TD Asset Management. TD EXCHANGE-TRADED FUNDS Annual Financial Statements. TD Canadian Aggregate Bond Index ETF (03/18)

TD Asset Management TD Canadian Aggregate Bond Index ETF 535230 (03/18) TD EXCHANGE-TRADED FUNDS for the period ended December 31, 2017

Management s Responsibility for Financial Reporting The accompanying audited financial statements have been prepared by TD Asset Management Inc. ( TDAM ), as manager of the Funds. 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 financial statements and overseeing management s performance of its financial reporting responsibilities. On behalf of TDAM, manager of t he Funds Bruce Cooper David Lambie Director and Chief Executive Officer Director and Chief Financial Officer March 16, 2018 March 16, 2018 December 31, 2017 1

TD Canadian Aggregate Bond Index ETF INDEPENDENT AUDITOR S REPORT To the Unitholders and Trustee of: TD Canadian Aggregate Bond Index ETF (the Fund ) We have audited the accompanying financial statements of the Fund, which comprise the statements of financial position as at December 31, 2017 and 2016, and the statements of comprehensive income, changes in net assets attributable to holders of redeemable units and cash flows for the year ended December 31, 2017 and for the period from February 23, 2016 (inception date) to December 31, 2016, 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 the Fund in accordance with International Financial Reporting Standards, and for such internal control as management 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 the Fund based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures 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 accounting 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 our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of the Fund present fairly, in all material respects, the financial position of the Fund as at December 31, 2017 and 2016, and its financial performance and its cash flows for the year ended December 31, 2017 and for the period from February 23, 2016 to December 31, 2016 in accordance with International Financial Reporting Standards. Chartered Professional Accountants, Licensed Public Accountants Toronto, Ontario March 16, 2018 December 31, 2017 2

TD Canadian Aggregate Bond Index ETF STATEMENTS OF FINANCIAL POSITION (in 000s except per unit amounts) as at December 31, 2017 and 2016 STATEMENTS OF COMPREHENSIVE INCOME (in 000s except per unit amounts) for the period ended December 31, 2017 and for the period from February 23, 2016 (inception date) to December 31, 2016 December 31, December 31, 2017 2016 Assets Current Assets Investments $ 77,706 $ 35,948 Cash 275 62 Interest Receivable 306 152 78,287 36,162 Liabilities Current Liabilities Distributions Payable 186 98 186 98 Net Assets Attributable to Holders of Redeemable Units (Note 5) $ 78,101 $ 36,064 Net Assets Attributable to Holders of Redeemable Units Per Unit $ 14.60 $ 14.72 2017 2016 Income Securities Lending Income $ 7 $ 0 Net Gain (Loss) on Investments Interest for Distribution Purposes 1,592 393 Net Realized Gain (Loss) (383) (11) Net Change in Unrealized Appreciation/Depreciation (52) (966) Net Gain (Loss) on Investments 1,157 (584) Total Income (Net) 1,164 (584) Expenses (Note 6) Management Fees 62 15 Independent Review Committee Fees 2 1 Total Expenses before Waivers 64 16 Less: Waived Expenses (2) (1) Total Expenses (Net) 62 15 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units before Tax 1,102 (599) Tax Reclaims (Withholding Taxes) 0 0 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 1,102 $ (599) Weighted Average Units Outstanding for the Period 3,764 1,205 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units Per Unit $ 0.29 $ (0.50) The accompanying notes are an integral part of the financial statements. December 31, 2017 3

TD Canadian Aggregate Bond Index ETF STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (in 000s) for the period ended December 31, 2017 and for the period from February 23, 2016 (inception date) to December 31, 2016 STATEMENTS OF CASH FLOWS (in 000s) for the period ended December 31, 2017 and for the period from February 23, 2016 (inception date) to December 31, 2016 2017 2016 Net Assets Attributable to Holders of Redeemable Units at Beginning of the Period $ 36,064 $ N/A Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 1,102 (599) Distributions to Holders of Redeemable Units From Net Investment Income (1,454) (381) From Net Realized Gains on Investments 0 (14) Return of Capital (193) (79) (1,647) (474) Redeemable Unit Transactions Proceeds from Redeemable Units Issued 47,017 37,123 Reinvestments of Distributions to Holders of Redeemable Units 0 14 Redemption of Redeemable Units (4,435) 0 Net Increase (Decrease) from Redeemable Unit Transactions 42,582 37,137 Net Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 42,037 36,064 Net Assets Attributable to Holders of Redeemable Units at End of the Period $ 78,101 $ 36,064 Redeemable Unit Transactions Redeemable Units Outstanding, Beginning of the Period 2,450 N/A Redeemable Units Issued 3,200 2,450 Redeemable Units Issued on Reinvestments 0 1 Redeemable Units Consolidated* 0 (1) Redeemable Units Redeemed (300) 0 Redeemable Units Outstanding, End of the Period 5,350 2,450 * Redeemable units issued on reinvestments immediately consolidated with the units held prior to the distribution. 2017 2016 Cash Flows from (used in) Operating Activities Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units $ 1,102 $ (599) Adjustment For: Net Realized (Gain) Loss on Sale of Investments 383 11 Net Change in Unrealized Appreciation/ Depreciation of Investments 52 966 Purchase of Investments (17,520) (4,891) Proceeds from Sale and/or Maturity of Investments 17,785 4,745 (Increase) Decrease in Interest Receivable (154) (152) Net Cash from (used in) Operating Activities 1,648 80 Cash Flows from (used in) Financing Activities Distributions Paid to Holders of Redeemable Units, Net of Reinvested Distributions (1,559) (362) Proceeds from Issuances of Redeemable Units 207 344 Amounts Paid on Redemption of Redeemable Units (83) 0 Net Cash from (used in) Financing Activities (1,435) (18) Net Increase (Decrease) in Cash 213 62 Cash (Bank Overdraft) at Beginning of the Period 62 0 Cash (Bank Overdraft) at End of the Period $ 275 $ 62 Interest for Distribution Purposes Received*, Net of Withholding Taxes 1,438 241 * Included as part of Cash Flows from (used in) Operating Activities. Excludes in-kind subscriptions of $46,810 (2016: $36,779). Excludes in-kind redemptions of $4,352 (2016: $0). The accompanying notes are an integral part of the financial statements. December 31, 2017 4

