TD U.S. Blue Chip Equity Fund

Transcription

1 TD U.S. Blue Chip Equity Fund (03/17) 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. as manager of the TD Mutual Fund Trusts and TD Managed Assets Program Portfolios (collectively the Funds and individually the Fund ) and in the case of the latter approved by its 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 information is produced, and the safeguarding of all assets of the Funds. The board of directors of TD Asset Management Inc. is responsible for reviewing and approving the 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 TD Asset Management Inc., manager of the Funds Bruce Cooper Atanaska Novakova Director and Director and Chief Executive Officer Chief Financial Officer March 16, 2017 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 Bond Fund TD High Yield Bond 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. Blue Chip Equity Fund TD U.S. Quantitative Equity Fund TD U.S. Equity Portfolio 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 Target Return Conservative Fund TD Target Return Balanced 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 (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 an 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 U.S. Blue Chip Equity Fund Statements of Financial Position (in 000s except per unit amounts) as at and Assets Current Assets Investments $ 2,210,622 $ 2,480,480 Cash 15,867 12,653 Dividends Receivable 963 1,016 Subscriptions Receivable 4,096 6,491 Receivable for Investments Sold 2,299 3,527 2,233,847 2,504,167 Liabilities Current Liabilities Accrued Liabilities 165 1,507 Redemptions Payable 2, Payable for Investments Purchased ,261 3,118 Net Assets Attributable to Holders of Redeemable Units $ 2,230,586 $ 2,501,049 Net Assets Attributable to Holders of Redeemable Units Per Series (Note 5) Investor Series $ 441,587 $ 516,700 Institutional Series $ 5,848 $ 7,193 Advisor Series $ 138,038 $ 166,484 F-Series $ 66,717 $ 73,739 D-Series $ 4,357 $ 3,097 Private-EM Series $ 197,983 N/A O-Series $ 1,376,056 $ 1,733,836 $ 2,230,586 $ 2,501,049 Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ $ Institutional Series $ $ Advisor Series $ $ F-Series $ $ D-Series $ $ Private-EM Series $ N/A O-Series $ $ The accompanying notes are an integral part of the financial statements. 4

6 ntd U.S. Blue Chip Equity Fund Statements of Comprehensive Income (in 000s except per unit amounts) for the periods ended and Income Foreign Exchange Gain (Loss) on Cash $ (996) $ 120 Securities Lending Income Net Gain (Loss) on Investments and Derivatives Net Gain (Loss) on Investments Interest for Distribution Purposes Dividend Income 18,150 15,386 Net Realized Gain (Loss) 194, ,738 Net Change in Unrealized Appreciation (Depreciation) (285,314) 327,888 Net Gain (Loss) on Investments (72,343) 625,028 Net Gain (Loss) on Derivatives Net Realized Gain (Loss) 0 (33) Net Gain (Loss) on Derivatives 0 (33) Total Net Gain (Loss) on Investments and Derivatives (72,343) 624,995 Total Income (Net) (72,504) 625,296 Expenses (Note 6) Management Fees 14,552 13,042 Securityholder Reporting Costs 22 0 Custodial Fees 3 0 Filing Fees 2 0 Administration Fees 2,000 1,885 Audit Fees 1 0 Independent Review Committee Fees 2 1 Transaction Costs Interest Charges 0 11 Total Expenses before Waivers 17,026 15,355 Less: Waived Expenses (1) (12) Total Expenses (Net) 17,025 15,343 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax (89,529) 609,953 Tax Reclaims (Withholding Taxes) (2,484) (2,174) Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ (92,013) $ 607, Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Investor Series $ (26,692) $ 113,052 Institutional Series $ (257) $ 2,246 Advisor Series $ (8,649) $ 33,621 F-Series $ (2,818) $ 9,221 D-Series $ (64) $ 86 Private-EM Series $ 21,995 N/A O-Series $ (75,528) $ 449,553 $ (92,013) $ 607,779 Weighted Average Units Outstanding for the Period Per Series Investor Series 14,958 14,502 Institutional Series Advisor Series 10,408 9,670 F-Series 3,500 2,097 D-Series Private-EM Series 16,386 N/A O-Series 45,601 53,252 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ (1.79) $ 7.80 Institutional Series $ (1.62) $ Advisor Series $ (0.83) $ 3.48 F-Series $ (0.81) $ 4.40 D-Series $ (0.18) $ 0.63 Private-EM Series $ 1.34 N/A O-Series $ (1.66) $ 8.44 The accompanying notes are an integral part of the financial statements. 5

