TD Emerging Markets Fund

Transcription

1 TD Emerging Markets Fund (08/17) TD Mutual Funds for the period ended

2 nmanagement s Responsibility for Financial Reporting The accompanying unaudited interim financial report has 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 information is produced, and the safeguarding of all assets of the Funds. The board of directors of TDAM is responsible for reviewing and approving the interim financial report and overseeing management s performance of its financial reporting responsibilities. On behalf of TDAM, manager of the Funds. Bruce Cooper David Lambie Director and Director and Chief Executive Officer Chief Financial Officer August 15, 2017 August 15, 2017 nnotice to Unitholders The Auditor of the Funds has not reviewed the TD Mutual Fund Trusts in this Financial Report TDAM, as manager of the Funds, appoints an independent auditor to audit the Funds annual financial statements. Applicable securities laws require that if an auditor has not reviewed the Funds interim financial report, this must be disclosed in an accompanying notice. 1

3 ntd Emerging Markets Fund Statements of Financial Position (in 000s except per unit amounts) as at and December 31, 2016 (Unaudited) June 30, December 31, Assets Current Assets Investments $ 187,702 $ 165,881 Cash 3,734 2,718 Dividends Receivable Subscriptions Receivable Receivable for Investments Sold Derivative Assets Rights 0 6 Unrealized Appreciation on Open Foreign Exchange Forward Contracts , ,363 Liabilities Current Liabilities Accrued Liabilities Redemptions Payable Payable for Investments Purchased , Net Assets Attributable to Holders of Redeemable Units $ 191,049 $ 168,845 Net Assets Attributable to Holders of Redeemable Units Per Series (Note 5) Investor Series $ 135,235 $ 126,513 Advisor Series $ 12,802 $ 12,353 F-Series $ 9,846 $ 3,411 Private-EM Series $ 1,947 $ 1,370 O-Series $ 31,219 $ 25,198 $ 191,049 $ 168,845 Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ $ Advisor Series $ $ F-Series $ $ Private-EM Series $ $ O-Series $ $ The accompanying notes are an integral part of the interim financial report. 2

4 ntd Emerging Markets Fund Statements of Comprehensive Income (in 000s except per unit amounts) for the periods ended and 2016 (Unaudited) Income Foreign Exchange Gain (Loss) on Cash $ (38) $ (221) Securities Lending Income Net Gain (Loss) on Investments and Derivatives Net Gain (Loss) on Investments Interest for Distribution Purposes 14 8 Dividend Income 2,170 1,831 Net Realized Gain (Loss) 7,075 1,703 Net Change in Unrealized Appreciation/ Depreciation 18,669 (2,050) Net Gain (Loss) on Investments 27,928 1,492 Net Gain (Loss) on Derivatives Net Realized Gain (Loss) (196) (171) Net Change in Unrealized Appreciation/ Depreciation (6) 32 Net Gain (Loss) on Derivatives (202) (139) Total Net Gain (Loss) on Investments and Derivatives 27,726 1,353 Total Income (Net) 27,704 1,154 Expenses (Note 6) Management Fees 1,863 1,435 Securityholder Reporting Costs 1 1 Custodial Fees 1 1 Administration Fees Independent Review Committee Fees 1 1 Transaction Costs Interest Charges 0 1 Total Expenses before Waivers 2,394 1,827 Less: Waived Expenses 0 (1) Total Expenses (Net) 2,394 1,826 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax 25,310 (672) Tax Reclaims (Withholding Taxes) (375) (183) Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 24,935 $ (855) Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Investor Series $ 18,302 $ (653) Advisor Series $ 1,785 $ (273) F-Series $ 316 $ 6 Private-EM Series $ 209 $ 81 O-Series $ 4,323 $ (16) Weighted Average Units Outstanding for the Period Per Series $ 24,935 $ (855) Investor Series 7,160 6,395 Advisor Series F-Series Private-EM Series O-Series 1, Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Series Unit Investor Series $ 2.56 $ (0.10) Advisor Series $ 3.34 $ (0.42) F-Series $ 1.83 $ 0.06 Private-EM Series $ 1.67 $ 0.66 O-Series $ 2.35 $ (0.14) The accompanying notes are an integral part of the interim financial report. 3

