an integral part of the financial statements. 4

6 ntd Short Term Bond Fund Statements of Comprehensive Income (in 000s except per unit amounts) for the periods ended and Income Foreign Exchange Gain (Loss) on Cash $ 0 $ (1) Securities Lending Income Net Gain (Loss) on Investments Interest for Distribution Purposes 142, ,208 Net Realized Gain (Loss) (33,007) (16,459) Net Change in Unrealized Appreciation/ Depreciation (91,571) (47,265) Net Gain (Loss) on Investments 18,357 86,484 Total Income (Net) 18,887 87,097 Expenses (Note 6) Management Fees 4,930 6,017 Securityholder Reporting Costs Custodial Fees 9 12 Filing Fees 5 5 Audit Fees 3 4 Independent Review Committee Fees 2 2 Total Expenses before Waivers 5,054 6,142 Less: Waived Expenses (1) (1) Total Expenses (Net) 5,053 6,141 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax 13,834 80,956 Tax Reclaims (Withholding Taxes) (11) 0 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 13,823 $ 80,956 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series* Investor Series $ (1,336) $ 823 Institutional Series $ (1) $ 21 Premium Series $ (176) $ 206 Advisor Series $ (1,064) $ 410 F-Series $ (305) $ 762 Premium F-Series 60 $ 111 D-Series $ (18) $ 3 Private Series $ 2,988 $ 15,508 O-Series $ 13,675 $ 63,112 $ 13,823 $ 80,956 Weighted Average Units Outstanding for the Period Per Series* Investor Series 19,937 20,785 Institutional Series Premium Series 3,981 5,025 Advisor Series 14,757 18,940 F-Series 10,253 9,029 Premium F-Series 1,045 1,421 D-Series Private Series 119, ,065 O-Series 433, ,268 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Unit* Investor Series $ (0.07) $ 0.04 Institutional Series $ 0.00 $ 0.13 Premium Series $ (0.04) $ 0.04 Advisor Series $ (0.07) $ 0.02 F-Series $ (0.03) $ 0.08 Premium F-Series 0.06 $ 0.08 D-Series $ (0.08) $ 0.02 Private Series $ 0.02 $ 0.13 O-Series $ 0.03 $ 0.14 * Series related to the converted and/or terminated series are for the period ended March 28, Refer to the Significant Events in the Fund-Specific Notes to the Financial Statements for further details. The accompanying notes are an integral part of the financial statements. 5

7 ntd Short Term Bond Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2016 Investor Series Institutional Series Premium Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 220,667 $ 135,249 $ 1,311 $ 2,131 $ 48,210 $ 46,492 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (1,336) 823 (1) 21 (176) 206 Distributions to Holders of Redeemable Units From Net Investment Income (2,523) (2,735) (23) (35) (547) (731) From Net Realized Gains on Investments (2,523) (2,735) (23) (35) (547) (731) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 10, , ,896 20,402 Reinvestments of Distributions to Holders of Redeemable Units 2,448 2, Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (58,375) (68,020) (259) (841) (21,236) (18,738) Net Increase (Decrease) from Redeemable Unit Transactions (44,975) 87,330 (222) (806) (18,924) 2,243 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (48,834) 85,418 (246) (820) (19,647) 1,718 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 171,833 $ 220,667 $ 1,065 $ 1,311 $ 28,563 $ 48,210 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 22,517 13, ,955 4,729 Redeemable Units Issued 1,122 15, ,077 Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (5,988) (6,880) (25) (83) (2,195) (1,910) Redeemable Units Outstanding, End of the Period 17,902 22, ,998 4,955 Advisor Series F-Series Premium F-Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 179,510 $ 185,072 $ 96,496 $ 83,571 $ 14,071 $ 11,691 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (1,064) 410 (305) Distributions to Holders of Redeemable Units From Net Investment Income (1,834) (2,222) (1,849) (1,731) (46) (281) From Net Realized Gains on Investments (1,834) (2,222) (1,849) (1,731) (46) (281) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 21,882 81,191 61,732 64, ,387 Reinvestments of Distributions to Holders of Redeemable Units 1,646 1,986 1,272 1, Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (75,336) (86,927) (57,251) (51,654) (14,128) (9,079) Net Increase (Decrease) from Redeemable Unit Transactions (51,808) (3,750) 5,753 13,894 (14,085) 2,550 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (54,706) (5,562) 3,599 12,925 (14,071) 2,380 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 124,804 $ 179,510 $ 100,095 $ 96,496 $ N/A $ 14,071 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 17,552 17,905 9,422 8,075 1,406 1,156 Redeemable Units Issued 2,152 7,879 6,062 6, ,126 Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (7,407) (8,425) (5,632) (4,998) (1,410) (900) Redeemable Units Outstanding, End of the Period 12,459 17,552 9,977 9,422 N/A 1,406 The accompanying notes are an integral part of the financial statements. 6