7 ntd U.S. Blue Chip Equity Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2015 Investor Series Institutional Series Advisor Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 516,700 $ 353,185 $ 7,193 $ 7,912 $ 166,484 $ 100,356 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (26,692) 113,052 (257) 2,246 (8,649) 33,621 Distributions to Holders of Redeemable Units From Net Investment Income From Net Realized Gains on Investments Redeemable Unit Transactions Proceeds from Redeemable Units Issued 88, , ,155 34,230 62,712 Reinvestments of Distributions to Holders of Redeemable Units Early Redemption Fees on Redeemable Units (17) (5) 0 Redemption of Redeemable Units (136,576) (99,418) (1,137) (4,120) (54,022) (30,205) Net Increase (Decrease) from Redeemable Unit Transactions (48,421) 50,463 (1,088) (2,965) (19,797) 32,507 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (75,113) 163,515 (1,345) (719) (28,446) 66,128 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 441,587 $ 516,700 $ 5,848 $ 7,193 $ 138,038 $ 166,484 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 15,354 13, ,049 8,712 Redeemable Units Issued 2,873 4, ,491 4,579 Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (4,464) (3,304) (28) (108) (3,931) (2,242) Redeemable Units Outstanding, End of the Period 13,763 15, ,609 11,049 F-Series D-Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 73,739 $ 18,862 $ 3,097 $ N/A Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (2,818) 9,221 (64) 86 Distributions to Holders of Redeemable Units From Net Investment Income From Net Realized Gains on Investments Redeemable Unit Transactions Proceeds from Redeemable Units Issued 31,991 51,774 4,670 3,131 Reinvestments of Distributions to Holders of Redeemable Units Early Redemption Fees on Redeemable Units (2) Redemption of Redeemable Units (36,193) (6,118) (3,346) (120) Net Increase (Decrease) from Redeemable Unit Transactions (4,204) 45,656 1,324 3,011 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units (7,022) 54,877 1,260 3,097 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 66,717 $ 73,739 $ 4,357 $ 3,097 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 3,920 1, N/A Redeemable Units Issued 1,852 2, Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (2,105) (367) (330) (11) Redeemable Units Outstanding, End of the Period 3,667 3, The accompanying notes are an integral part of the financial statements. 6

8 ntd U.S. Blue Chip Equity Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2015 Private-EM Series O-Series TOTAL Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ N/A N/A $ 1,733,836 $ 1,386,607 $ 2,501,049 $ 1,866,922 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 21,995 N/A (75,528) 449,553 (92,013) 607,779 Distributions to Holders of Redeemable Units From Net Investment Income 0 N/A From Net Realized Gains on Investments 0 N/A N/A Redeemable Unit Transactions Proceeds from Redeemable Units Issued 212,112 N/A 313, , , ,062 Reinvestments of Distributions to Holders of Redeemable Units 0 N/A Early Redemption Fees on Redeemable Units 78 N/A (51) Redemption of Redeemable Units (36,202) N/A (595,385) (553,736) (862,861) (693,717) Net Increase (Decrease) from Redeemable Unit Transactions 175,988 N/A (282,252) (102,324) (178,450) 26,348 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 197,983 N/A (357,780) 347,229 (270,463) 634,127 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 197,983 N/A $ 1,376,056 $ 1,733,836 $ 2,230,586 $ 2,501,049 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period N/A N/A 53,885 57,803 Redeemable Units Issued 21,386 N/A 10,600 15,624 Redeemable Units Issued on Reinvestments 0 N/A 0 0 Redeemable Units Redeemed (3,521) N/A (20,754) (19,542) Redeemable Units Outstanding, End of the Period 17,865 N/A 43,731 53,885 The accompanying notes are an integral part of the financial statements. 7