5 ntd Emerging Markets Fund Statements of Changes in Net Assets Attributable to Holders of Redeemable Units (in 000s) for the periods ended and 2016 (Unaudited) Investor Series Advisor Series F-Series Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 126,513 $ 93,333 $ 12,353 $ 14,133 $ 3,411 $ 2,108 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 18,302 (653) 1,785 (273) Distributions to Holders of Redeemable Units Redeemable Unit Transactions Proceeds from Redeemable Units Issued 7,759 50,530 3,582 3,701 6,470 1,643 Reinvestments of Distributions to Holders of Redeemable Units Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (17,339) (11,733) (4,918) (2,821) (351) (548) Net Increase (Decrease) from Redeemable Unit Transactions (9,580) 38,797 (1,336) 880 6,119 1,095 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 8,722 38, ,435 1,101 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 135,235 $ 131,477 $ 12,802 $ 14,740 $ 9,846 $ 3,209 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 7,441 5, Redeemable Units Issued 413 3, Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (927) (739) (203) (141) (13) (24) Redeemable Units Outstanding, End of the Period 6,927 7, Private-EM Series O-Series TOTAL Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 1,370 $ N/A $ 25,198 $ 1,673 $ 168,845 $ 111,247 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units ,323 (16) 24,935 (855) Distributions to Holders of Redeemable Units Redeemable Unit Transactions Proceeds from Redeemable Units Issued 487 1,250 3, ,736 57,258 Reinvestments of Distributions to Holders of Redeemable Units Early Redemption Fees on Redeemable Units Redemption of Redeemable Units (119) 0 (1,740) (218) (24,467) (15,320) Net Increase (Decrease) from Redeemable Unit Transactions 368 1,250 1,698 (84) (2,731) 41,938 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 577 1,331 6,021 (100) 22,204 41,083 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 1,947 $ 1,331 $ 31,219 $ 1,573 $ 191,049 $ 152,330 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 125 N/A 1, Redeemable Units Issued Redeemable Units Issued on Reinvestments Redeemable Units Redeemed (9) 0 (101) (16) Redeemable Units Outstanding, End of the Period , The accompanying notes are an integral part of the interim financial report. 4

6 ntd Emerging Markets Fund Statements of Cash Flows (in 000s) for the periods ended and 2016 (Unaudited) Cash Flows from (used in) Operating Activities Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 24,935 $ (855) Adjustment For: Unrealized Foreign Exchange (Gain) Loss on Cash 31 4 Net Realized (Gain) Loss on Sale of Investments and Derivatives (6,879) (1,532) Net Change in Unrealized Appreciation/ Depreciation of Investments and Derivatives (18,663) 2,018 Purchase of Investments (42,213) (62,914) Proceeds from Sale and/or Maturity of Investments 45,949 71,805 (Increase) Decrease in Dividends Receivable (135) (621) Increase (Decrease) in Accrued Liabilities Net Cash from (used in) Operating Activities 3,354 7,984 Cash Flows from (used in) Financing Activities Proceeds from Issuances of Redeemable Units 21,332 4,564 Amounts Paid on Redemption of Redeemable Units, Net of Early Redemption Fees (23,639) (12,712) Net Cash from (used in) Financing Activities (2,307) (8,148) Unrealized Foreign Exchange Gain (Loss) on Cash (31) (4) Net Increase (Decrease) in Cash 1,047 (164) Cash (Bank Overdraft) at Beginning of the Period 2,718 1,856 Cash (Bank Overdraft) at End of the Period $ 3,734 $ 1,688 Interest for Distribution Purposes Received*, Net of Withholding Taxes $ 14 $ 8 Dividends Received*, Net of Withholding Taxes $ 1,661 $ 1,028` * Included as part of Cash Flows from (used in) Operating Activities. The accompanying notes are an integral part of the interim financial report. 5