TD Canadian Aggregate Bond Index ETF SCHEDULE OF INVESTMENT PORTFOLIO (in 000s except number of Shares or Units/Par Value) as at December 31, 2017 PAR VALUE DESCRIPTION COST FAIR VALUE PAR VALUE DESCRIPTION COST FAIR VALUE CANADIAN BONDS 97.8% FEDERAL BONDS & GUARANTEES 40.1% Canada Housing Trust No. 1 120,000 2.05% due June 15, 2018 $ 123 $ 120 1,598,000 4.10% due December 15, 2018 1,705 1,637 1,239,000 1.95% due June 15, 2019 1,263 1,244 1,699,000 2.00% due December 15, 2019 1,719 1,706 304,000 1.45% due June 15, 2020 302 301 482,000 3.80% due June 15, 2021 532 511 440,000 1.50% due December 15, 2021 440 431 500,000 1.75% due June 15, 2022 493 493 416,000 2.40% due December 15, 2022 433 421 275,000 3.15% due September 15, 2023 292 289 766,000 2.90% due June 15, 2024 832 795 938,000 2.35% due June 15, 2027 945 935 Government of Canada 668,000 1.25% due February 01, 2018 671 668 175,000 1.25% due March 01, 2018 175 175 914,000 0.25% due May 01, 2018 910 911 485,000 4.25% due June 01, 2018 508 491 509,000 0.50% due August 01, 2018 506 507 250,000 1.25% due September 01, 2018 252 250 1,385,000 0.50% due November 01, 2018 1,374 1,374 450,000 0.75% due May 01, 2019 450 445 565,000 3.75% due June 01, 2019 606 582 525,000 1.75% due September 01, 2019 537 526 634,000 1.50% due March 01, 2020 642 631 1,908,000 0.75% due September 01, 2020 1,911 1,860 200,000 0.75% due March 01, 2021 195 194 1,346,000 3.25% due June 01, 2021 1,473 1,411 280,000 0.75% due September 01, 2021 271 270 1,361,000 0.50% due March 01, 2022 1,294 1,289 1,241,000 2.75% due June 01, 2022 1,350 1,289 534,000 1.00% due September 01, 2022 520 513 195,000 1.75% due March 01, 2023 196 194 868,000 1.50% due June 01, 2023 879 850 993,000 2.50% due June 01, 2024 1,040 1,026 360,000 2.25% due June 01, 2025 380 366 1,070,000 1.50% due June 01, 2026 1,067 1,027 714,000 1.00% due June 01, 2027 662 651 423,000 5.75% due June 01, 2029 610 579 718,000 5.75% due June 01, 2033 1,070 1,054 171,000 5.00% due June 01, 2037 253 245 930,000 4.00% due June 01, 2041 1,317 1,220 349,000 3.50% due December 01, 2045 448 436 1,157,000 2.75% due December 01, 2048 1,275 1,281 60,000 2.75% due December 01, 2064 71 69 PSP Capital Inc. 30,000 3.03% due October 22, 2020 32 31 32,024 31,298 PROVINCIAL BONDS & GUARANTEES 35.0% Hydro One Inc. 106,000 3.20% due January 13, 2022 114 109 80,000 Callable 2.77% due February 24, 2026 81 80 234,000 6.93% due June 01, 2032 330 329 56,000 6.35% due January 31, 2034 77 76 20,000 Callable 3.72% due November 18, 2047 21 21 Hydro-Quebec 114,000 5.00% due February 15, 2050 157 163 Labrador-Island Link Funding Trust 50,000 3.76% due June 01, 2033 55 56 54,000 3.86% due December 01, 2045 $ 63 $ 63 40,000 3.85% due December 01, 2053 46 48 Muskrat Falls / Labrador Transmission Assets Funding Trust 25,000 3.63% due June 01, 2029 27 27 30,000 3.83% due June 01, 2037 35 34 30,000 3.86% due December 01, 2048 34 36 Province of Alberta 331,000 1.25% due June 01, 2020 329 326 75,000 1.35% due September 01, 2021 74 73 83,000 2.55% due December 15, 2022 86 84 274,000 2.35% due June 01, 2025 274 271 98,000 2.20% due June 01, 2026 95 95 30,000 2.55% due June 01, 2027 30 30 308,000 2.90% due September 20, 2029 317 311 139,000 3.45% due December 01, 2043 146 150 334,000 3.05% due December 01, 2048 323 338 Province of British Columbia 317,000 4.10% due December 18, 2019 342 331 100,000 3.25% due December 18, 2021 108 104 245,000 3.30% due December 18, 2023 267 258 221,000 2.30% due June 18, 2026 221 217 140,000 5.70% due June 18, 2029 186 182 35,000 6.35% due June 18, 2031 48 49 215,000 4.70% due June 18, 2037 269 275 10,000 3.20% due June 18, 2044 10 11 594,000 2.80% due June 18, 2048 581 586 Province of Manitoba 82,000 1.85% due September 05, 2018 83 82 94,000 4.15% due June 03, 2020 102 99 235,000 3.85% due December 01, 2021 253 250 292,000 2.45% due June 02, 2025 297 290 25,000 2.60% due June 02, 2027 25 25 133,000 4.65% due March 05, 2040 166 168 279,000 3.35% due March 05, 2043 288 293 102,000 2.85% due September 05, 2046 96 98 Province of New Brunswick 2,000 4.45% due March 26, 2018 2 2 124,000 3.35% due December 03, 2021 132 129 148,000 2.85% due June 02, 2023 155 151 40,000 5.65% due December 27, 2028 50 50 217,000 5.50% due January 27, 2034 283 286 40,000 4.80% due September 26, 2039 50 51 35,000 3.55% due June 03, 2043 35 38 45,000 3.80% due August 14, 2045 49 51 Province of Newfoundland and Labrador 181,000 2.30% due June 02, 2025 176 176 216,000 3.30% due October 17, 2046 210 219 Province of Nova Scotia 43,000 4.10% due June 01, 2021 47 46 92,000 2.10% due June 01, 2027 88 88 77,000 4.90% due June 01, 2035 98 98 90,000 4.50% due June 01, 2037 109 110 75,000 4.40% due June 01, 2042 88 93 25,000 3.50% due June 02, 2062 28 28 Province of Ontario 435,000 2.10% due September 08, 2018 438 437 330,000 4.40% due June 02, 2019 347 342 851,000 4.20% due June 02, 2020 932 897 300,000 4.00% due June 02, 2021 329 319 803,000 3.15% due June 02, 2022 860 835 530,000 2.85% due June 02, 2023 548 545 December 31, 2017 5