9 ntd U.S. Blue Chip Equity 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 $ (92,013) $ 607,779 Adjustment For: Unrealized Foreign Exchange (Gain) Loss on Cash 88 (2) Net Realized (Gain) Loss on Sale of Investments and Derivatives (194,757) (281,705) Net Change in Unrealized (Appreciation) Depreciation of Investments 285,314 (327,888) Purchase of Investments (4,665,289) (4,187,458) Proceeds from Sale and/or Maturity of Investments 4,846,004 4,169,703 (Increase) Decrease in Dividends Receivable 42 (317) Increase (Decrease) in Accrued Liabilities (1,342) 508 Net Cash from (used in) Operating Activities 178,047 (19,380) Cash Flows from (used in) Financing Activities Proceeds from Issuances of Redeemable Units 508, ,750 Amounts Paid on Redemption of Redeemable Units, Net of Redemption Fees (683,737) (682,250) Net Cash from (used in) Financing Activities (174,745) 22,500 Unrealized Foreign Exchange Gain (Loss) on Cash (88) 2 Net Increase (Decrease) in Cash 3,302 3,120 Cash (Bank Overdraft) at Beginning of the Period 12,653 9,531 Cash (Bank Overdraft) at End of the Period $ 15,867 $ 12,653 Interest for Distribution Purposes Received*, Net of Withholding Taxes Dividends Received*, Net of Withholding Taxes 15,766 12,909 * 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 U.S. Blue Chip Equity 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 0.4% INDUSTRIALS 0.4% 44,500 Canadian Pacific Railway Limited $ 8,261 $ 8,530 U.S. Equities 91.6% MATERIALS 0.4% 61,200 Ball Corporation 6,116 6,168 2,600 E.I. du Pont de Nemours and Company ,900 Ecolab Inc. 1,426 1,873 3,200 The Sherwin-Williams Company 539 1,155 8,315 9,452 INDUSTRIALS 7.9% 164,100 Alaska Air Group Inc. 16,429 19, ,400 American Airlines Group Inc. 31,653 41, ,500 The Boeing Company 17,735 29,368 70,600 Delta Air Lines Inc. 4,122 4,663 3,392 Equifax Inc ,300 FedEx Corporation 10,399 15, ,950 Fortive Corporation 10,179 19,582 1,900 General Dynamics Corporation ,600 JB Hunt Transport Services Inc. 3,107 4,249 78,905 Johnson Controls International PLC 4,813 4,364 1,500 Kansas City Southern ,800 Norfolk Southern Corporation ,200 Northrop Grumman Corporation 5,503 6,308 6,300 Raytheon Company 1,092 1,201 9,500 Rockwell Collins Inc. 1,184 1,183 26,100 Roper Technologies Inc. 3,617 6,416 81,500 Textron Inc. 4,483 5,314 2,800 Union Pacific Corporation ,000 United Continental Holdings Inc. 9,322 14,091 3,100 Wabtec Corporation , ,280 CONSUMER DISCRETIONARY 24.1% 185,700 Amazon.com Inc. 52, ,965 10,100 AutoZone Inc. 8,143 10,710 31,450 Charter Communications Inc. 9,585 12,158 51,300 Coach Inc. 2,728 2,412 66,000 Comcast Corporation, Class A 5,782 6,119 48,200 Dollar General Corporation 5,332 4,794 8,200 Domino s Pizza Inc. 1,791 1, ,400 Hanesbrands Inc. 3,593 3, ,515 Hilton Worldwide Holdings Inc. 12,939 16, ,800 The Home Depot Inc. 12,274 24,987 11,300 L Brands Inc. 1, ,100 Las Vegas Sands Corporation 7,964 8, ,000 Lowe s Companies Inc. 12,447 21, ,606 Marriott International Inc. 9,538 13, ,500 MGM Resorts International 9,784 13, ,900 Netflix Inc. 12,699 26,911 13,700 Norwegian Cruise Line Holdings Ltd ,200 O Reilly Automotive Inc. 6,440 22,877 No. of Shares or Units/ Par Value Description Cost Fair Value 184,900 Ross Stores Inc. $ 9,703 $ 16,286 76,100 Royal Caribbean Cruises Ltd. 8,838 8,382 91,000 Starbucks Corporation 2,828 6,784 52,763 Tesla Motors Inc. 13,586 15,138 48,400 The Priceline Group Inc. 48,271 95,271 9,200 The Walt Disney Company 1,073 1,287 27,900 Time Warner Inc. 2,826 3,616 51,000 Tractor Supply Company 4,145 5, ,000 Yum! Brands Inc. 9,946 9, , ,863 CONSUMER STAPLES 3.0% 33,200 Constellation Brands Inc. 4,704 6,834 22,500 Costco Wholesale Corporation 3,673 4,837 3,800 Dr Pepper Snapple Group Inc ,000 The Kraft Heinz