7 ntd Emerging Markets Fund Schedule of Investment Portfolio (in 000s except number of Shares or Units/Par Value) as at (Unaudited) No. of Shares or Units/ Par Value Description Cost Fair Value U.S. Equities 1.4% CONSUMER DISCRETIONARY 1.4% 503,400 Samsonite International SA $ 1,561 $ 2,726 International Equities 96.8% ARGENTINA 2.6% 9,288 Banco Macro SA, ADR 922 1,110 19,215 Grupo Financiero Galicia SA, ADR 765 1,063 8,721 MercadoLibre Inc. 1,519 2,837 3,206 5,010 AUSTRIA 1.0% 37,750 Erste Group Bank AG 1,336 1,874 BRAZIL 6.9% 229,798 Banco Bradesco SA 2,120 2,532 7,866 Banco Bradesco SA, Sponsored ADR ,094 BRF SA 1,819 1, ,008 Itau Unibanco Holding SA 2,694 2, ,375 Lojas Renner SA 1,517 1, ,777 Petroleo Brasileiro SA Petrobras 3,502 2,407 66,544 Raia Drogasil SA 987 1,836 12,704 13,276 CHILE 0.6% 101,260 S.A.C.I. Falabella 970 1,075 CHINA 16.8% 26,900 Alibaba Group Holding Limited 3,162 4,915 6,222,000 Bank of China Limited 3,370 3,958 2,652,910 China Construction Bank Corporation 2,393 2, ,000 China Mengniu Dairy Company Limited ,200 China Pacific Insurance (Group) Company Ltd. 1,835 1, ,500 CRCC High-Tech Equipment Corporation Limited ,000 CSPC Pharmaceutical Group Limited ,943 JD.com Inc., ADR 975 1,523 1,819 NetEase Inc., ADR ,673 New Oriental Education & Technology Group Inc., Sponsored ADR ,000 PetroChina Company Limited, Class H ,000 Shenzhou International Group Holdings Limited ,149 TAL Education Group, ADR 373 1, ,200 Tencent Holdings Limited 3,838 10, ,800 Zoomlion Heavy Industry Science and Technology Company Limited ,037 32,012 CZECH REPUBLIC 1.1% 40,634 Komercni banka AS 1,977 2,111 EGYPT 0.6% 208,922 Commercial International Bank (Egypt) S.A.E. 1,328 1,196 GERMANY 0.7% 5,669 adidas AG 1,206 1,409 No. of Shares or Units/ Par Value Description Cost Fair Value HONG KONG 3.3% 205,600 AIA Group Limited $ 1,641 $ 1, ,000 China Mobile Limited 2,199 2, ,000 China Overseas Land & Investment Ltd ,000 China Unicom (Hong Kong) Limited 1,059 1, ,000 Sino Biopharmaceutical Limited ,772 6,325 HUNGARY 1.2% 53,012 OTP Bank PLC 2,108 2,301 INDIA 8.9% 862,444 Ashok Leyland Limited 1,107 1, ,500 Bharat Petroleum Corporation Limited 1,264 1,879 72,099 Housing Development Finance Corporation Limited 2,444 2,336 81,037 ICICI Bank Limited ,300 ICICI Bank Limited, Sponsored ADR ,778 IndusInd Bank Limited 1,181 2, ,965 Marico Limited 1,854 2,377 13,242 Maruti Suzuki India Limited 1,131 1,918 5,469 Shree Cement Limited 1,070 1, ,869 Zee Entertainment Enterprises Limited 1,610 1,734 12,635 17,018 INDONESIA 5.3% 2,154,200 P.T. Astra International Tbk 1,828 1,872 1,383,200 P.T. Bank Mandiri (Persero) Tbk 1,569 1,719 4,784,500 P.T. Bumi Serpong Damai Tbk ,364,500 P.T. Semen Indonesia (Persero) Tbk 1,358 1, ,000 P.T. Unilever Indonesia Tbk 1,440 1,505 2,918,200 P.T. XL Axiata Tbk ,230,000 Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk 1,761 1,863 9,869 10,105 MALAYSIA 3.7% 851,000 Genting Malaysia Berhad 1,401 1, ,000 IHH Healthcare Berhad 1,681 1, ,246 Malayan Banking Berhad 1,421 1, ,300 Malaysia Airports Holdings Berhad 1, ,400 Sime Darby Berhad 1,483 1,525 7,049 7,058 MEXICO 6.0% 198,205 Alsea SAB de CV ,737 CEMEX SAB de CV, Sponsored ADR 1,739 2,305 18,672 Fomento Economico Mexicano SAB de CV, Sponsored ADR 2,123 2, ,867 Grupo Financiero Banorte SAB de CV, Series O 3,143 3,718 95,002 Grupo Financiero Santander Mexico SAB de CV, ADR 1,140 1, ,491 Mexichem, SAB de CV ,000 11,551 PAKISTAN 1.1% 81,000 Lucky Cement Limited ,758 United Bank Ltd. 1,043 1,225 1,605 2,063 PANAMA 0.7% 8,405 Copa Holdings SA, Class A 760 1,275 PERU 1.1% 9,041 Credicorp Ltd. 1,367 2,103 6