TD Canadian Aggregate Bond Index ETF SCHEDULE OF INVESTMENT PORTFOLIO (in 000s except number of Shares or Units/Par Value) as at December 31, 2017 PAR VALUE DESCRIPTION COST FAIR VALUE PAR VALUE DESCRIPTION COST FAIR VALUE 774,000 3.50% due June 02, 2024 $ 844 $ 824 1,073,000 2.60% due June 02, 2025 1,096 1,080 240,000 2.40% due June 02, 2026 241 237 427,000 2.60% due June 02, 2027 433 427 187,000 6.50% due March 08, 2029 258 255 199,000 5.85% due March 08, 2033 270 273 145,000 5.60% due June 02, 2035 199 199 717,000 4.70% due June 02, 2037 890 909 221,000 4.60% due June 02, 2039 279 280 941,000 4.65% due June 02, 2041 1,231 1,213 386,000 3.50% due June 02, 2043 401 424 1,175,000 3.45% due June 02, 2045 1,258 1,285 407,000 2.90% due December 02, 2046 390 403 180,000 2.80% due June 02, 2048 173 175 Province of Quebec 952,000 4.50% due December 01, 2019 1,030 1,000 491,000 4.50% due December 01, 2020 539 526 358,000 4.25% due December 01, 2021 404 387 516,000 3.50% due December 01, 2022 557 546 441,000 2.75% due September 01, 2025 463 449 527,000 2.50% due September 01, 2026 526 525 265,000 2.75% due September 01, 2027 266 269 523,000 6.25% due June 01, 2032 749 736 453,000 5.00% due December 01, 2038 592 602 801,000 4.25% due December 01, 2043 966 992 1,545,000 3.50% due December 01, 2048 1,697 1,728 Province of Saskatchewan 100,000 3.20% due June 03, 2024 108 105 20,000 5.75% due March 05, 2029 27 26 158,000 4.75% due June 01, 2040 193 203 239,000 2.75% due December 02, 2046 221 227 27,411 27,334 MUNICIPAL BONDS 1.5% City of Montreal 40,000 5.45% due December 01, 2019 44 43 176,000 3.50% due September 01, 2023 191 185 30,000 4.25% due December 01, 2032 34 34 15,000 6.00% due June 01, 2043 21 22 City of Ottawa 78,000 4.60% due July 14, 2042 95 97 City of Toronto 98,000 5.20% due June 01, 2040 130 130 Municipal Finance Authority of British Columbia 304,000 5.10% due November 20, 2018 324 313 110,000 2.50% due April 19, 2026 109 109 Regional Municipality of Peel 109,000 5.10% due June 29, 2040 137 143 Regional Municipality of York 60,000 4.00% due June 30, 2021 65 64 32,000 2.60% due December 15, 2025 32 32 17,000 4.05% due May 01, 2034 18 19 1,200 1,191 CORPORATE BONDS 21.2% 407 International Inc. 187,000 Callable 4.30% due May 26, 2021 204 199 55,000 Callable 2.43% due May 04, 2027 55 54 158,000 Callable 4.45% due November 15, 2041 179 182 10,000 Callable 3.98% due September 11, 2052 11 11 Aeroports de Montreal 95,000 3.919% due September 26, 2042 104 107 Alectra Inc. 50,000 Callable 2.488% due May 17, 2027 $ 51 $ 49 Alimentation Couche-Tard Inc. 198,000 3.319% due November 01, 2019 207 202 65,000 Callable 3.60% due June 02, 2025 67 66 AltaGas Ltd. 82,000 Callable 4.50% due August 15, 2044 80 81 AltaLink L.P. 90,000 4.462% due November 08, 2041 101 104 83,000 3.99% due June 30, 2042 91 90 Bank of Montreal 176,000 2.84% due June 04, 2020 182 179 416,000 3.40% due April 23, 2021 441 429 116,000 2.12% due March 16, 2022 115 114 85,000 Callable 6.17% due March 28, 2023 90 86 110,000 4.609% due September 10, 2025 127 124 104,000 Callable 3.34% due December 08, 2025 107 106 35,000 Callable 3.32% due June 01, 2026 36 36 36,000 Callable 2.57% due June 01, 2027 36 35 The Bank of Nova Scotia 349,000 2.40% due October 28, 2019 357 351 324,000 2.13% due June 15, 2020 329 323 65,000 1.83% due April 27, 2022 65 63 116,000 2.29% due June 28, 2024 114 113 336,000 Callable 3.036% due October 18, 2024 343 340 30,000 Callable 3.367% due December 08, 2025 30 31 75,000 2.62% due December 02, 2026 74 74 121,000 Callable 2.58% due March 30, 2027 119 119 Bell Canada Inc. 252,000 3.35% due June 18, 2019 259 256 20,000 2.00% due October 01, 2021 20 20 105,000 Callable 3.00% due October 03, 2022 109 106 25,000 Callable 2.90% due August 12, 2026 24 24 163,000 Callable 4.75% due September 29, 2044 172 176 BMW Canada Inc. 20,000 2.33% due September 26, 2018 20 20 British Columbia Ferry Services Inc. 62,000 5.021% due March 20, 2037 77 76 Brookfield Asset Management Inc. 122,000 5.30% due March 01, 2021 132 132 70,000 Callable 4.82% due January 28, 2026 78 76 10,000 5.95% due June 14, 2035 12 12 Brookfield Renewable Partners ULC 197,000 5.14% due October 13, 2020 216 211 Bruce Power L.P. 143,000 Callable 3.969% due June 23, 2026 150 150 Canadian Credit Card Trust II 144,000 1.829% due March 24, 2022 144 143 Canadian Imperial Bank of Commerce 357,000 1.85% due July 14, 2020 359 354 20,000 2.04% due March 21, 2022 20 20 75,000 2.30% due July 11, 2022 75 74 122,000 Callable 3.00% due October 28, 2024 123 123 143,000 Callable 3.42% due January 26, 2026 147 146 Canadian National Railway Company 30,000 Callable 3.60% due August 01, 2047 30 31 Canadian Natural Resources Limited 84,000 Callable 3.55% due June 03, 2024 87 86 Canadian Pacific Railway Company 38,000 6.45% due November 17, 2039 51 53 December 31, 2017 6

