Fund Quarterly Commentary TD Emerald Global Equity Shareholder Yield Pooled Fund Trust

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1 Fund Quarterly Commentary TD Emerald Global Equity Shareholder Yield Pooled Fund Trust June 30, 2018 Fund Strategy The Fund seeks to achieve high level of income, generally investing in a diversified portfolio of global companies with a history of attractive dividend yield and positive growth in free cash flow. The Fund seeks to invest in stocks of companies that have management teams committed to using the companies free cash flow to increase shareholder value. While cash can be used in a number of ways to add value, the Fund focuses on dividends, debt reduction, and stock repurchases. The Fund is comprised of securities from around the world with at least 40% invested in foreign securities and the remainder invested in U.S. companies. The Fund invests in securities of various market capitalizations and industries to provide additional diversification potential. Fund Facts Date of Inception December 11, 2007 Assets under Management $1.13 billion Open for Investment Daily Performance Summary 3 Months YTD 1 Year 3 Years 5 years 10 years Since Inception Fund 2.16% 0.18% 4.04% 7.72% 12.06% 8.88% 6.63% Index % 5.44% 12.52% 10.38% 14.79% 9.57% 6.93% Difference -1.64% -5.26% -8.48% -2.66% -2.74% -0.70% -0.30% As of June 30, Returns for periods over one year are annualized. Note: Effective August 1, 2013, TD Asset Management engaged Epoch Investment Partners, Inc. to provide investment advisory services for the Fund. Returns are net of expense; returns for periods over one year are annualized; numbers may not add due to rounding. Performance data for TDAM s pooled fund trusts (PFTs) that is provided for a period of less than 12 consecutive months may not be representative of the fund s long-term performance. 1 Benchmark History MSCI World High Dividend Yield Index ND (C$) from December 11, 2007 to July 31, 2013 MSCI World Index ND (C$) from August 1, 2013 to present Source: TDAM, MSCI; Inception Date: December 11, 2007 Market Overview Stocks had gains amid higher volatility, helped by supportive economic data and strong corporate results. This was particularly true in the U.S., where tax expenses declined for many companies even as pre-tax income grew, leading to the strong quarterly results. Trade tensions undermined some of the positive sentiment, however. After months of rhetoric, the U.S. and China unveiled plans for additional tariffs worth billions of dollars. The U.S. dollar strengthened against other major currencies. Emerging markets equities declined sharply in U.S.-dollar terms. The best returns came from the Energy, Consumer Discretionary and Information Technology sectors. Energy sector companies benefited from oil prices continuing their year-long march higher. Despite a strong U.S. dollar, Brent crude ended the quarter near US$80 per barrel amid signs of falling supply as uncertainties around the output from Iran and Venezuela mounted. Returns for the Consumer Discretionary sector were supported by sharp gains for e-commerce stocks along with a rebound among more traditional companies that had recently underperformed. Stocks in the Information Technology sector continued to have strong gains despite calls for greater regulation and the U.S. administration s plans to limit Chinese investment in U.S. technology companies. Dispersion across sectors was wide, with Telecommunication Services, Consumer Staples, Industrials and Financials having the lowest returns. Investment Sub-Adviser Epoch Investment Partners, Inc. Auditor PricewaterhouseCoopers LLP

2 Stocks in the U.S. faced higher bond yields; the first-quarter s upward shift in the 10-year Treasury yield was largely sustained in the second quarter. The 10-year note closed above 3% for first time since 2014, although it slipped to 2.86% by the end of the period. On the short end, the U.S. Federal Reserve Board (Fed) raised interest rates and projected four increases for 2018 rather than three. The potential for an inverted yield curve (where shorter-term interest rates are higher than longer-term interest rates) gave some investors pause, with the spread between two- and 10-year notes narrowing to 33 basis points. Economic data remained positive, although investors worried that a tight labour market and firming inflation could lead to more aggressive interest rate increases by the Fed. The economic expansion in the eurozone slowed from 2017 s strong pace, with little agreement on whether this was to the result of temporary or structural factors. The main headlines, however, were political. The coalition government in Germany appeared increasingly fragile, the path to the U.K. s exit from the European Union remained unclear and new governments came to power in Spain and Italy. Italian debt sold off sharply as the country s two large anti-establishment parties formed a coalition, raising concerns of a fresh eurozone crisis. The European Central Bank (ECB) laid out plans to wind down its bond-buying program by December, but gave assurances that interest rates would remain low at least