8 TD Emerging Markets Fund No. of Shares or Units/ Par Value Description Cost Fair Value PHILIPPINES 2.8% 1,600,200 Ayala Land Inc. $ 1,542 $ 1, ,303 Metropolitan Bank & Trust Company 1,729 1,775 95,962 SM Investments Corporation 1,282 1,980 4,553 5,390 POLAND 3.8% 14,837 Bank Zachodni WBK SA 1,632 1,777 19,773 CCC SA 1,160 1, LPP SA 989 1, ,437 Powszechna Kasa Oszczednosci Bank Polski SA 1,792 2,273 33,574 Powszechny Zaklad Ubezpieczen SA ,104 7,262 PORTUGAL 0.8% 57,699 Jeronimo Martins SGPS SA 1,043 1,461 RUSSIA 2.8% 21,725 Mail.Ru Group Limited, GDR ,919 MMC Norilsk Nickel PJSC, ADR ,898 PAO Gazprom, Sponsored ADR 1,865 1,514 31,202 X5 Retail Group NV, Sponsored GDR 1,048 1,402 31,044 Yandex NV 746 1,056 4,904 5,339 SOUTH AFRICA 3.6% 125,317 AVI Limited 1,154 1,180 13,763 Capitec Bank Holdings Limited 1,087 1,132 63,379 Clicks Group Ltd ,141 Mondi PLC ,489 Naspers Limited 459 1, ,512 Steinhoff International Holdings NV 1,774 1,638 5,640 6,879 SOUTH KOREA 10.7% 2,829 AMOREPACIFIC Corporation 1, ,171 CJ Corporation 1,393 1,325 10,636 Coway Company Ltd ,254 9,902 Hanwha Techwin Company Ltd ,951 Hugel Inc ,237 22,465 Hyundai Development Company 1,141 1,196 10,120 Hyundai Motor Company 1,682 1, INNOCEAN WORLDWIDE Inc ,412 Korea Aerospace Industries Ltd. 1,549 1,319 3,527 Mando Corporation 854 1,029 No. of Shares or Units/ Par Value Description Cost Fair Value 2,306 NAVER Corporation $ 1,891 $ 2,190 3,011 Samsung Electronics Company Ltd. 4,249 7,522 16,164 20,434 SWITZERLAND 0.5% 9,641 DKSH Holding Ltd ,015 TAIWAN 8.1% 718,769 Advanced Semiconductor Engineering Inc. 1,022 1,197 59,398 Advantech Company Ltd ,303 Delta Electronics Inc. 1,277 1, ,307 E.SUN Financial Holding Company Ltd ,410 Hon Hai Precision Industry Company Ltd. 1,516 2,276 7,000 Largan Precision Company Ltd. 1,132 1,447 75,000 Nien Made Enterprise Company Ltd , ,017 Taiwan Semiconductor Manufacturing Company Limited 3,133 5, ,486 Uni-President Enterprises Corp ,385 10,901 15,389 THAILAND 2.1% 1,130,100 Bangkok Dusit Medical Services Public Company Limited ,500 Central Pattana Public Company Limited 877 1,112 95,300 PTT Public Company Limited 1,442 1, ,700 Sino-Thai Engineering & Construction Public Company Limited ,925 4,045 Total International Equities 148, ,976 Transaction Costs (357) TOTAL INVESTMENT PORTFOLIO 98.2% $ 149,205 $ 187,702 FORWARD CONTRACTS (SCHEDULE 1) 0.0% 0 OTHER NET ASSETS (LIABILITIES) 1.8% 3,347 TOTAL NET ASSETS 100.0% $ 191,049 Schedule 1 Foreign Exchange Forward Contracts (in 000s except contract price and total number of contract(s)) Canadian Value Canadian Value Settlement Currency to be as at Currency to be as at Contract CAD Unrealized Date Delivered Received Price Appreciation July 03, USD $ 2 4 PLN $ $ 0 July 03, USD 30 6,342 HUF $ 32 $ 32 $ 0 Canadian Value Canadian Value Settlement Currency to be as at Currency to be as at Contract CAD Unrealized Date Delivered Received Price Depreciation July 03, ,119 PHP $ USD $ to $ 0 TOTAL NUMBER OF CONTRACT(S): 4 CAD NET UNREALIZED DEPRECIATION $ 0 7