8 ntd Short Term Bond Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2016 D-Series Private Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 1,809 $ 319 $ 1,185,899 $ N/A Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (18) 3 2,988 15,508 Distributions to Holders of Redeemable Units From Net Investment Income (34) (19) (27,866) (24,869) From Net Realized Gains on Investments (34) (19) (27,866) (24,869) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 1,214 1, ,450 1,795,452 Reinvestments of Distributions to Holders of Redeemable Units , Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (531) (211) (622,591) (600,209) Net Increase (Decrease) from Redeemable Unit Transactions 713 1, ,878 1,195,260 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 661 1, ,000 1,185,899 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 2,470 $ 1,809 $ 1,326,899 $ 1,185,899 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period ,743 N/A Redeemable Units Issued , ,807 Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (53) (21) (63,360) (60,066) Redeemable Units Outstanding, End of the Period , ,743 O-Series TOTAL Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 4,572,436 $ 4,055,279 $ 6,320,409 $ 4,519,804 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 13,675 63,112 13,823 80,956 Distributions to Holders of Redeemable Units From Net Investment Income (104,061) (111,196) (138,783) (143,819) From Net Realized Gains on Investments (104,061) (111,196) (138,783) (143,819) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 778, ,973 1,662,724 3,084,223 Reinvestments of Distributions to Holders of Redeemable Units 104, , , ,849 Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (864,167) (502,927) (1,713,874) (1,338,606) Net Increase (Decrease) from Redeemable Unit Transactions 18, ,241 60,807 1,863,468 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (71,909) 517,157 (64,153) 1,800,605 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 4,500,527 $ 4,572,436 $ 6,256,256 $ 6,320,409 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 451, ,562 Redeemable Units Issued 77,586 93,661 Redeemable Units Issued on Reinvestments 10,356 10,900 Redeemable Units Redeemed (85,796) (49,361) Redeemable Units Outstanding, End of the Period 453, ,762 The accompanying notes are an integral part of the financial statements. 7

9 ntd Short Term Bond 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 $ 13,823 $ 80,956 Adjustment For: Net Realized (Gain) Loss on Sale of Investments 33,007 16,459 Net Change in Unrealized Appreciation/ Depreciation of Investments 91,571 47,265 Purchase of Investments (3,009,436) (8,974,414) Proceeds from Sale and/or Maturity of Investments 2,910,517 8,485,835 (Increase) Decrease in Interest Receivable 951 (5,505) Increase (Decrease) in Accrued Liabilities (6) (421) Net Cash from (used in) Operating Activities 40,427 (349,825) Cash Flows from (used in) Financing Activities Distributions Paid to Holders of Redeemable Units, Net of Reinvested Distributions (26,826) (25,970) Proceeds from Issuances of Redeemable Units 1,641,594 1,736,707 Amounts Paid on Redemption of Redeemable Units, Net of Early Redemption Fees (1,684,556) (1,316,668) Net Cash from (used in) Financing Activities (69,788) 394,069 Net Increase (Decrease) in Cash (29,361) 44,244 Cash (Bank Overdraft) at Beginning of the Period 44, Cash (Bank Overdraft) at End of the Period $ 15,049 $ 44,410 Interest for Distribution Purposes Received*, Net of Withholding Taxes $ 143,886 $ 144,703 * 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 Short Term Bond 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 Bonds 99.0% FEDERAL BONDS & GUARANTEES 21.3% Canada Housing Trust No. 1 74,000, % due June 15, 2020 $ 74,618 $ 73, ,000, % due December 15, ,188 98, ,000, % due June 15, ,923 97, ,000, % due December 15, , , ,500, % due June 15, , ,126 Government of Canada 190,000, % due March 01, , , ,000, % due March 01, , , ,000, % due June 01, , , ,000, % due September 01, , ,672 1,359,200 1,334,543 PROVINCIAL BONDS & GUARANTEES 16.2% Hydro One Inc. 30,000, % due October 09, ,835 30,245 21,000, % due June 01, ,056 22,110 19,500, % due February 24, ,768 19,255 Province of Alberta 146,500, % due June 01, , ,225 30,000, % due September 01, ,392 29,232 Province of British Columbia 20,000, % due December 18, ,945 20,887 56,000, % due December 18, ,629 58,823 Province of Manitoba 20,000, % due February 