Company ,200 Molson Coors Brewing Company, Class B NV 5,564 5, ,300 Mondelez International Inc. 9,830 10,196 38,400 Monster Beverage Corporation 2,249 2,286 78,600 Philip Morris International Inc. 10,071 9, ,000 Walgreens Boots Alliance Inc. 23,590 26,224 60,676 66,594 HEALTH CARE 18.3% 156,849 Aetna Inc. 23,985 26,116 5,500 Agilent Technologies Inc ,986 Alexion Pharmaceuticals Inc. 23,143 24,146 98,010 Allergan PLC 33,562 27,636 2,000 Anthem Inc ,700 Becton, Dickinson and Company 11,719 17,048 59,600 Biogen Inc. 15,644 22, ,500 Bristol-Myers Squibb Company 9,621 8,984 5,400 C. R. Bard Inc. 1,563 1,629 1,500 Cardinal Health Inc ,100 Celgene Corporation 12,935 32,807 26,718 Centene Corporation 2,421 2,027 43,100 Cigna Corporation 8,002 7, ,600 Danaher Corporation 26,250 54,827 12,600 DENTSPLY SIRONA Inc. 1, ,700 Eli Lilly and Company 4,237 4,217 5,100 Henry Schein Inc. 1,045 1,039 52,800 Humana Inc. 12,202 14,464 25,200 Intuitive Surgical Inc. 14,709 21,457 1,400 McKesson Corporation ,100 Merck & Co., Inc. 5,454 5,225 1,900 Regeneron Pharmaceuticals Inc ,316 Shire PLC, ADR 11,940 11, ,300 Stryker Corporation 20,159 26, ,300 Thermo Fisher Scientific Inc. 13,777 25, ,500 UnitedHealth Group Incorporated 33,680 50, ,000 Vertex Pharmaceuticals Incorporated 16,201 11, ,300 Zoetis Inc. 7,804 8, , ,628 9

11 TD U.S. Blue Chip Equity Fund No. of Shares or Units/ Par Value Description Cost Fair Value FINANCIALS 7.8% 9,160 Ameriprise Financial Inc. $ 1,001 $ 1, ,500 The Bank of New York Mellon Corporation 11,640 13,391 7,900 BlackRock Inc., Class A 3,510 4, ,100 The Charles Schwab Corporation 9,329 10,763 85,400 Citigroup Inc. 5,465 6,814 27,300 Citizens Financial Group Inc. 1,314 1,306 29,000 CME Group Inc., Class A 3,782 4,491 8,595 First Republic Bank 1,048 1,063 5,900 The Goldman Sachs Group Inc. 1,844 1, ,600 Intercontinental Exchange Inc. 20,868 30, ,100 JPMorgan Chase & Co. 11,764 14, ,200 Marsh & McLennan Companies Inc. 6,079 9, ,700 Morgan Stanley 31,137 48,995 18,700 Northern Trust Corporation 1,641 2,236 20,400 S&P Global Inc. 2,776 2, ,900 State Street Corporation 13,060 18,981 6,700 U.S. Bancorp , ,749 INFORMATION TECHNOLOGY 27.8% 14,100 Activision Blizzard Inc ,506 Alphabet Inc. 32,361 97,935 53,700 Alphabet Inc., Class A 34,254 57, ,000 Apple Inc. 13,334 18, ,100 Electronic Arts Inc. 6,349 10, ,396 Facebook Inc. 52, ,175 73,600 Fidelity National Information Services Inc. 7,223 7, ,900 Fiserv Inc. 11,952 24,244 18,400 FleetCor Technologies Inc. 3,840 3,496 8,300 Global Payments Inc ,700 Intuit Inc. 4,925 5, ,300 MasterCard Incorporated, Class A 23,481 61,315 8,500 Microchip Technology Incorporated ,000 Microsoft Corporation 62,584 79, ,300 PayPal Holdings Inc. 14,663 15, ,213 Red Hat Inc. 6,700 9, ,800 salesforce.com, inc. 21,705 33, ,100 ServiceNow Inc. 19,496 20, ,000 Visa Inc., Class A 31,801 64,738 52,800 Workday Inc. 5,334 4, , ,594 No. of Shares or Units/ Par Value Description Cost Fair Value ITALY 0.2% 58,570 Ferrari NV $ 3,777 $ 4,572 NETHERLANDS 1.2% 204,635 NXP Semiconductors NV 22,813 26,929 SINGAPORE 0.6% 62,700 Broadcom Limited 12,740 14,881 SWITZERLAND 0.1% 8,700 Chubb Limited 1,382 1,543 UNITED KINGDOM 0.8% 5,900 Aon PLC ,400 Delphi Automotive PLC 7,457 7,180 74,081 IHS Markit Ltd. 3,146 3, Pentair PLC ,800 Willis Towers Watson PLC 5,537 5,549 16,958 17,165 Total International Equities 120, ,514 Transaction Costs (385) 0 TOTAL INVESTMENT PORTFOLIO 99.1% $ 1,425,645 $ 2,210,622 OTHER NET ASSETS (LIABILITIES) 0.9% 19,964 TOTAL NET ASSETS 100.0% $ 2,230,586 UTILITIES 0.3% 39,400 NextEra Energy Inc. 6,403 6,319 REAL ESTATE 2.0% 279,000 American Tower Corporation 20,205 39,588 9,400 Equinix Inc. 4,500 4,511 24,705 44,099 Total U.S. Equities 1,297,320 2,043,578 International Equities 7.1% CHINA 4.2% 360,414 Alibaba Group Holding Limited 37,807 42,492 27,700 Baidu Inc., Sponsored ADR 4,337 6, ,080 Ctrip.com International Ltd., ADR 9,784 9,564 1,073,300 Tencent Holdings Limited 10,851 35,253 62,779 93,424 10