9 ntd Emerging Markets Fund Fund-Specific Notes to the Interim Financial Report (Unaudited) (A) The Fund (I) The Fund start date was December 21, (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. Morgan Stanley Investment Management Inc. is the Sub-adviser of the Fund. (III) The presentation and functional currency of the Fund is the Canadian dollar. (IV) The investment objective of the Fund is to seek to achieve long-term capital growth by investing primarily in equity securities of issuers in emerging countries. In seeking to achieve this objective, the Fund generally invests at least 65 percent of the Fund s total assets in equity securities of issuers in emerging countries. However, in certain market conditions, the Fund may hold short-term securities. By investing primarily in growth-oriented equity securities in emerging markets, the investment approach combines top-down country allocation with bottom-up stock selection. The Fund may hold fixed income securities as an equity substitute when debt is the preferred way to access a market. (V) Private-EM Series was launched on February 4, (B) Management Fees and Administration Fees (Note 6) for the six-month periods ended and 2016 (I) MANAGEMENT FEES (%) Actual Annual Rate (exclusive of GST and HST) Series Maximum Investor Series Advisor Series F-Series Private-EM Series 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 amount payable (in 000s) to TDAM as at for management fees is $293 (December 31, 2016: $0) 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 The amount payable (in 000s) to TDAM as at for administration fees is $44 (December 31, 2016: $39) which is included in Accrued Liabilities on the Statements of Financial Position. (C) Brokerage Commissions and Soft Dollars (in 000s) (Notes 3 and 6) for the six-month periods ended and 2016 (I) BROKERAGE COMMISSIONS Total Brokerage Commissions $ 244 $ 168 Paid to Related Parties 0 0 (II) SOFT DOLLARS Soft Dollars $ 45 $ 28 Percentage of Total Commissions (%) (D) Tax Loss Carry Forwards (in 000s) (Note 7) as at December 31, 2016 None for the Fund. (E) Securities Lent (Note 3) (I) SECURITIES LENDING INCOME A reconciliation of the gross amount generated from the securities lending transactions to the security lending income to the Fund for the periods ended and 2016 is as follows: Percentage of Amount (in 000s) Total Amount (%) Gross Securities Lending Income $ 20 $ Agent fees The Bank of New York Mellon Corp. (4) (5) (20.0) (18.5) Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) Tax Reclaims (Withholding Taxes) 0 (2) 0.0 (7.4) Net Securities Lending Income $ 16 $ (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 December 31, June 30, December 31, Fair Value of Securities Lent $ 9,739 $ 9,159 Fair Value of Collateral Held 10,538 9,892 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. 8