11, ,249 21,182 7,000, % due June 03, ,830 7,366 40,000, % due September 05, ,465 39,245 Province of Ontario 115,000, % due September 08, , , ,000, % due June 02, , , ,000, % due June 02, , , ,000, % due March 08, , ,439 Province of Quebec 95,000, % due December 01, , ,575 36,000, % due December 01, ,416 38,115 1,044,338 1,011,522 MUNICIPAL BONDS 0.2% Municipal Finance Authority of British Columbia 15,000, % due June 02, ,364 15,064 CORPORATE BONDS 61.3% Bank of Montreal 17,500, % due September 13, ,824 17,676 50,000, % due March 04, ,437 50,279 16,000, % due June 04, ,675 16,229 57,000, % due October 06, ,089 56,726 37,800, % due March 31, ,127 37,232 52,600, % due October 28, ,206 51,045 30,000, % due March 16, ,513 29,570 21,900, % due July 11, ,899 21,675 No. of Shares or Units/ Par Value Description Cost Fair Value The Bank of Nova Scotia 40,700, % due March 14, 2019 $ 41,230 $ 40,945 25,000, % due October 28, ,403 25,130 7,500, % due January 13, ,601 7,515 40,200, % due June 15, ,263 40,089 66,200, % due September 09, ,282 65,867 60,000, % due January 11, ,371 61,609 12,000, % due June 04, ,697 12,184 26,900, % due December 02, ,892 26,350 39,900, % due April 27, ,885 38,789 40,400,000 Callable 2.36% due November 08, ,394 40,018 bcimc Realty Corporation 21,100, % due August 02, ,095 21,242 27,000, % due June 03, ,518 26,740 Bell Canada Inc. 33,000, % due June 18, ,434 33,570 49,000, % due June 17, ,122 50,047 30,000, % due October 01, ,162 29,378 BMW Canada Inc. 17,400, % due September 26, ,497 17,471 23,800, % due November 26, ,921 23,892 10,600, % due October 19, ,597 10,440 42,700, % due December 11, ,700 42,112 Canadian Imperial Bank of Commerce 28,000, % due June 24, ,265 28,124 68,275, % due July 14, ,239 67,611 47,100, % due April 26, ,636 46,410 52,500, % due July 12, ,561 51,168 67,000, % due March 21, ,474 65,837 Canadian Natural Resources Limited 25,000, % due June 19, ,248 25,274 5,000, % due December 03, ,620 5,022 25,900, % due June 01, ,894 25,631 Canadian Pacific Railway Company 5,000, % due June 01, ,440 5,091 Capital Desjardins Inc. 25,000, % due May 05, ,554 26,574 Caterpillar Financial Services Limited 10,000, % due June 03, ,999 9,962 CU Inc. 3,334, % due January 23, ,870 3,456 Daimler Canada Finance Inc. 7,300, % due August 19, ,289 7,251 26,000, % due May 25, ,000 25,534 14,600, % due November 23, ,600 14,555 30,100, % due December 16, ,090 29,722 30,900, % due November 22, ,986 30,724 Enbridge Gas Distribution Inc. 53,000, % due November 23, ,366 55,694 Enbridge Pipelines Inc. 40,000, % due November 12, ,145 41,816 46,000, % due April 06, ,546 48,206 Federation des caisses Desjardins du Quebec 62,000, % due November 19, ,213 62,543 50,500, % due July 17, ,107 50,783 71,000, % due March 02, ,638 70,299 20,000, % due January 17, ,849 19,709 22,900, % due August 25, ,900 22,734 Finning International Inc. 1,500, % due July 03, ,553 1,525 9

11 TD Short Term Bond Fund No. of Shares or Units/ Par Value Description Cost Fair Value Ford Auto Securitization Trust 6,000,000 Callable 1.423% due April 15, 2021 $ 6,000 $ 5,953 Ford Credit Canada Company 20,100, % due September 16, ,078 20,231 9,500, % due February 23, ,500 9,399 15,000, % due June 22, ,000 14,834 18,600, % due September 19, ,600 18,825 HCN Canadian Holdings-1 L.P. 10,000, % due November 25, ,019 10,227 Honda Canada Finance Inc. 21,900, % due August 12, ,911 21,747 30,000, % due February 18, ,034 29,816 18,580, % due December 19, ,580 18,459 HSBC Bank Canada 23,400, % due November 26, ,421 23,451 39,000, % due May 13, ,164 39,214 40,000, % due January 14, ,387 40,546 29,000, % due July 07, ,406 28,651 30,000, % due January 29, ,876 30,032 47,800, % due June 29, ,351 46,949 Husky Energy Inc. 27,987, % due March 12, ,190 29,481 Inter Pipeline Ltd. 31,605, % due July 30, ,872 31,957 John Deere Canada Funding Inc. 16,200, % due July 16, ,161 16,290 13,300, % due March 24, ,299 13,073 National Bank of Canada 27,000, % due August 09, ,900 27,176 39,200, % due March 03, ,072 38,804 30,000, % due March 18, ,810 29,540 Nissan Canada Financial Services Inc. 30,200, % due April 09, ,903 29,825 26,900, % due October 19, ,900 26,919 North West Redwater Partnership/ NWR Financing Company Ltd. 30,000,000 Callable 2.10% due February 23, ,819 29,411 OMERS Realty Corporation 36,400, % due November 12, ,727 36,629 20,000, % due April 05, ,011 20,386 RioCan Real Estate Investment Trust 26,000, % due March 05, ,551 26,058 45,000, % due June 28, ,577 46,028 11,700, % due August 26, ,700 11,594 12,200, % due April 09, ,200 12,020 Rogers Communications Inc. 36,000, % due March 13, ,073 36,323 20,000, % due November 04, ,499 