An Overview of TD Mutual Funds

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Lisa MacColl is a writer, investor and former compliance consultant in the group retirement and individual wealth management fields. Lisa has written about personal finance for 14 years and currently writes about investing and investment providers for Wealthsimple. Lisa's past work has been published in Canadian Money Saver, Advisor’s Edge, CBC, and She was a nominee for the 2015 Oktoberfest Women of the Year, Professional Category. Lisa holds an M.A. and B.A. from the Wilfrid Laurier University.

This guide is all about Toronto Dominion’s mutual funds, but it’s necessarily incomplete. Sixty mutual funds is a lot to keep track of! For complete and up-to-date information on what TD Mutual offers, visit the company’s website.

About Toronto Dominion (TD) mutual funds

The Toronto-Dominion Bank (TD) is a Canadian multinational financial services corporation headquartered in Toronto. TD offers more than 60 mutual funds, managed by TD Asset Management Inc., ranging from money market funds to sector specific funds. The funds vary in terms of risk based on their investment goals and underlying portfolio composition.

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How do TD mutual funds work?

TD mutual funds (the same as any mutual fund) are a pooled investment product. Many investors buy small slices of the mutual fund. TD mutual funds are bought and sold on the stock exchange, and the value can fluctuate. The fund manager, in this case TD, uses the pooled money from the many investors to build a portfolio by buying underlying stocks, bonds, and other investable assets.

Mutual fund portfolios (like TDs) are generally built based on investment goals and objectives, and earnings can include dividends, interest, and capital gains. Some mutual funds are comprised of investments that track/replicate a stock index. Some mutual funds may include derivatives, futures, hedge funds and other high=-risk investments. That’s why it’s important to read the prospectus and fund facts before you invest in a mutual fund.

Mutual funds can be“actively managed”, which means the portfolio manager buys and sells underlying stocks, bonds and other investment products often in order to achieve the goals of the fund. Mutual funds can also be “passively managed,” which means the portfolio manager follows an index and seeks to replicate its returns. Passive funds often have “index” in the name of the fund. The main difference between actively and passively managed funds lies in the manager’s investment philosophy. Actively managed funds buy and sell underlying stocks to meet investment goals, whereas a manager of a passively managed funds buys the underlying stocks in the same proportion as the index it is following. Whether actively or passively managed, there are fees, charges and commissions associated with mutual funds that may reduce your investment returns and can vary, although index funds are typically less expensive. It’s wise to read the fund facts before you buy mutual funds. TD offers both active and passive funds.

All mutual funds, including the funds offered by TD, fall into a few general categories: money market, bond/income, balanced, equity, global and “other,” including sector-specific and emerging markets. They have different levels of risk, and different fees associated with them. In general, the higher the risk, the more potential for wide variations in the unit price and profit/loss. The mutual fund advisor should take the time to walk through some investment questions so you can have a portfolio you are comfortable with.

TD offers more than 60 mutual funds, including money market, bond, balanced, equity and global funds. Here’s an overview of some popular TD mutual funds. The chart below includes an example of both actively and passively managed funds, and the different categories of mutual fund. The data was compiled on June 19, 2020, by consulting the TD fund pages. As mutual funds can fluctuate, the information may have changed. Please consult the fund pages for current information.

SymbolMutual fund name3-year return5-year returnMERAssets under management
TDB164TD Canadian Money Market Fund1%0.70%0.66%$1.4 billion
TD3081TD Canadian Bond Fund3.55%n/a0.88%$11.5 billion
TDB965TD Balanced Index3.44%3.64%0.89%$77.9 million
TDB161TD Canadian Equity Fund0.57%2.17%2.17%$3.5 billion
TDB223TD Global Entertainment and Communications Fund16.69%17.64%2.82%$882 million

1. TD Canadian Money Market Fund

AUM $1.7 billion | MER .66%| 3 YR Return 1% | 5 YR Return.7%

The TD Canadian Money Market Fund invests in Canadian denomination high-quality money market securities to provide a high rate of interest income, while keeping liquidity and preserving capital. It is considered average risk for investors. It requires a minimum deposit of $100, and is RRSP eligible. Benchmarks: 50% FTSE Canada 30 Day T-Bill Index; 50% FTSE Canada 60 Day T-Bill Index

2. TD Canadian Bond Fund

AUM 11.5 billion | MER .88% | 3 YR Return 3.55% | 5 YR Return n/a The TD Canadian Bond Fund has been around since October 2015. According to TD, “the fundamental investment objective is to earn a high rate of interest income through investments in high-quality bonds and debentures issued principally by Canadian borrowers in Canadian dollars. These securities may consist of debt obligations of, or guaranteed by, Canadian federal, provincial or municipal governments, Canadian chartered banks, Canadian loan or trust companies or Canadian corporations.” It requires a minimum initial investment of $100 and is RRSP eligible.

3. TD Balanced Index

AUM $77.9 million | MER 0.89%| 3 YR Return 3.44%| 5 YR Return 3.64%

Balanced funds combine income instruments and equities to preserve capital while achieving long-term growth. It typically includes a portfolio of equities, bonds and short-term instruments, but may also include some U.S. and global securities. The TD Balanced Index seeks to replicate the performance of the FTSE Canada Universe Bond Index. It requires a minimum initial investment of $100 and is RRSP eligible.