10 TD Emerging Markets Fund Fund-Specific Notes to the Interim Financial Report (F) Financial Risk Management (Notes 3, 4 and 8) as at and December 31, 2016 (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 December 31, 2016 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) June 30, December 31, June 30, December 31, Currency Brazilian Real $ 13,238 $ 13,126 $ 662 $ 656 Chilean Peso 1,075 1, China Renminbi Colombian Peso 0 1, Czech Koruna 2,111 1, Egyptian Pound 1, Euro 4,799 4, Hong Kong Dollar 31,951 28,724 1,598 1,436 Hungarian Forint 2, Indian Rupee 16,848 13, Indonesian Rupiah 10,106 9, Japanese Yen Malaysian Ringgit 7, Mexican Peso 5,808 4, New Taiwan Dollar 15,565 15, New Turkish Lira Pakistan Rupee 2,087 2, Philippine Peso 5,428 6, Polish Zloty 7,261 5, South African Rand 6,884 9, South Korean Won 20,443 18,152 1, Swiss Franc 1,015 1, Thai Baht 4,045 3, United States Dollar 32,595 26,821 1,630 1,341 Total $ 191,965 $ 169,072 $ 9,598 $ 8,454 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 December 31, 2016, had the benchmark of the Fund increased or decreased by 5 percent, with all other variables held constant, the net assets of the Fund would have increased or decreased by approximately: Impact on Impact on Net Assets (in 000s) Net Assets (%) June 30, December 31, June 30, December 31, Benchmark MSCI Emerging Markets Index (Net Dividend, C$) $ 8,822 $ 7, 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 December 31, Level 1 Level 2 Level 3 Total Common Shares $ 187,702 $ 0 $ 0 $ 187,702 Forward Contracts $ 187,702 $ 0 $ 0 $ 187,702 As at the end of the period, equity positions with a fair value of $21,129 were transferred from Level 2 to Level 1 as a result of increased activity in the market for those securities. Level 1 Level 2 Level 3 Total December 31, 2016 Common Shares $ 139,622 $ 26,259 $ 0 $ 165,881 Forward Contracts Rights ,628 26, ,887 Forward Contracts $ 139,628 $ 26,259 $ 0 $ 165,887 As at the end of the period, equity positions with a fair value of $1,599 and $10,505 were transferred from Level 1 to 2 and Level 2 to 1 respectively as a result of changes in activities in the market for these securities. 9

11 TD Emerging Markets Fund Fund-Specific Notes to the Interim Financial Report (VI) RECONCILIATION OF LEVEL 3 FAIR VALUE MEASUREMENTS (in 000s) From January 1, 2017 to, the Fund did not hold financial instruments within Level 3 of fair value hierarchy. The table below reconciles the Fund s Level 3 fair value measurements from January 1, 2016 to December 31, Common Shares Balance at January 1, 2016 $ 682 Sales (261) Net Transfers In (Out) (252) Gains (Losses) Net Realized Gain (Loss) on Sale of Investments (72) Net Change in Unrealized Appreciation/ Depreciation of Investments (97) Balance at December 31, 2016 $ 0 Total Change in Unrealized Appreciation/Depreciation for Assets Held at December 31, 2016 $ 0 (VII) CONTRACTUAL MATURITIES ANALYSIS FOR FINANCIAL LIABILITIES As at and December 31, 2016, the Fund s net assets are due on demand. All other financial liabilities of the Fund are due in less than three months. (G) Investment Portfolio Concentration (%) (Note 8) As at and December 31, 2016, the Fund s investment portfolio concentration can be summarized as follows: June 30, December 31, U.S. Equities Consumer Discretionary International Equities Argentina Austria Brazil Chile China Colombia Czech Republic Egypt Germany Hong Kong Hungary India Indonesia Japan Malaysia Mexico Netherlands Pakistan Panama Peru Philippines Poland Portugal Russia South Africa South Korea Switzerland Taiwan Thailand Turkey Forward Contracts Other Net Assets (Liabilities) (H) Interest in Unconsolidated Structured Entities (in 000s) (Note 3) Not significant or applicable to the Fund. 10