21,135 11,000, % due September 29, ,181 11,675 30,000, % due March 22, ,886 32,636 25,000, % due June 06, ,652 26,416 Royal Bank of Canada 17,750, % due July 12, ,819 17,856 31,500, % due October 11, ,897 31,770 49,100, % due December 11, ,029 49,522 61,000, % due December 09, ,672 61,240 56,900, % due July 17, ,002 56,424 27,100, % due March 15, ,090 26,814 49,300, % due July 15, ,337 48,061 45,200, % due September 13, ,054 43,851 30,000, % due March 21, ,599 29,428 45,000, % due December 05, ,996 44,562 No. of Shares or Units/ Par Value Description Cost Fair Value Shaw Communications Inc. 35,000, % due February 19, 2021 $ 35,835 $ 35,629 TELUS Corporation 67,500, % due December 04, ,800 71,095 31,000, % due July 23, ,604 33,067 25,000,000 Callable 2.35% due March 28, ,877 24,710 The Toronto-Dominion Bank* 73,460, % due April 02, ,216 72,632 8,500, % due June 24, ,766 8,569 69,600, % due March 08, ,878 69,009 83,200, % due March 23, ,570 81,708 Toyota Credit Canada Inc. 21,600, % due November 21, ,026 21,789 16,000, % due November 19, ,998 16,103 23,400, % due February 19, ,372 23,213 15,700, % due February 28, ,695 15,428 25,300, % due October 11, ,413 25,372 TransCanada PipeLines Limited 45,000, % due November 15, ,581 47,135 Ventas Canada Finance Limited 33,998, % due September 30, ,392 34,397 VW Credit Canada Inc. 6,000, % due August 20, ,981 6,036 30,300, % due October 01, ,634 30,411 27,600, % due June 24, ,311 27,424 Wells Fargo Canada Corporation 37,400, % due November 15, ,843 37,716 54,000, % due July 25, ,414 54,710 Westcoast Energy Inc. 40,458, % due July 02, ,790 42,570 3,891,717 3,835,036 Total Canadian Bonds 6,310,619 6,196,165 TOTAL INVESTMENT PORTFOLIO 99.0% $ 6,310,619 $ 6,196,165 OTHER NET ASSETS (LIABILITIES) 1.0% 60,091 TOTAL NET ASSETS 100.0% $ 6,256,256 * Related party to the Fund as an affiliated entity of TD Asset Management Inc. 10

12 ntd Short Term Bond Fund Fund-Specific Notes to the Financial Statements (A) The Fund (I) The Fund start date was January 23, (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) At, TD and funds managed by TDAM held 54.7% (2016: 60.0%) of the net assets of the Fund. (IV) The presentation and functional currency of the Fund is the Canadian dollar. (V) The investment objective of the Fund is to seek to maximize income while simultaneously preserving investment capital and liquidity. In seeking to achieve this objective, the Fund invests primarily in debt obligations with the terms to maturity of up to five years issued or guaranteed by the Canadian federal or provincial governments, or any agency of such governments, or any debt obligations of Schedule I Canadian chartered banks, loan or trust companies, or corporations. The Fund focuses on the Canadian corporate debt market as well as global macroeconomic trends. Generally, the Fund utilizes a bottom-up strategy using diligent credit analysis combined with a buy-and-hold strategy to seek to add value, enhance long-term performance, and reduce risk. (VI) Private Series was launched on February 4, (VII) Any related party holdings as at (2016: 4.1%), 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 Institutional Series Premium Series 0.90* Advisor Series F-Series Premium F-Series 0.45* D-Series Private 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. Effective March 28, 2017, the management fee rate charged to Advisor Series and D-Series was changed from 1.21% to 1.00% and 0.90% to 0.80%, respectively. Effective July 27, 2017, the management fee rate charged to Institutional Series was changed from 0.39% to 0.40%. Prior to July 27, 2017, TDAM was entitled to charge a maximum rate of 0.75% for the Institutional Series. * The rate disclosed represents the maximum annual rate per the simplified prospectus dated July 28, The series is no longer being offered under the most recent simplified prospectus. Refer to the Significant Events section for further details. 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. (C) Brokerage Commissions and Soft Dollars (in 000s) (Notes 3 and 6) for the periods ended and 2016 Not significant or applicable to the Fund. (D) Tax Loss Carry Forwards (in 000s) (Note 7) as at Capital Losses $ 51,734 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 $ 660 $ Agent fees The Bank of New York Mellon Corp. (130) (153) (19.7) (19.9) Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) Tax Reclaims (Withholding Taxes) (11) 0 (1.7) 0.0 Net Securities Lending Income $ 519 $ (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 $ 776,628 $ 745,779 Fair Value of Collateral Held 816, ,591 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. (II) ADMINISTRATION FEES (%) (exclusive of GST and HST) Not applicable for the Fund. 11