TD Canadian Aggregate Bond Index ETF SCHEDULE OF INVESTMENT PORTFOLIO (in 000s except number of Shares or Units/Par Value) as at December 31, 2017 PAR VALUE DESCRIPTION COST FAIR VALUE Capital Desjardins Inc. 20,000 5.187% due May 05, 2020 $ 22 $ 21 Choice Properties Real Estate Investment Trust 179,000 3.554% due July 05, 2018 183 181 CU Inc. 73,000 4.543% due October 24, 2041 83 85 56,000 Callable 4.085% due September 02, 2044 62 62 Daimler Canada Finance Inc. 110,000 1.42% due October 02, 2018 110 110 30,000 1.91% due July 08, 2021 29 29 Enbridge Gas Distribution Inc. 77,000 4.04% due November 23, 2020 85 81 20,000 Callable 2.50% due August 05, 2026 20 20 66,000 Callable 4.00% due August 22, 2044 70 72 Enbridge Inc. 164,000 4.53% due March 09, 2020 172 171 67,000 Callable 4.57% due March 11, 2044 68 68 Enbridge Income Fund 15,000 Callable 3.95% due November 19, 2024 16 15 Enbridge Pipelines Inc. 10,000 Callable 3.94% due June 30, 2023 11 10 87,000 Callable 4.55% due August 17, 2043 92 95 EPCOR Utilities Inc. 28,000 4.55% due February 28, 2042 33 33 Fairfax Financial Holdings Limited 50,000 Callable 4.70% due December 16, 2026 52 52 Federation des caisses Desjardins du Quebec 102,000 2.795% due November 19, 2018 104 103 192,000 2.443% due July 17, 2019 194 193 70,000 2.091% due January 17, 2022 71 69 50,000 2.394% due August 25, 2022 50 50 First Capital Realty Inc. 16,000 3.90% due October 30, 2023 17 17 149,000 4.323% due July 31, 2025 160 156 Ford Credit Canada Company 90,000 3.279% due July 02, 2021 92 91 55,000 2.766% due June 22, 2022 55 54 FortisBC Energy Inc. 10,000 5.80% due May 13, 2038 13 13 GE Capital Canada Funding Company 50,000 4.60% due January 26, 2022 57 54 General Motors Financial of Canada Ltd. 57,000 3.08% due May 22, 2020 58 58 10,000 2.60% due June 01, 2022 10 10 Glacier Credit Card Trust 74,000 2.568% due September 20, 2019 76 74 Greater Toronto Airports Authority 26,000 Callable 3.04% due September 21, 2022 27 27 73,000 6.45% due December 03, 2027 99 96 128,000 5.63% due June 07, 2040 174 179 Great-West Lifeco Inc. 70,000 4.65% due August 13, 2020 77 74 48,000 6.67% due March 21, 2033 63 65 Health Montreal Collective L.P. 30,000 6.721% due September 30, 2049 39 41 Honda Canada Finance Inc. 50,000 1.823% due December 07, 2021 50 49 25,000 2.537% due March 01, 2023 25 25 PAR VALUE DESCRIPTION COST FAIR VALUE HSBC Bank Canada 186,000 2.078% due November 26, 2018 $ 188 $ 186 50,000 2.908% due September 29, 2021 52 51 65,000 2.17% due June 29, 2022 64 64 Intact Financial Corporation 58,000 5.16% due June 16, 2042 67 69 Inter Pipeline Ltd. 96,000 Callable 4.637% due May 30, 2044 99 101 John Deere Canada Funding Inc. 20,000 2.30% due January 17, 2018 20 20 Laurentian Bank of Canada 196,000 2.75% due April 22, 2021 197 195 Loblaw Companies Limited 140,000 Callable 4.86% due September 12, 2023 159 153 15,000 5.90% due January 18, 2036 18 18 Lower Mattagami Energy Limited Partnership 46,000 5.139% due May 18, 2041 59 58 The Manufacturers Life Insurance Company 228,000 Callable 2.389% due January 05, 2026 229 227 44,000 Callable 3.181% due November 22, 2027 45 45 Manulife Financial Corporation 189,000 5.505% due June 26, 2018 201 192 METRO Inc. 52,000 Callable 3.20% due December 01, 2021 54 53 45,000 5.97% due October 15, 2035 54 55 National Bank of Canada 311,000 2.794% due August 09, 2018 315 313 50,000 1.809% due July 26, 2021 50 49 22,000 2.105% due March 18, 2022 22 22 NAV Canada 30,000 1.949% due April 19, 2018 30 30 15,000 7.40% due June 01, 2027 21 21 Nissan Canada Financial Services Inc. 70,000 1.75% due April 09, 2020 69 69 North West Redwater Partnership/ NWR Financing Company Ltd. 117,000 Callable 2.80% due June 01, 2027 116 113 12,000 Callable 3.65% due June 01, 2035 12 12 151,000 Callable 3.70% due February 23, 2043 148 149 5,000 Callable 4.05% due July 22, 2044 5 5 Nova Scotia Power Inc. 11,000 5.61% due June 15, 2040 15 14 10,000 Callable 4.50% due July 20, 2043 11 11 Ontario Power Generation 12,000 Callable 3.315% due October 04, 2027 12 12 Pembina Pipeline Corporation 62,000 Callable 3.54% due February 03, 2025 62 62 105,000 Callable 4.81% due March 25, 2044 106 108 RioCan Real Estate Investment Trust 30,000 3.287% due February 12, 2024 30 30 Rogers Communications Inc. 55,000 2.80% due March 13, 2019 56 55 60,000 4.70% due September 29, 2020 66 64 25,000 4.00% due June 06, 2022 27 26 181,000 Callable 4.00% due March 13, 2024 197 192 40,000 Callable 6.56% due March 22, 2041 52 53 Royal Bank of Canada 20,000 3.77% due March 30, 2018 21 20 110,000 2.82% due July 12, 2018 113 111 110,000 2.77% due December 11, 2018 112 111 December 31, 2017 7