through the summer of While ECB officials provided an upbeat assessment of the eurozone economy, the Bank of England put interest rate increases on hold owing to weaker-than-expected economic data. In the Pacific region, Japanese stocks had strong returns in local currency, but were largely flat in Australian dollars. The Japanese economy contracted in the most recent quarter, ending an eight-quarter streak of expansion. While the dip in activity was seen as temporary, observers noted a return to growth could be tempered by trade frictions. Businesses lifted wages in Japan by an average of 2.4%, the largest in two decades. Australian stocks, after lagging in the previous year, were up sharply, helped by stocks in the Financials and Energy sectors, and in the commodity industry. Portfolio Review The portfolio had positive results, supported by holdings in the Energy, Utilities, Health Care, Real Estate and Information Technology sectors. Companies within the diversified portfolio continued to grow free cash flow and remained committed to consistently returning cash to shareholders through a combination of cash dividends, share buybacks and debt reduction. There were no dividend cancellations or reductions among the portfolio holdings. In relative terms, the portfolio s return lagged that of the benchmark. This was largely owing to what the portfolio did not own; namely, FANG, the acronym coined by CNBC s Jim Cramer for Facebook, Inc.; Amazon.com Inc.; Netflix, Inc.; and Alphabet Inc. s Google. These companies stocks rose 24%, 20%, 35% and 11%, respectively, and three out of four are among the benchmark s top-10 constituents. Notably, none of these four stocks has ever paid a dividend. So, while their potential for growth may be appealing for strategies that seek to capture price movements, they cannot be included in a strategy where the history of stable returns is based on capturing sustainable and growing shareholder yield; primarily dividends, along with share repurchases and debt reduction. A sector-level analysis would attribute this to an underweight position and negative stock selection within Information Technology and Consumer Discretionary. On another relative measure, the portfolio s dividend yield was nearly 80% higher than that of the benchmark at the end of the period. More importantly, we believe the cash dividends being captured in the portfolio (along with share buybacks and debt reductions) are sustainable and have room to grow. Other influences on returns included a larger-than-index weight in the Energy sector, which was a benefit, and a larger-than-index weight in the Telecommunication Services sector, which was a detractor from performance. Top individual contributors included Energy sector companies Occidental Petroleum Corp., Royal Dutch Shell PLC and Total SA. All three benefited from the rise in energy prices. We expect that Occidental Petroleum s long-term growth will continue to be driven by improving operating efficiency, growing high-margin production with lower capital intensity and leveraging technology for valuebased development. The company remains committed to returning cash to shareholders via an attractive dividend. Royal Dutch Shell s asset divestiture program progressed well ahead of schedule, which allowed the company to pay down debt and initiate a share buyback program. Management remains focused on reshaping the company after the significant acquisition of BG Group PLC, increasing its market dominance in deep-water and liquefied natural gas, and enhancing free-cash-flow generation to return to shareholders. Its scale, balance sheet, integrated business model, capital flexibility and cost-cutting initiatives give us confidence in the sustainability of the company s dividend. Total s management remains focused on growing its production organically. Its global scale, strong balance sheet, integrated business model, capital flexibility and cost improvements allow the company to pay a sustainable dividend through commodity price cycles. TD Emerald Global Equity Shareholder Yield Pooled Fund Trust Q

3 Welltower Inc., a diversified health care real estate investment trust, also helped results. Its shares traded higher after it reported first-quarter results, with the market reacting positively to the disclosure of the pending acquisition of Quality Care Properties, LLC, which is expected to improve Welltower s growth outlook. In addition, Welltower s shares have been supported by recent steps to improve portfolio quality and general market reaction to heightened global trade risks. The long-term fundamental demand for health care facilities and related services as well as the ability to drive growth (albeit modest) in rental revenues, net operating income and available funds from operations is anticipated to support a sustainable and growing dividend. Tobacco stocks influenced portfolio returns. Imperial Brands PLC was a contributor, benefiting from market share momentum, progress in its vapour business and the decision to divest non-strategic assets over the next two years. Management remains committed to returning cash to shareholders through