12 TD Emerging Markets Fund Fund-Specific Notes to the Interim Financial Report (I) Offsetting of Financial Assets and Liabilities (in 000s) (Note 3) The following table presents the recognized financial instruments that are offset, or subject to enforceable master netting arrangements, if certain conditions arise, or other similar agreements but that are not offset, and cash and financial instruments collateral received or pledged, as at and December 31, 2016 and shows in the Net Amount column what the impact would be on the Fund s Statements of Financial Position if all set-off rights were exercised. Related Amounts Not Amounts Net Amounts Set-Off on the Statements Gross Amounts Set-Off on the Presented on of Financial Position of Recognized Statements the Statements Financial Assets of Financial of Financial Financial (Liabilities) Position Position Instruments Cash Net Amount Derivative Assets $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Derivative Liabilities December 31, 2016 Derivative Assets $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Derivative Liabilities (J) Significant Events On April 22, 2016, the Fund (the Continuing Fund ) merged with the TD Latin American Growth Fund (the Discontinued Fund ). Pursuant to this transaction, the Continuing Fund acquired all of the net assets of the Discontinued Fund at fair value in exchange for units in the equivalent series of the Continuing Fund. The value of the units issued in connection with this merger was equal to the market value of the net assets transferred from the Discontinued Fund as at April 22, This merger was effected on a tax-deferred basis. The Discontinued Fund was terminated and woundup after the merger was completed. The number of units issued and the fair value of assets acquired by the Continuing Fund as at April 22, 2016 were as follows: Fair Value of Net Assets Number of Units Acquired by Series Units of Series Units of Issued by the the Continuing Discontinued Fund Continuing Fund Continuing Fund Fund (in 000s) Investor Series Investor Series 2,982,146 $ 47,629 Advisor Series Advisor Series 110,635 2,232 F-Series F-Series 13, The financial statements of the Continuing Fund do not include the operating results of the Discontinued Fund prior to the merger date of April 22,

13 nnotes to the Interim Financial Report (Unaudited) 1. The Fund The TD Mutual Fund Trusts, TD Managed Assets Program Portfolios and TD Managed ETF 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 and TD Managed ETF Portfolios invest primarily in units of other 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 December 31, 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 Interim Fund-Specific Notes to the Financial Report 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. This financial report was authorized for issue by TDAM on August 15, Basis of Presentation This interim financial report has been prepared in compliance with International Financial Reporting Standards ( IFRS ) as published by the International Accounting Standards Board ( IASB ), applicable to the preparation of interim financial reports, including International Accounting Standards ( IAS ) 34, Interim Financial Reporting. This interim financial report has been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss ( FVTPL ). 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. 12

14 nnotes to the Interim Financial Report (Unaudited) 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 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 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 and TD Exchange- Traded 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. 13

15 nnotes to the Interim Financial Report (Unaudited) 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). 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. 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 Fund. 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 December 31, 2016 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 issuers 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 December 31, 2016, the fair value of mortgagerelated 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 Unrealized Appreciation/Depreciation on Statements of Comprehensive Income in Net Gain (Loss) on Investments. The classification of the Fund s financial instruments within the fair value hierarchy as at and December 31, 2016, 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. 14