12 ntd U.S. Blue Chip Equity Fund Fund-Specific Notes to the Financial Statements (A) The Fund (I) The Fund start date was October 31, (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. TDAM has retained T. Rowe Price Associates, Inc. as sub-adviser for the Fund in addition to TDAM. (III) At, TD and funds managed by TDAM held 61.9% 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 achieve long-term capital growth and provide current income by investing primarily in U.S. common stocks of large and medium-sized blue chip companies with the potential for above-average growth. In seeking to achieve this objective, the Fund invests at least 65 percent of total assets in common stocks of large and medium-sized U.S. blue chip growth companies, which are well established in their industries and have the potential for above-average earnings. The Fund may also invest in foreign stocks, preferred stocks, convertible securities, warrants, investment-grade fixed income securities, hybrids, and private placements. (VI) Private-EM Series was launched on February 4, D-Series was launched on October 20, (B) Management Fees and Administration Fees (Note 6) for the periods ended and 2015 (I) MANAGEMENT FEES (%) Actual Annual Rate (exclusive of GST and HST) Series Maximum* Investor Series Institutional Series Advisor Series F-Series D-Series Private-EM Series N/A O-Series Includes management fees paid by the Fund and the proportionate management fees, if any, of the underlying funds managed by TDAM held by the Fund. However there is no duplication of management fees. * The Fund will reduce the maximum management fee of certain series on or about March 28, Please refer to the Subsequent Events section for further details. The amount payable (in 000s) to TDAM as at for management fees is $0 (2015: $1,192) which is included in Accrued Liabilities on the Statements of Financial Position. (II) ADMINISTRATION FEES (%) Annual Rate (exclusive of GST and HST) Series Investor Series Advisor Series D-Series (C) Brokerage Commissions and Soft Dollars (in 000s) (Notes 3 and 6) for the periods ended and 2015 (I) BROKERAGE COMMISSIONS Total Brokerage Commissions $ 444 $ 416 Paid to Related Parties 0 0 (II) SOFT DOLLARS Soft Dollars $ 136 $ 138 Percentage of Total Commissions (%) (D) Tax Loss Carry Forwards (in 000s) (Note 7) as at Capital Losses $ 158,195 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 2015 is as follows: None Percentage of Amount (in 000s) Total Amount (%) Gross Securities Lending Income $ 1,030 $ Agent fees The Bank of New York Mellon Corp. (195) (42) (18.9) (18.8) Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) Tax Reclaims (Withholding Taxes) (57) (12) (5.5) (5.4) Net Securities Lending Income $ 778 $ (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 $ 281,514 $ 228,948 Fair Value of Collateral Held 299, ,849 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. The amount payable (in 000s) to TDAM as at for administration fees is $145 (2015: $170) which is included in Accrued Liabilities on the Statements of Financial Position. 11

13 TD U.S. Blue Chip Equity Fund Fund-Specific Notes to the Financial Statements (F) Financial Risk Management (Notes 3, 4 and 8) as at and 2015 (I) INTEREST RATE RISK Not significant or applicable to the Fund. (II) CURRENCY RISK The table below indicates the foreign currencies to which the Fund had exposure as at and 2015 in Canadian dollar terms, including the impact of the underlying principal amount of forward currency contracts, if any. The table also illustrates the potential impact to the Fund s net assets if the Fund s functional currency, the Canadian dollar, had strengthened or weakened by 5 percent in relation to all other currencies, with all other variables held constant. In practice, the actual trading results may differ from these approximate sensitivity amounts and the differences could be material. Impact on Total Exposure* (in 000s) Net Assets* (in 000s) Currency Hong Kong Dollar $ 35,253 $ 32,182 $ 1,763 $ 1,609 United States Dollar 