an attractive and growing dividend. Debt reduction will also be a priority for cash over the next few years. The portfolio s other tobacco holdings declined. Philip Morris International Inc. is the manufacturer of the largest international brand: Marlboro. The company s shares came under pressure when management tempered expectations about the pace of growth in its next-generation product and expressed some caution about the pricing environment in Russia and ongoing volume challenges in the Gulf States. The company remains confident in its ability to drive high-single-digit earnings growth for the year. British American Tobacco PLC and Altria Group, Inc. continued to be negatively impacted by last quarter s U.S. Food and Drug Administration s comments on reducing nicotine levels, which we think is unlikely in the near term. The portfolio has significantly benefited from the stable growth of tobacco companies over the years, although the stocks are susceptible to occasional bouts of volatility caused by headlines on potential regulatory changes. As a group, these companies have pricing power, cost discipline and growing cash flows. They consistently return cash to shareholders via dividends and share repurchases. Other individual detractors from performance included Deutsche Post AG and Daimler AG. Deutsche Post is one of the world s largest package delivery companies. Management announced a restructuring program for its Post - ecommerce - Parcel division, as it had underinvested for the growth of its parcel segment. The near-term investment is anticipated to enable the company to take advantage of what continues to be a strong underlying market driven by large volume trends and pricing power. The company pays an attractive, growing dividend along with a share repurchase program. Shares of automaker Daimler were pressured by tariff announcements, higherthan-expected European emission testing and costs for a software upgrade on some diesel vehicles. Overall, sales remain steady and its product lineup and refresh are supportive of consistent results. Daimler returns cash to shareholders through an attractive dividend. Several stocks were added to the portfolio during the period, including Macquarie Group Ltd., a broadly diversified global financial services firm. Its diverse portfolio of businesses supports stable growth in operating income. Macquarie Group continues to expand assets under management, finance infrastructure transactions globally and expand lending activities in line with global gross domestic product, which is expected to be reflected in an attractive, growing dividend. Special dividends and share repurchases are used to return excess capital. Outlook In the U.S., the labour market is tight, domestic demand is solid and the production side of the economy has picked up markedly. We believe this provides a robust backdrop for earnings growth potential in the coming quarters, with the Tax Cuts and Jobs Act providing a short-term boost to growth. Wage and price inflation is increasing, but by less than in a typical cycle, likely owing to technology. In Europe, growth is slowing but is unlikely to collapse. We expect Europe to continue underperforming, as it grows earnings per share and cash flows less quickly than the U.S. (partially reflecting a lower weighting in the Information Technology sector). The eurozone s reform agenda has also stalled, undermining medium-term growth prospects. On the other hand, the outlook for Japan has improved and Japanese equities appear relatively cheap. Our main concern is the glacial pace at which Japanese companies have improved their thinking in terms of shareholder yield and capital allocation. Also supporting equities is the adoption of new technologies, which appears positive for all three returnon-equity components: profit margins, asset utilization and leverage. Among other things, this may imply corporate margins can remain high for a prolonged period. It may also suggest companies can return a higher proportion of cash to shareholders. Offsetting these supportive elements is the shift to higher interest rates among central banks in North America and Europe. With this in mind, we do not expect equities to benefit from expanding valuation multiples. Along with TD Emerald Global Equity Shareholder Yield Pooled Fund Trust Q

4 quantitative tightening, there is a risk that soaring U.S. budget deficits and a wave of corporate bonds maturing could not only engender more volatility and wider credit spreads, but it could also push interest rates higher. Each of these outcomes could be a challenge for high-duration strategies (i.e., strategies with greater sensitivity to interest rate changes). Finally, we expect trade tensions to remain a market theme and a source of volatility for years to come. While the risk of an outright trade war causing a recession is increasing, we think this outcome is unlikely. We maintain a positive outlook on global equity markets, underpinned by economic growth and the adoption of new technologies. There are several risks to be mindful of, however, including the likelihood of greater volatility, wider