TD Canadian Aggregate Bond Index ETF SCHEDULE OF INVESTMENT PORTFOLIO (in 000s except number of Shares or Units/Par Value) as at December 31, 2017 PAR VALUE DESCRIPTION COST FAIR VALUE 232,000 1.59% due March 23, 2020 $ 232 $ 229 424,000 2.86% due March 04, 2021 439 430 132,000 1.583% due September 13, 2021 130 128 164,000 1.968% due March 02, 2022 164 161 86,000 2.333% due December 05, 2023 86 85 87,000 Callable 3.04% due July 17, 2024 88 88 70,000 Callable 2.99% due December 06, 2024 71 71 35,000 Callable 3.45% due September 29, 2026 36 36 Shaw Communications Inc. 185,000 5.65% due October 01, 2019 201 196 52,000 6.75% due November 09, 2039 65 67 Sun Life Financial Inc. 89,000 Callable 5.40% due May 29, 2042 104 107 Suncor Energy Inc. 29,000 Callable 3.10% due November 26, 2021 29 30 200,000 Callable 3.00% due September 14, 2026 199 197 TELUS Corporation 20,000 5.05% due December 04, 2019 22 21 20,000 Callable 3.20% due April 05, 2021 21 20 60,000 Callable 2.35% due March 28, 2022 60 59 260,000 Callable 3.35% due April 01, 2024 267 265 119,000 Callable 4.85% due April 05, 2044 128 127 Teranet Holdings L.P. 179,000 4.807% due December 16, 2020 195 187 40,000 5.754% due December 17, 2040 44 43 Toronto Hydro Corporation 157,000 4.49% due November 12, 2019 169 164 The Toronto-Dominion Bank* 188,000 2.447% due April 02, 2019 193 189 161,000 2.045% due March 08, 2021 163 160 45,000 1.68% due June 08, 2021 45 44 122,000 2.621% due December 22, 2021 124 123 143,000 3.226% due July 24, 2024 153 148 89,000 Callable 2.692% due June 24, 2025 91 89 50,000 Callable 3.224% due July 25, 2029 50 50 39,000 Callable 4.859% due March 04, 2031 43 43 Toyota Credit Canada Inc. 58,000 2.75% due July 18, 2018 59 58 76,000 1.75% due July 21, 2021 75 74 66,000 2.02% due February 28, 2022 66 65 TransCanada PipeLines Limited 30,000 Callable 3.69% due July 19, 2023 32 32 336,000 Callable 3.30% due July 17, 2025 351 346 10,000 4.55% due November 15, 2041 11 11 Union Gas Limited 25,000 Callable 3.79% due July 10, 2023 27 27 51,000 6.05% due September 02, 2038 69 70 15,000 Callable 3.59% due November 22, 2047 15 15 Ventas Canada Finance Limited 30,000 Callable 4.125% due September 30, 2024 32 31 VW Credit Canada Inc. 168,000 2.15% due June 24, 2020 167 167 Wells Fargo Canada Corporation 199,000 2.944% due July 25, 2019 207 202 30,000 3.04% due January 29, 2021 32 31 Westcoast Energy Inc. 152,000 5.60% due January 16, 2019 164 157 16,732 16,542 Total Canadian Bonds 77,367 76,365 PAR VALUE DESCRIPTION COST FAIR VALUE GLOBAL BONDS 1.7% GERMANY 0.0% KFW 30,000 5.05% due February 04, 2025 $ 37 $ 35 UNITED KINGDOM 0.2% Heathrow Funding Ltd. 111,000 3.25% due May 21, 2027 113 112 HSBC Holdings PLC 50,000 3.196% due December 05, 2023 51 51 164 163 UNITED STATES 1.4% Anheuser-Busch InBev Finance Inc. 70,000 Callable 2.60% due May 15, 2024 71 69 13,000 Callable 4.32% due May 15, 2047 13 14 Apple Inc. 167,000 Callable 2.513% due August 19, 2024 167 165 AT&T Inc. 30,000 3.825% due November 25, 2020 32 31 45,000 Callable 4.85% due May 25, 2047 45 45 Bank of America Corporation 60,000 3.228% due June 22, 2022 62 61 Citigroup Inc. 156,000 4.09% due June 09, 2025 162 161 The Goldman Sachs Group Inc. 20,000 3.375% due February 01, 2018 20 20 55,000 5.00% due May 03, 2018 56 56 30,000 Callable 2.433% due April 26, 2023 29 29 Molson Coors International L.P. 101,000 Callable 2.84% due July 15, 2023 101 100 Morgan Stanley 153,000 3.00% due February 07, 2024 153 152 The Walt Disney Company 50,000 2.758% due October 07, 2024 51 50 Wells Fargo & Company 137,000 2.975% due May 19, 2026 136 133 1,098 1,086 SUPRANATIONALS 0.1% Asian Development Bank 30,000 4.65% due February 16, 2027 35 35 Inter-American Development Bank 20,000 4.40% due January 26, 2026 24 22 59 57 Total Global Bonds 1,358 1,341 TOTAL INVESTMENT PORTFOLIO 99.5% $ 78,725 $ 77,706 OTHER NET ASSETS (LIABILITIES) 0.5% 395 TOTAL NET ASSETS 100.0% $ 78,101 * Related party to the Fund as an affiliated entity of TD Asset Management Inc. December 31, 2017 8