2,194,330 2,464, , ,237 Total $ 2,229,583 $ 2,496,915 $ 111,479 $ 124,846 As Percentage of Net Assets (%) * Includes both monetary and non-monetary instruments, where applicable. (III) OTHER PRICE RISK The table below summarizes the impact of other price risk to the Fund. As at and 2015, 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 Russell 1000 Growth Total Return Index (C$) $ 138,164 $ 153, In practice, the actual trading results may differ from the above estimated amounts and the differences could be material. (IV) CREDIT RISK Not significant or applicable to the Fund. (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 $ 2,210,622 $ 0 $ 0 $ 2,210,622 As at the end of the period, 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 2015, 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 2015, the Fund s investment portfolio concentration can be summarized as follows: Canadian Equities Industrials Health Care U.S. Equities Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Utilities Real Estate 2.0 N/A International Equities China Ireland Italy Netherlands Singapore Switzerland United Kingdom Other Net Assets (Liabilities) (H) Interest in Unconsolidated Structured Entities (in 000s) (Note 3) Not significant or applicable to the Fund. (I) Offsetting of Financial Assets and Liabilities (in 000s) (Note 3) as at and 2015 Not significant or applicable to the Fund. (J) Subsequent Events On November 21, 2016, TD Asset Management Inc. announced the following changes to take effect on or about March 28, 2017: The maximum annual management fees of Investor Series and Advisor Series will be lowered from 2.00 percent to 1.85 percent. The maximum annual management fees of F-Series will be lowered from 1.00 percent to 0.95 percent. The maximum annual management fees of D-Series will be lowered from 1.25 percent to 1.20 percent. Level 1 Level 2 Level 3 Total December 31, 2015 Common Shares $ 2,480,480 $ 0 $ 0 $ 2,480,480 As at the end of the period, equity positions with a fair value of $27,142 were transferred from Level 2 to Level 1 as a result of increased activity in the market for those securities. 12

14 nnotes to the Financial Statements 1. The Fund 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 mutual 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 the Fund or series is provided from the inception date. A comparative statement has only been presented for any period for which the Fund was in existence as at the reporting date. The Fund s start date as indicated in the Fund-Specific Notes to the Financial Statements is the date that the Fund 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 Fund recognizes financial instruments at fair value upon initial recognition, plus transaction costs in the case of financial instruments not measured at FVTPL. Regular way purchases and sales of financial instruments are recognized at their trade date. The Fund s non-derivative investments, which are designated at FVTPL, and derivative assets and liabilities, which are classified as held for trading ( HFT ), are measured at FVTPL. 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 Fund has determined that it meets the definition of an investment entity and as a result, it measures subsidiaries, if any, at FVTPL. An investment entity is an entity that: obtains funds from one or more investors for the purpose of providing them with investment manage - ment services; commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and measures and evaluates the performance of substantially all of its investments on a fair value basis. The significant judgment that the Fund has made in determining that it meets this definition is that fair value is the primary measurement attribute used to measure and evaluate the performance of substantially all of its investments. The Fund s investments may also include associates and joint ventures which are designated at FVTPL. The Fund s outstanding redeemable units entitlements include a contractual obligation to