credit spreads and potentially higher interest rates. We believe our investment approach is well suited to this environment, where investment returns are more closely linked to company fundamentals. As always, we seek companies that can generate a growing stream of free cash flow and can allocate that cash effectively for the benefit of shareholders. Top contributors and top detractors April 1, 2018 to June 30, 2018 Top 5 Quarterly Contributors Top 5 Quarterly Detractors Holding Contribution to portfolio relative Holding Contribution to portfolio relative Occidental Petroleum Corporation Deutsche Post AG Welltower, Inc Daimler AG Equinor ASA Philip Morris International Inc Nutrien Ltd Orkla ASA Pembina Pipeline Corporation Compagnie Generale des Etablissements Michelin SCA Source: FactSet TD Emerald Global Equity Shareholder Yield Pooled Fund Trust Q

5 Performance by GICS Sector April 1, 2018 to June 30, 2018 Returns (%) Average Weights (%) Contributions (%) GICS Sectors Fund Index 1 Fund Index 1 Stock Selection Sector Allocation Currency Effect Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Telecom Services Utilities Total MSCI World Index ND (C$) Source: FactSet, MSCI Inc. All returns and contributions are in Canadian dollars. Numbers may not add due to rounding. Performance by Country April 1, 2018 to June 30, 2018 Returns (%) Average Weights (%) Contributions (%) Region/Country Fund Index 1 Fund Index 1 Stock Selection Country Allocation Currency Effect Canada Developed Europe Ex UK Developed Pac. Ex Japan Emerging Markets Japan United Kingdom United States Total MSCI World Index ND (C$) Source: FactSet, MSCI Inc. All returns and contributions are in Canadian dollars. Numbers may not add due to rounding. TD Emerald Global Equity Shareholder Yield Pooled Fund Trust Q

6 About Epoch Investment Partners, Inc. Epoch Investment Partners, Inc. (Epoch) was founded in April 2004 by experienced investment professionals. Epoch is a global asset management firm providing investment management services to investment companies, pension and profit-sharing plans, foundations, endowments, and other institutional clients. Helping you achieve your most important objectives TDAM is one of Canada s largest investment management firms. TDAM offers a full suite of investment management solutions for corporations, pension funds, endowments, foundations and high net worth individuals. Contact us to find out how TDAM can help you achieve your most important financial objectives. Telephone: Facsimile: inst.info@tdam.com Web: tdaminstitutional.com Source: Epoch, MSCI Inc., FactSet The information contained herein has been provided by TD Asset Management Inc. and is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual s objectives and risk tolerance. All products contain risk. Important information about the pooled fund trusts is contained in their offering circular, which we encourage you to read before investing. Please obtain a copy. The indicated rates of return are the historical annual compounded total returns of the funds including changes in unit value and reinvestment of all distributions. Yields, investment returns and unit values will fluctuate for all funds. All performance data represent past returns and are not necessarily indicative of future performance. Pooled Fund units are not deposits as defined by the Canada Deposit Insurance Corporation or any other government deposit insurer and are not guaranteed by The Toronto-Dominion Bank. Mutual fund strategies and current holdings are subject to change. TD Funds are managed by TD Asset Management Inc. Index returns are shown for comparative purposes only. Indexes are unmanaged and their returns do not include any sales charges or fees as such costs would lower performance. It is not possible to invest directly in an index. Certain statements in this document may contain forward-looking statements (FLS) that are predictive in nature and may include words such as expects, anticipates, intends, believes, estimates and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest and foreign exchange rates, equity and capital markets, the general business environment, assuming no changes to tax or other laws or government regulation or catastrophic events. Expectations and projections about future events are inherently subject to risks and uncertainties, which may be unforeseeable. Such expectations and projections may be incorrect in the future. FLS are not guarantees of future performance. Actual events could differ materially from those expressed or implied in any FLS. A number of important factors including those factors set out above can contribute to these digressions. You should avoid placing any reliance on FLS. Epoch Investment Partners, Inc. is a wholly-owned subsidiary of The Toronto-Dominion Bank and an affiliate of TD Asset Management, Inc. TD Asset Management Inc. is a wholly-owned subsidiary of The Toronto-Dominion Bank. All trademarks are the property of their respective owners. The TD logo and other trade-marks are the property of The Toronto-Dominion Bank. (0718) TD Emerald Global Equity Shareholder Yield Pooled Fund Trust Q