16 nnotes to the Interim Financial Report (Unaudited) Translation of Foreign Currencies The 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. Assets and liabilities denominated in a foreign currency are translated into the functional currency using the exchange rate prevailing at the measurement date. Foreign exchange gains and losses on the sale of investments are included in Net Realized Gain (Loss) on Investments. Unrealized foreign exchange gains and losses on investments held are included in Net Change in Unrealized Appreciation/Depreciation on Investments. Realized and unrealized foreign exchange gains and losses relating to cash are presented as Foreign Exchange Gain (Loss) on Cash on the Statements of Comprehensive Income. Offsetting Financial Assets and Liabilities Financial assets and liabilities are offset and the net amount reported on the Statements of Financial Position where the Fund has a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. In all other situations they are presented on a gross basis. In the normal course of business, the Fund may enter into various master netting agreements or other similar arrangements that do not meet the criteria for offsetting on the Statements of Financial Position but still allow for the related amounts to be set-off in certain circumstances, such as bankruptcy or the termination of the contracts. Offsetting information, where applicable, is presented in the Fund- Specific Notes to the Financial Statements. Reverse Repurchase Agreements The Fund may enter into reverse repurchase transactions. In a reverse repurchase transaction, the Fund buys a security at one price from a third party and agrees to sell the same security back to the same party at a specified price on an agreed future date and the difference is included as Net Gain (Loss) on Investments on the Statements of Comprehensive Income. The risk with these types of transactions is that the other party may default under the agreement or go bankrupt. These risks are reduced by requiring the other party to provide collateral to the Fund. The value of the collateral has to be at least 102 percent of the market value of the security and the collateral is marked to market on each business day. The type of securities received and related collateral held by the Fund, where applicable, are listed in the Schedule of Investment Portfolio. Cash Cash is comprised of deposits with financial institutions. Bank overdrafts are shown under Current Liabilities on the Statements of Financial Position. Receivable for Investments Sold/Payable for Investments Purchased Receivable for Investments Sold and Payable for Investments Purchased represent trades that have been contracted for but not yet settled or delivered in the Statements of Financial Position dates. Impairment of Financial Assets At each reporting date, the Fund assesses whether there is objective evidence that a financial asset at amortized cost is impaired. If such evidence exists, the Fund recognizes an impairment loss as the difference between the amortized cost of the financial asset and the present value of the estimated future cash flows, discounted using the instrument s original effective interest rate. Impairment losses on financial assets at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. Valuation of Series Units TDAM generally calculates the NAV for each series of the Fund as at 4 p.m. Eastern Time on each day that the Toronto Stock Exchange is open for trading. However, in some unusual circumstances, the series NAV per unit may be calculated at another time where it is in the best interests of unitholders to do so. The NAV is calculated, for processing purchase, switch, conversion or redemption orders of series units, for each series of units of the Fund by taking the series proportionate share of the Fund s common assets less that series proportionate share of the Fund s common liabilities and deducting from this amount all liabilities that relate solely to that specific series. The Net Assets Attributable to Holders of Redeemable Units Per Series Unit is determined by dividing the total Net Assets Attributable to Holders of Redeemable Units of each series of the Fund by the total number of units outstanding of that series at the reporting date. Income Recognition Interest for Distribution Purposes as shown on the Statements of Comprehensive Income includes interest income from cash and the coupon interest on debt instruments accounted for on an accrual basis. Interest Receivable is disclosed on the Statements of Financial Position based on the debt instruments stated rates of interest. The Fund does not amortize premiums paid or discounts received on the purchase of debt securities except for zero coupon bonds which are amortized. Dividend income and distributions from any underlying funds and ETFs, are recognized on the ex-dividend and ex-distribution date respectively. Distributions received from ETFs are recognized and presented in the financial statements based on the nature of the underlying components such as interest income, dividend income, capital gains and return of capital. The TD Mutual Fund Trusts may engage in securities lending pursuant to the terms of an agreement which includes restrictions as set out in Canadian securities legislation. The income earned from securities lending, where applicable, is included in the Statements of Comprehensive Income as it is earned. The fair value of the securities loaned and fair value of the collateral held is determined daily. The details of security lending income, aggregate values of securities on loan and related collateral held by the Fund is provided in the Fund-Specific Notes to the Financial Statements, where applicable. 15