TD Asset Management Inc. announces changes to its investment fund line-up
TORONTO, July 18, 2019 /CNW/ - TD Asset Management Inc. ("TDAM"), the manager of TD Mutual Funds and TD Managed Assets Program portfolios, today announced changes to certain investment funds. The changes include fund mergers, investment objectives and risk rating updates and other changes as described below.
Certain changes, as outlined below, are subject to regulatory and/or unitholder approvals at special meetings of unitholders (each, a "Meeting" and collectively, the "Meetings"), of each applicable fund, to be held concurrently, with separate votes for each fund, on September 27, 2019.
In advance of the Meetings, a notice-and-access document will be mailed on August 23, 2019 to unitholders of record as at July 29, 2019. The notice-and-access document will describe the various ways in which unitholders can obtain a copy of a management information circular that contains full details of the proposed changes. The notice-and-access document and management information circular will also be available on SEDAR at www.sedar.com.
Fund Mergers
Subject to obtaining all necessary regulatory and unitholder approvals, TDAM proposes that each mutual fund (individually a "Discontinuing Fund" and collectively, the "Discontinuing Funds") be merged into the corresponding mutual fund (individually a "Continuing Fund" and collectively, the "Continuing Funds") as set out in the table below. If approved, the mergers will be effective on or about October 25, 2019 (the "Effective Date").
Discontinuing Fund | Continuing Fund |
TD Balanced Income Fund | TD Diversified Monthly Income Fund |
TD Advantage Balanced Income Portfolio | TD Managed Income Portfolio |
TD Advantage Balanced Portfolio | TD Managed Income & Moderate Growth Portfolio |
The merger of each Discontinuing Fund into the applicable Continuing Fund will be effected on a tax-deferred basis for unitholders. If the proposed mergers are approved, unitholders of each series of each Discontinuing Fund will receive units of the equivalent series of the Continuing Fund, determined on a dollar-for-dollar basis. Each Discontinuing Fund will be wound up as soon as reasonably possible following its merger.
Subject to obtaining regulatory and unitholder approval for the merger of TD Balanced Income Fund into TD Diversified Monthly Income Fund, TDAM intends to reduce the management fee charged on each series of TD Diversified Monthly Income Fund.
The Independent Review Committee of each of the Discontinuing Funds has reviewed the potential conflict of interest matters related to the proposed mergers and has provided TDAM with a positive recommendation for the mergers after determining that each merger, if implemented, would achieve a fair and reasonable result for each Discontinuing Fund.
TDAM will not charge unitholders any redemption fees, sales charges or other fees for any transactions involving units of the Discontinuing Funds redeemed and/or purchased on or prior to July 18, 2019. Units of a Discontinuing Fund purchased after July 18, 2019 (and, accordingly, units of the Continuing Fund received by an investor in exchange for such units of the Discontinuing Fund) will be subject to the usual redemption fees if they were purchased under the back-end load option or either of the low-load options and the redemption fee schedule will be based on the date of purchase of units of the Discontinuing Fund.
All costs and expenses associated with the proposed mergers will be borne by TDAM.
Changes to Investment Objectives
Subject to obtaining unitholder approval, certain funds will change their investment objectives as indicated below.
Fund | Current Investment Objectives | Proposed Investment Objectives |
TD Asian Growth Fund | The fundamental investment objective is to seek to achieve long-term capital growth by investing primarily in equity securities of issuers in Asia and Australasia, excluding Japan. | The fundamental investment objective is to seek to earn dividend income and to generate long term capital appreciation by investing primarily in equity securities of issuers located in China. |
TD Canadian Bond Index Fund | The fundamental investment objective is to maximize total return through both interest income and capital appreciation by tracking the performance of the FTSE Canada Universe Bond Index (the "Universe Index"). The Universe Index is comprised of Canadian investment-grade bonds which mature in more than one year. | The fundamental investment objective is to maximize total return through both interest income and capital appreciation by tracking the performance of a Canadian aggregate bond index that measures the investment return of the Canadian investment grade bond market. |
TD Canadian Index Fund | The fundamental investment objective is to provide long-term growth of capital primarily by purchasing Canadian equity securities to track the performance of the S&P/TSX Composite Total Return Index ("S&P/TSX Composite Index"). The S&P/TSX Composite Index is comprised of Canadian issuers traded on the Toronto Stock Exchange. | The fundamental investment objective is to provide long-term growth of capital by tracking the performance of a broad Canadian equity market index that measures the investment return of publicly traded securities in the Canadian market. |
TD U.S. Index Fund | The fundamental investment objective is to provide long-term growth of capital by primarily purchasing U.S. equity securities to track the performance of the S&P 500 Total Return Index ("S&P 500 Index"). The S&P 500 Index is comprised of 500 widely-held U.S. issuers. | The fundamental investment objective is to provide long-term growth of capital by tracking the performance of a broad U.S. equity market index that measures the investment return of large capitalization U.S. stocks. |
TD International Index Fund | The fundamental investment objective is to track the MSCI EAFE Index. The MSCI EAFE Index is a broadly diversified index consisting of equity securities of companies domiciled in developed markets outside the U.S. and Canada. | The fundamental investment objective is to provide long-term growth of capital by tracking the performance of an international equity markets index that measures the investment return of mid-and large-capitalization issuers in the European, Asian and Far East regions. |
Subject to obtaining unitholder approval for the investment objective changes, TDAM intends to reduce the management fee charged on each series of the above noted funds.
The Independent Review Committee of each of the funds listed in the table above has reviewed the potential conflict of interest matters related to the proposed investment objective changes and has provided TDAM with a positive recommendation for the proposed investment objective changes after determining that the changes, if implemented, would achieve a fair and reasonable result for each of the funds.