TD Canadian Aggregate Bond Index ETF FUND-SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (A) THE FUND (I) The Fund was incepted on February 23, 2016 and its start date was on March 22, 2016. The units of the Fund were available for purchase on the Toronto Stock Exchange ( TSX ) effective March 30, 2016. The TSX ticker symbol for the Fund is TDB. (II) TDAM is the trustee, manager, portfolio adviser and promoter 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 track, to the extent reasonably possible and before the deduction of fees and expenses, the performance of a Canadian aggregate bond index that measures the investment return of Canadian dollardenominated investment grade publicly issued debt, including securities issued by governments and corporate issuers. In seeking to achieve this objective, the Fund currently invests in and holds a proportionate share of securities included in the S&P Canada Aggregate Bond Index. The Fund may also invest in other investment funds, exchange-traded funds, or derivatives, to obtain exposure to such securities. (V) Any related party holdings as at December 31, 2017 (December 31, 2016: 2.3%), are disclosed in the Schedule of Investment Portfolio. (VI) The mid price as at December 31, 2017 was $14.60. (B) MANAGEMENT FEES (%) (Note 6) for the periods ended December 31, 2017 and 2016 Annual Rate (exclusive of GST and HST) Management Fee Waived Fund Year per Prospectus Management Fee Management Fee TDB 2017 0.10 0.00 0.10 2016 0.10 0.00 0.10 The management fee reported represents the annualized fee from the start date to the period ended December 31, 2016. The amount payable (in 000s) to TDAM as at December 31, 2017 for management fees is $0 (December 31, 2016: $0), which is included in Accrued Liabilities on the Statements of Financial Position. (C) BROKERAGE COMMISSIONS AND SOFT DOLLARS (in 000s) for the periods ended December 31, 2017 and 2016 (Notes 3 and 6) Not significant or applicable to the Fund. (D) TAX LOSS CARRY FORWARDS (in 000s) (Note 7) as at December 31, 2017 Capital Losses $ 267 Non-Capital Losses (by year of expiry) None (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 is as follows for the periods ended December 31, 2017 and 2016: Amount Percentage of (in 000s) Total Amount (%) 2017 2016 2017 2016 Gross Securities Lending Income $ 9 $ 0 100.0 0.0 Agent fees The Bank of New York Mellon Corp. (2) 0 (22.2) 0.0 Securities Lending Income to the Fund before Tax Reclaims (Withholding Taxes) 7 0 77.8 0.0 Tax Reclaims (Withholding Taxes) 0 0 0.0 0.0 Net Securities Lending Income $ 7 $ 0 77.8 0.0 (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 December 31, 2017 and 2016. December 31, December 31, 2017 2016 Fair Value of Securities Lent $ 17,405 $ 0 Fair Value of Collateral Held 18,294 0 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. (F) FINANCIAL RISK MANAGEMENT (Notes 3, 4 and 8) as at December 31, 2017 and 2016 (I) Interest Rate Risk The table below summarizes the Fund s direct exposure to interest rate risk as at December 31, 2017 and 2016 by remaining term to maturity. The table also illustrates the potential impact to the Fund s net assets had the prevailing interest rates changed by 1 percent, assuming a parallel shift in the yield curve, with all other variables held constant. The Fund s sensitivity to interest rate changes was estimated using the weighted average duration of the bond portfolio. In practice, the actual trading results may differ from these approximate sensitivity analysis amounts and the differences could be material. Total Exposure Term to Maturity (000s) December 31, December 31, Bonds 2017 2016 Less than 1 year $ 8,498 $ 4,133 1 5 years 28,515 12,539 5 10 years 18,212 8,819 > 10 years 22,481 10,457 Total $ 77,706 $ 35,948 Impact on Net Assets (000s) $ 5,506 $ 2,481 Impact on Net Assets (%) 7.1 6.9 (II) Currency Risk Not significant or applicable to the Fund. (III) Other Price Risk Not significant or applicable to the Fund. (IV) Credit Risk The table below summarizes the debt instruments by credit ratings as at December 31, 2017 and 2016. Percentage of Percentage of Total Bonds (%) Total Net Assets (%) Credit December 31, December 31, December 31, December 31, Rating* 2017 2016 2017 2016 AAA 44.7 44.7 44.5 44.6 AA 31.8 26.9 31.6 26.8 A 15.4 20.5 15.3 20.4 BBB 8.1 7.9 8.1 7.9 Total 100.0 100.0 99.5 99.7 * Credit ratings are obtained from Standard & Poor s, Moody s or DBRS rating agencies. December 31, 2017 9