distribute any net income and net realized capital gains in cash (at the request of the unitholder) and therefore the ongoing redemption feature is not the Fund s only contractual obligation. Consequently, the Fund s outstanding redeemable units are classified as financial liabilities in accordance with the requirements of IAS 32, Financial Instruments: Presentation ( IAS 32 ). The Fund s obligations for Net Assets Attributable to Holders of Redeemable Units are presented at the redemption amount. The Fund s accounting policies for measuring the fair value of its investments and derivatives are substantially similar to those used in measuring its net asset value ( NAV ) for transactions with unitholders. The NAV is the value of the total assets of a fund less the value of its total liabilities determined, on each valuation day, in accordance with Part 14 of National Instrument , Investment Fund Continuous Disclosure, for the purpose of processing unitholder transactions. Net Assets Attributable to Holders of Redeemable Units, also referred to as net assets, refers to net assets calculated in accordance with IFRS. As at all dates presented, there were no differences between the Fund s NAV per series unit and net assets per series unit. 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 Fund uses the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, TDAM determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. The Fund s policy is to recognize transfers into and out of the fair value hierarchy levels as of the date of the event or change in circumstances giving rise to the transfer. The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter derivatives, is determined using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Valuation techniques include the use of comparable recent arm s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other techniques commonly used by market participants and which make the maximum use of observable inputs. The valuation methodology for specific types of investments held by the Fund is summarized below. (a) Securities not listed on any recognized public securities exchange are valued based on available quotations from recognized dealers in such securities, where readily available. If securities held in the Fund, if any, 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 identification of a uniqueness premium 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. (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 reported in Interest for Distribution Purposes on the Statements of Comprehensive Income. (d) The Fund 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 on the Statements of Comprehensive Income as part of Net Gain (Loss) on Derivatives. (e) The Fund may enter into a forward contract to obtain exposure to a specific type of investment without actually investing directly in such investment. These contracts are valued based on the difference between the contract rate and the current market rate for the underlying investment, at the measurement date. The unrealized gain or loss and the net realized gain or loss from closing out contracts are reflected on the Statements of Comprehensive Income as part of Net Gain (Loss) on Derivatives. (f) The Fund may purchase standardized, exchange-traded futures contracts. Any outstanding futures contracts as at are listed in the Schedule of Investment Portfolio. Any difference between the value at the close of business on the current valuation day and that of the previous valuation day is settled in cash daily and recorded on the Statements of Comprehensive Income as Derivatives Income (Loss). Any amounts receivable (payable) from settlement of futures contracts are reflected on the Statements of Financial Position as Futures Margin Receivable (Payable). Short-term debt instruments as indicated in the Schedule of Investment Portfolio have been segregated and are held as margin against the futures contracts purchased by the Fund. (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 