Declaration of Trust Amendment
Pursuant to the existing amendment provision, TD Canadian Bond Fund unitholders must approve material changes to the declaration of trust. Given the expense and time-consuming nature of obtaining unitholder approval, this limits the ability of TD Canadian Bond Fund to benefit from revisions to the declaration of trust that TDAM, as trustee of TD Canadian Bond Fund, may otherwise be permitted to make in accordance with securities regulations – revisions which may be beneficial to its unitholders and if not permitted to be made, may put TD Canadian Bond Fund and/or its unitholders at a competitive disadvantage. Accordingly, TDAM proposes to adopt the same amendment provisions applicable to other TD Mutual Funds, which would allow TDAM to make material changes to TD Canadian Bond Fund's declaration of trust without seeking unitholder approval to do so. Should material changes occur, unitholders would be notified of such changes at least 21 days' prior to such changes taking effect.
Risk Rating Changes
The following funds will be lowering their risk ratings as indicated below. These changes will be reflected in the TD Mutual Funds' Simplified Prospectus and Fund Facts that will be filed on or about July 25, 2019.
Fund | Previous Risk Rating | New Risk Rating |
TD High Yield Bond Fund | Medium | Low to Medium |
TD Canadian Low Volatility | Medium | Low to Medium |
TD Canadian Low Volatility | Medium | Low to Medium |
TD Canadian Equity Fund | Medium to High | Medium |
TD Canadian Equity Class | Medium to High | Medium |
TD Resource Fund | High | Medium to High |
TD Retirement Balanced | Low to Medium | Low |
The risk rating changes are based on the methodology mandated by the Canadian Securities Administrators (the "CSA") and the related annual review by TDAM to determine the risk level of publicly-offered investment funds. There are no changes to the investment objectives, strategies or management of the funds.
A summary of the CSA's risk classification methodology and each of the funds' investment objectives and strategies can be found in the TD Mutual Funds Simplified Prospectus, available at tdassetmanagement.com or on SEDAR at www.sedar.com.
TD Strategic Yield Fund Name Change
Effective on or about November 1, 2019, TDAM will change the name of TD Strategic Yield Fund to TD Global Tactical Monthly Income Fund to better reflect how the fund is managed. There will be no change to the fund's investment objectives or strategies.
Fund Capping
Effective on or about November 1, 2019, the following TD Mutual Funds and TD Managed Assets Program portfolios will no longer accept additional purchases, including purchases made through Pre‑Authorized Purchase Plans and Pre-Authorized Contribution Plans.
- TD FundSmart Managed Aggressive Growth Portfolio
- TD FundSmart Managed Income & Moderate Growth Portfolio
- TD FundSmart Managed Balanced Growth Portfolio
- TD Advantage Balanced Growth Portfolio
Deferred Sales Charge Purchase Options
In addition, effective on or about November 1, 2019, the back-end load, low-load and low‑load‑2 purchase options of Advisor Series, T5 Series and T8 Series securities of the TD Mutual Funds and TD Managed Assets Program portfolios will be closed to all purchases by investors, including purchases made through Pre-Authorized Contribution Plans.
TD Asset Management Inc.
TD Asset Management (TDAM), a member of TD Bank Group, is a North American investment management firm. Operating through TD Asset Management Inc. in Canada and TDAM USA Inc. in the U.S., TDAM brings new thinking to investors' most important challenges. TDAM offers investment solutions to corporations, pension funds, endowments, foundations and individual investors. Additionally, TDAM manages assets on behalf of almost 2 million retail investors and offers a broadly diversified suite of investment solutions including mutual funds, professionally managed portfolios and corporate class funds. Asset management businesses at TD manage $391 billion in assets as at June 30, 2019. Assets under management include TD Asset Management Inc., TDAM USA Inc., Epoch Investment Partners Inc. (Epoch) and TD Greystone Asset Management.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts and prospectus, which contain detailed investment information, before investing. Mutual funds are not guaranteed or insured, their values change frequently and past performance may not be repeated.
TD Mutual Funds and the TD Managed Assets Program portfolios are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers.
The TD Canadian Bond Index Fund (the "Fund") has been developed solely by TD Asset Management Inc. ("TDAM"). The Fund is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). FTSE Russell is a trading name of certain of the LSE Group companies.
All rights in the FTSE Canada Universe Bond Index (the "Index") vest in the relevant LSE Group company which owns the Index. "FTSE®" is a trade mark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Funds. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Funds or the suitability of the Index for the purpose to which it is being put by TDAM.
The S&P/TSX Composite Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global or its affiliates ("SPDJI") and TSX Inc., and has been licensed for use by The Toronto‑Dominion Bank ("TD Bank"). 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"); TSX is a trademark of TSX Inc.; and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by TD Bank. The TD Canadian Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, or TSX Inc. and none of such parties make any representation regarding the advisability of investing in the TD Canadian Index Fund nor do they have any liability for any errors, omissions, or interruptions of the S&P/TSX Composite Index.
The S&P 500 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 The Toronto‑Dominion Bank ("TD Bank"). 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 TD Bank. The TD U.S. Index Fund 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 U.S. Index Fund nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.
The fund is not sponsored, endorsed, or promoted by MSCI Inc. or its affiliates ("MSCI"), and MSCI bears no liability with respect to the fund or any index on which the fund is based. The fund's simplified prospectus contains a more detailed description of the limited relationship MSCI has with TD Bank and any related funds.
SOURCE TD Asset Management Inc.
Andrea Foley, Corporate & Public Affairs, TD Bank Group, [email protected]
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