13 TD Short Term Bond 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 $ 467,781 $ 538, years 5,728,384 5,708,050 Total $ 6,196,165 $ 6,246,934 Impact on Net Assets (000s) $ 175,135 $ 173,711 Impact on Net Assets (%) (II) CURRENCY RISK Not significant or applicable to the Fund. (III) OTHER PRICE RISK Not significant or applicable to the Fund. (IV) CREDIT RISK The table below summarizes the debt instruments by credit ratings as at and (G) Investment Portfolio Concentration (%) (Note 8) As at and 2016, the Fund s investment portfolio concentration can be summarized as follows: Canadian Bonds Federal Bonds & Guarantees Provincial Bonds & Guarantees Municipal Bonds Corporate Bonds Global Bonds United States 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. (I) Offsetting of Financial Assets and Liabilities (in 000s) (Note 3) as at and 2016 Not significant or applicable to the Fund. (J) Significant Events The following changes were made: The Premium Series was closed to all purchases effective March 28, The Premium F-Series was closed to all purchases effective end of business on November 21, 2016 and was terminated on March 28, Percentage of Percentage of Total Bonds (%) Total Net Assets (%) Credit Rating AAA AA A BBB Total Credit ratings are obtained from Standard & Poor s, Moody s or DBRS rating agencies. (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 Bonds $ 0 $ 6,196,165 $ 0 $ 6,196,165 December 31, 2016 Bonds $ 0 $ 6,246,934 $ 0 $ 6,246,934 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. 12

14 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. 13

15 nnotes to the Financial Statements 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 Funds use the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, TDAM determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. The Funds policy is to recognize transfers into and out of the fair value hierarchy levels at the end of reporting periods. 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 Funds use a variety of methods and make 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. The valuation methodology for specific types of investments held by the Funds is summarized below. (a) Securities not listed on any recognized public securities exchange are valued based on available quotations from recognized dealers in such securities, where readily available. If securities have no available broker-dealer bid/ask quotes, TDAM uses its own pricing model to price the securities. The pricing model will generally include the discounted cash flow valuation approach, the use of a credit spread based on the terms of the security and the use of such credit and yield analysis comparables as TDAM believes are relevant in the circumstances. Debt instruments are valued based on mid prices, where readily available. Other valuation techniques may be used, as described above, where applicable. (b) Short-term debt instruments, repurchase and reverse repurchase agreements are valued based on quotations received from recognized investment dealers. (c) Real return bonds are valued based on the available public quotations from recognized dealers. Changes in the inflation factor are included in Interest for Distribution Purposes in the Statements of Comprehensive Income. (d) The Funds may use foreign exchange forward contracts to hedge against or profit from fluctuations in foreign exchange rates. These contracts are valued on each valuation day based on the difference between the contract rates and the current forward rates at the measurement date applied to the contracts notional amount. The net change in unrealized appreciation or depreciation and the net realized gain or loss from closing out contracts are reflected in the Statements of Comprehensive Income as part of Net Gain (Loss) on Derivatives. (e) The Funds 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. (f) The Funds may purchase standardized, exchange-traded futures contracts. Any difference between the value at the close of business on the current valuation day and that of the previous valuation day is settled in cash daily and recorded in the Statements of Comprehensive Income as Derivatives Income (Loss). Any 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 Funds, as applicable. (g) 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 or exercised, the difference between the premium and the amount paid or received, or the full amount of the premium if the option expires worthless, is reflected in the Statements of Comprehensive Income as part of Net Gain (Loss) on