TD Canadian Aggregate Bond Index ETF FUND-SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (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 December 31, 2017 and 2016. December 31, 2017 Level 1 Level 2 Level 3 Total Bonds $ 0 $ 77,706 $ 0 $ 77,706 December 31, 2016 Bonds $ 0 $ 35,948 $ 0 $ 35,948 As at the end of the periods, transfers between Level 1 and Level 2 were nil. (VI) Reconciliation of Level 3 Fair Value Measurements (in 000s) Not significant or applicable to the Fund. (VII) Contractual Maturities Analysis for Financial Liabilities As at December 31, 2017 and 2016, the Fund s net assets are due on demand. All other financial liabilities of the Fund are due in less than three months. (G) INVESTMENT PORTFOLIO CONCENTRATION (%) (Note 8) As at December 31, 2017 and 2016, the Fund s investment portfolio concentration can be summarized as follows: December 31, December 31, 2017 2016 Canadian Bonds Federal Bonds & Guarantees 40.1 40.2 Provincial Bonds & Guarantees 35.0 35.2 Municipal Bonds 1.5 1.4 Corporate Bonds 21.2 22.0 Global Bonds Germany 0.0 0.1 United Kingdom 0.2 0.0 United States 1.4 0.7 Supranationals 0.1 0.1 Other Net Assets (Liabilities) 0.5 0.3 100.0 100.0 (H) INTEREST IN UNCONSOLIDATED STRUCTURED ENTITIES (in 000s) (Note 3) as at December 31, 2017 and 2016 Not significant or applicable to the Fund. (I) OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES (in 000s) (Note 3) as at December 31, 2017 and 2016 Not significant or applicable to the Fund. December 31, 2017 10

TD Canadian Aggregate Bond Index ETF The S&P Canada Aggregate Bond Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates ( SPDJI ), and has been licensed for use by TD Asset Management Inc. ( TDAM ). Standard & Poor s, S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC, a division of S&P Global ( S&P ); Dow Jones, Dow Jones Industrial Average and DJIA are registered trademarks of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by TDAM. The TD Canadian Aggregate Bond Index ETF is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in the TD Canadian Aggregate Bond Index ETF nor do they have any liability for any errors, omissions, or interruptions of the S&P Canada Aggregate Bond Index. December 31, 2017 11

NOTES TO THE FINANCIAL STATEMENTS 1. THE FUND The TD Exchange-Traded Funds (collectively, the Funds and individually, the Fund ) are open-end mutual funds established as trusts under the laws of the Province of Ontario and governed by the Declaration of Trust, as amended from time to time. The Funds are authorized to issue an unlimited number of redeemable, transferrable units of an unlimited number of classes of units, each of which represents an equal, undivided interest in the net assets of the Funds. The Funds currently offers one class of units denominated in Canadian dollars. Units of the Funds are listed on the Toronto Stock Exchange ( TSX ). TD Asset Management Inc. ( TDAM ) is the trustee, manager, portfolio adviser and promoter of the Funds. TDAM has entered into an agreement with TD Securities Inc. ( TDS ) to act as a designated broker and dealer to perform certain duties for the Funds. TDAM, TDS and TD Waterhouse Canada Inc. ( TDW ) 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 of the Funds is December 31. The Statements of Financial Position are presented as at December 31, 2017 and 2016. The Statements of Comprehensive Income, Changes in Net Assets Attributable to Holders of Redeemable Units and Cash Flows are presented for the periods ended December 31, 2017 and 2016. Where a Fund was established during either reporting period, the information for such Fund is provided from the inception date, except Weighted Average Units Outstanding for the Period, which is calculated from the start date. The Funds start date as indicated in the Fund-Specific Notes to the Financial Statements is the date that the Funds commenced operations and not the inception date. These financial statements were authorized for issue by TDAM on March 16, 2018. 2. BASIS OF PRESENTATION These financial statements have been prepared in compliance with International Financial Reporting Standards ( IFRS ) as published by the International Accounting Standards Board ( IASB ). These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss ( FVTPL ). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Instruments The Funds recognize financial instruments at fair value upon initial recognition, plus transaction costs in the case of financial instruments not measured at FVTPL. Regular way purchases and sales of financial instruments are recognized at their trade date. The Funds nonderivative investments, which are designated at FVTPL, and derivative assets and liabilities, which are classified as held for trading ( HFT ), are measured at FVTPL. All other financial assets and liabilities are measured at amortized cost. Under this method, financial assets and liabilities reflect the amount required to be received or paid, discounted, when appropriate, at the contract s effective interest rate. The Funds have determined that they meet the definition of an investment entity and as a result, they measure subsidiaries, if any, at FVTPL. An investment entity is an entity that: obtains funds from one or more investors for the purpose of providing them with investment management services; commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and measures and evaluates the performance of substantially all of its investments on a fair value basis. The significant judgment that the Funds have made in determining that they meet this definition is that fair value is the primary measurement attribute used to measure and evaluate the performance of substantially all of the Funds investments. The Funds investments may also include associates and joint ventures which are designated at FVTPL. The Funds outstanding redeemable units may be redeemed for cash at a redemption discount to the closing price on the TSX. Such reduced redemption price causes cash flows on redemption not to be substantially based on net asset value ( NAV ). Consequently, the outstanding redeemable units of the Funds are classified as financial liabilities in accordance with the requirements of IAS 32, Financial Instruments: Presentation. The Funds accounting policies for measuring the fair value of their investments and derivatives are substantially similar to those used in measuring their NAVs 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 date, in accordance with Part 14 of National Instrument 81-106, Investment Fund Continuous Disclosure, for the purpose of processing unitholder transactions. Net Assets Attributable to Holders of Redeemable Units, also referred to as net assets, refers to net assets calculated in accordance with IFRS. As at all dates presented, there were no differences between the Funds NAV per unit and net assets per unit. December 31, 2017 12