4. TD Canadian Equity Fund

AUM $3.5 billion | MER 2.17%| 3 YR Return 0.57%| 5 YR Return 2.17%

Equity funds try to achieve long-term capital appreciation by investing in high quality equity securities that offer growth potential. The TD Canadian Equity Fund’s top holdings include banks, insurance companies, transportation companies, and energy companies. It also includes 9% U.S. equities. It requires a minimum initial investment of $100 and is RRSP eligible.

5. TD Global Entertainment and Communications Fund

AUM $882 million | MER 2.82%| 3 YR Return 16.69%| 5 YR Return 17.64%

The TD Global Entertainment and Communications Fund is both a sector-specific and a global fund. Morningstar declared it one of the top three mutual funds of the decade. It invests primarily in U.S. media and telecommunications stocks, including the FAANG stocks (Facebook, Amazon, Apple, Netflix and Google (now Alphabet), and heavy hitters like T-Mobil and PayPal. It has a minimum initial investment of $100 and is RRSP eligible.

Examples of TD mutual funds that pay dividends

TD also has dividend-paying mutual funds that are less risky than an equity or global fund, but may produce better returns than a money market or a bond fund. For some funds, investors can automatically reinvest the dividends to purchase more units. The data was compiled on June 19, 2020 by consulting the TD fund pages. As mutual funds can fluctuate, the information may have changed. Please consult the fund pages for current information.

1. TD Dividend Growth Fund (TDB972)

AUM: $6414 million | MER: 2.02%| 3 Yr Return -1.52%| 5 Yr Return 1.69%

Dividend funds combine the benefits of tax-preferred capital gains with income-producing interest and dividend-paying underlying stocks. The TD Dividend Growth Fund’s top holdings include the Canadian banks, CN and CP Rail and Enbridge and TC Energy Corp, and Brookfield Investments. There is a minimum investment required of $100.

2. TD North American Dividend Fund (TDB619)

AUM $1.5 billion | MER 2.22%| 3 YR Return 4.91%| 5 YR Return 6.94%

The TD North American Dividend Fund invests 69% in U.S. Equities such as Coca-Cola, Johnson & Johnson, Cisco Systems, Merck & Company, and Boeing. It makes distributions quarterly. There is a minimum investment required of $100.

3. TD Monthly Income Fund (TDB622)

AUM $4.9 billion | MER 1.47%| 3 YR Return-.07%|5 YR Return 2.23%

The TD Monthly Income Fund offers monthly income with capital appreciation and invests in government bonds, the big Canadian banks, Enbridge, Brookfield Asset Management, and CN Rail, as well as cash and securities. There is a minimum investment required of $100.

How to invest in TD mutual funds

Step 1: Find a mutual fund advisor

You must purchase mutual funds through a licensed mutual fund advisor. TD Mutual funds are sold through a mutual fund advisor who is licensed in the province where you live. Not everyone in a bank branch is licensed to sell mutual funds. Licensed employees who work for the bank are normally allowed to sell only the bank’s suite of mutual funds. You can learn more about mutual fund licensing and check if a representative is licensed in Canada through the Canadian Securities Administrators.

Step 2: Determine your investment profile and goals

The mutual fund advisor will go over your investment concerns, goals and risk tolerance with you, and recommend funds that will suit your investment style best. They may recommend individual funds, or an investment portfolio that has been assembled to meet specific investment objectives. Remember, this is your money, and you can ask as many questions as you need to to understand what you are investing in.

Step 3: Begin investing

You can make a lump sum contribution, or you can set up automatic monthly deposits from your bank account to your investment account. Many funds have an initial minimum required to invest. You can check your investment performance online, and you will receive statements quarterly, semi-annually, or annually.

TD gives you the option of opening a self-directed investment account that allows you to choose your own investments. You request the buys or sells you want to make, and they are processed through TD Asset Management. There are different options depending on the type of trading you intend to make. Any trading fees would be in addition to the fund fees and not all funds are eligible. Check the fund facts for eligibility.

TD also offers index funds that try to replicate equity or bond indices. Index funds are considered “passive” investments, and typically have a lower MER.

Step 4: Keep your goals in mind

When you invest in mutual funds, the value on any given day can vary widely. depending on what the stock market has done. There can be large swings up and down, so it’s a good idea to keep your long-term goals in mind. If you have concerns about what your funds are doing, check with your advisor.

If you want to change your fund direction, or take money out, ask your advisor. Normally you can redeem your units (withdraw your money) from a mutual fund at any time, although it can take 2-3 days to process unless you have a money market fund, which is like a cash account.

The information on this page was compiled by Wealthsimple in June, 2020 by reviewing TD’s website, press releases, and third-party sites.

A word of warning

Mutual fund accounts are not protected by the Canadian Deposit Insurance Corporation. Investors may lose some or all of their investment. Always read the prospectus to understand what you are investing in, what level of risk is involved, and what fees and charges may be associated with the mutual fund. Please remember that all information provided here is general information and not intended to be advice. Past fund performance may not be indicative of future earnings.

Last Updated June 8, 2022

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