Derivatives. The cost of a security purchased will be reduced by the premium received on options when a written put option is exercised or increased by the amount paid on options when a purchased option is exercised. (h) Investments in underlying conventional mutual funds and TD Exchange-Traded Funds are generally valued at the NAV per series unit of the investment funds as reported by the investment funds managers. (i) The exchange-traded funds (ETFs) that are not managed by TDAM are valued based on quoted market prices at the close of trading on the reporting date. Fair Value Hierarchy The Funds classify their investments into fair value measurements within a hierarchy that prioritizes the inputs to fair value measurement. The fair value hierarchy has the following three levels: Level 1 Level 2 Level 3 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). 14

16 nnotes to the Financial Statements 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 Funds obligation for Net Assets Attributable to Holders of Redeemable Units approximate their fair values due to their short-term nature. Fair values are classified as Level 1 when the related security or 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. 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. 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. TDAM has a Global Fair Value Committee which oversees the performance of the fair value measurements included in the financial statements of the Funds, including any Level 3 measurements. TDAM utilizes a variety of methods (as listed in the Fair Value Measurement section) in determining the fair value of securities classified as Level 3. The committee also meets quarterly to perform reviews of the valuations of investments held by the Funds. The classification of the Funds financial instruments within the fair value hierarchy as at December and 2016, and any transfers between levels at end of the reporting period as a result of changes in the lowest level input that is significant to the fair value measurement are disclosed in the Fund-Specific Notes to the Financial Statements, where applicable. Interest in Unconsolidated Structured Entities A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. TDAM has determined that all of the underlying funds in which the Funds invest are unconsolidated structured entities. In making this determination, TDAM evaluated the fact that decision making about underlying funds activities is generally not governed by voting or similar rights held by the Funds and other investors in any underlying funds. The Funds may invest in underlying funds whose investment objectives range from achieving short- to long-term income and capital growth potential. The Funds interests in these securities as at December 31, 2017 and 2016 are included at their fair value in the Statements of Financial Position, which represent the Funds exposure in these underlying funds. The Funds do not provide and have not committed to provide any additional significant financial or other support to the underlying funds. The change in fair value of each of the underlying funds during the reporting periods is included in Net Change in Unrealized Appreciation/Depreciation in the Statements of Comprehensive Income in Net Gain (Loss) on Investments. Additional information on the Funds interest in underlying funds, where applicable, is provided in the Fund- Specific Notes to the Financial Statements. The TD Mutual Fund Trusts may also invest in mortgage-related and other asset-backed securities that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property. Mortgage-related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. The debt and equity securities issued by these issuers may include tranches with varying levels of subordination. These Funds 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. Other asset-backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans. As at and 2016, the fair value of mortgage-related and other asset-backed securities of these Funds, where applicable, is disclosed as part of the Investments 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 during the reporting periods are included in the Net Change in Unrealized Appreciation/Depreciation in the Statements of Comprehensive Income in Net Gain (Loss) on Investments. Translation of Foreign Currencies A Fund s functional currency, as disclosed in the Fund-Specific Notes to the Financial Statements, 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. Realized foreign exchange gains and losses on income are recognized in invest - ment income in the Statements of Comprehensive Income. 15