NOTES TO THE FINANCIAL STATEMENTS The NAV per unit of a Fund is computed by dividing the NAV of the Fund by the total number of units of the Fund outstanding at such time on each valuation date. 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 values 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 dates. The Funds use the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, TDAM determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. The Funds policy is to recognize transfers into and out of the fair value hierarchy levels at the end of the reporting periods. The fair values of financial assets and liabilities that are not traded in an active market, including over-the-counter derivatives, are determined using valuation techniques. The Funds use 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 attempt to make the maximum use of observable inputs. The valuation methodology for specific types of investments held by the Funds is summarized below. (a) Securities not listed on any recognized public securities exchange are valued based on available quotations from recognized dealers in such securities, where readily available. If securities have no available broker-dealer bid/ask quotes, TDAM uses its own pricing model to price the securities. The pricing model will generally include the discounted cash flow valuation approach, the use of a credit spread based on the terms of the security and the use of such credit and yield analysis comparables as TDAM believes are relevant in the circumstances. Debt instruments are valued based on mid prices, where readily available. Other valuation techniques may be used, as described above, where applicable. (b) Short-term debt instruments are valued based on quotations received from recognized investment dealers. (c) Investments in underlying conventional mutual funds and TD Exchange-Traded Funds are generally valued at the NAV per series unit or NAV per class unit of the investment funds as reported by the investment funds managers. (d) The Funds may use foreign exchange forward contracts to hedge against or profit from fluctuations in foreign exchange rates. These contracts are valued on each valuation day based on the difference between the contract rates and the current forward rates at the measurement date applied to the contracts notional amount. The net change in unrealized appreciation or depreciation and the net realized gain or loss from closing out contracts are reflected in the Statement of Comprehensive Income as part of Net Gain (Loss) on Derivatives. Fair Value Hierarchy The Funds classify their investments into fair value measurements within a hierarchy that prioritizes the inputs to fair value measurement. The fair value hierarchy has the following three levels: Level 1 Quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2 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 Level 3 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, Bank Overdrafts, Payable for Investments Purchased, Redemptions Payable, Distributions Payable and Accrued Liabilities 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, an instrument is 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. December 31, 2017 13

NOTES TO THE FINANCIAL STATEMENTS Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. The determination of what constitutes observable requires significant judgment. Observable data is considered to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. TDAM has a Global Fair Value Committee which oversees the performance of the fair value measurements included in the financial statements of the Funds, including any Level 3 measurements. TDAM utilizes a variety of methods (as listed in the Fair Value Measurement section) in determining the fair value of securities classified as Level 3. The committee also meets quarterly to perform reviews of the valuations of investments held by the Funds. The classification of the Funds financial instruments within the fair value hierarchy as at December 31, 2017 and 2016, and any transfers between levels at the end of the reporting periods as a result of changes in the lowest level input that is significant to the fair value measurement are disclosed in the Fund-Specific Notes to the Financial Statements, where applicable. Interest in Unconsolidated Structured Entities A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. TDAM has determined that all of the underlying funds in which the Funds invest are unconsolidated structured entities. In making this determination, TDAM evaluated the fact that decision making about underlying funds activities is generally not governed by voting or similar rights held by the Funds and other investors in any underlying funds. The Funds may invest in underlying funds whose investment objectives range from seeking to achieve short- to long-term income and capital growth potential. The Funds interests in these securities as at December 31, 2017 and 2016 are included at their fair value in the Statements of Financial Position, which represents the Funds exposure in these underlying funds. The Funds do not provide and have not committed to provide any additional significant financial or other support to the underlying funds. Realized gain or loss and the change in fair value of each of the underlying funds during the reporting periods are included in Net Gain (Loss) on Investments in the Statements of Comprehensive Income. Additional information on the Funds interests in underlying funds, where applicable, is provided in the Schedule of Investment Portfolio and Fund-Specific Notes to the Financial Statements. The Funds may also invest in mortgage-related and/or 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 Funds may 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 December 31, 2017 and 2016, the fair values of mortgage-related and other asset-backed securities of the Funds, where applicable, are disclosed as part of Investments in the Statements of Financial Position. These amounts represent the maximum exposure to losses at those dates. The change in fair value of mortgage-related and other asset-backed securities during the reporting periods are included in the Net Change in Unrealized Appreciation/Depreciation in the Statements of Comprehensive Income in Net Gain (Loss) on Investments. Translation of Foreign Currencies A Fund s functional currency, as disclosed in the Fund-Specific Notes to the Financial Statements, represents the currency that TDAM views to most faithfully represent the economic effects of the Fund s underlying transactions, events and conditions taking into consideration how units are issued or redeemed and how returns are measured. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates that transactions occur. Realized foreign exchange gains and losses on income are recognized in investment income in the Statements of Comprehensive Income. 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). Unrealized foreign exchange gains and losses on investments held and other assets and liabilities are included in Net Change in Unrealized Appreciation/Depreciation. Realized and unrealized foreign exchange gains and losses relating to cash are presented as Foreign Exchange Gain (Loss) on Cash in the Statements of Comprehensive Income. December 31, 2017 14