on 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. (h) Investments in underlying funds (mutual funds) are generally valued at the NAV per series unit of the underlying funds as reported by the underlying funds managers. (i) The exchange-traded funds (ETFs) are valued based on quoted market prices at the close of trading on the reporting date. Fair Value Hierarchy The Fund classifies its investment into fair value measurements within a hierarchy that prioritizes the inputs to fair value measurement. The fair value hierarchy has the following three levels: Level 1 Level 2 Level 3 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 Fund s obligation for Net Assets Attributable to Holders of Redeemable Units approximate their fair values due to their short-term nature. Fair values are classified as Level 1 when the related security or derivative is actively traded and a quoted price is available. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred out of Level 1. In such cases, instruments are reclassified into Level 2, unless the measurement of its fair value requires the use of significant unobservable inputs, in which case it is classified as Level 3. 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 Fund, including any Level 3 measurements. The committee meets regularly to perform detailed reviews of the valuations of investments held by the Fund. TDAM utilizes a variety of methods in determining the fair value of securities classified as Level 3. These methods include the use of comparable recent arm s length transactions, discounted cash flow analysis, option pricing models and other techniques commonly used by market participants and which make the use of observable inputs. These methods are based on key inputs such as broker quotations, industry multipliers and discount rates. The classification of the Fund s financial instruments within the fair value hierarchy as at and 2015, and any transfers between levels at end of the 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 and ETFs in which the Fund invests are unconsolidated structured entities. In making this determination, TDAM evaluated the fact that decision making about underlying funds and ETF s activities are generally not governed by voting or similar rights held by the Fund and other investors in any underlying funds and ETFs. The Fund may invest in underlying funds and ETFs whose investment objectives range from achieving short- to long-term income and capital growth potential. The Fund s interests in these securities as at and 2015 are included at their fair value on the Statements of Financial Position, which represent the Fund s exposure in these underlying funds and ETFs. The Fund does not provide and has not committed to provide any additional significant financial or other support to the underlying funds and ETFs. The change in fair value of each of the underlying funds and ETFs during the reporting periods is included in Net Change in Unrealized Appreciation (Depreciation) on the Statements of Comprehensive Income in Net Gain (Loss) on Investments. Additional information on the Fund s interest in underlying funds and ETFs, where applicable, is provided in the Fund-Specific Notes to the Financial Statements. TD MUTUAL FUND TRUSTS 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 securities may include tranches with varying levels of subordination. The Fund may also invest in senior notes that have a first lien on assets and have minimum exposure to junior or subordinate tranches. These securities may provide a monthly payment which consists of both interest and principal payments. 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 2015, the fair value of mortgage-related and other asset-backed securities of the Fund, where applicable, is disclosed as part of the Investments on 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 Unrelaized Appreciation (Depreciation) on Statements of Comprehensive Income in Net Gain (Loss) on Investments. 15