Epoch International Equity Fund 534072 (08/16)
TD Mutual Funds Semi-Annual Management Report of Fund Performance for the period ended June 30, 2016
This Interim Management Report of Fund Performance contains financial highlights, but does not contain either the complete interim financial report or annual financial statements of the investment fund. You can get a copy of the interim financial report or annual financial statements at your request, at no cost, by calling 1-800-386-3757, by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8, by e-mail to
[email protected], or by visiting our website at tdassetmanagement.com or the SEDAR website at sedar.com Securityholders may also contact us or visit our website to get a copy of the investment fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure at no cost. This Interim Management Report of Fund Performance represents management’s view of the significant factors and developments affecting the investment fund’s performance and outlook since December 31, 2015, the investment fund’s fiscal year-end, until June 30, 2016. This report should be read in conjunction with the 2015 Annual Management Report of Fund Performance.
n
Epoch International Equity Fund
Management Discussion of Fund Performance
At the end of the Reporting Period, the Fund’s largest relative positions were in the consumer discretionary (4.8 percent), telecom munications (1.7 percent), information technology (1.6 percent) and health care (1.9 percent) sectors, while the most significant less-than-benchmark weights were in the industrials (-5.5 percent), utilities (-3.9 percent) and financials (-3.5 percent) sectors.
Results of Operations
The Investor Series units of the Epoch International Equity Fund (“Fund”) returned negative 11.6 percent for the six-month period ended June 30, 2016 (“Reporting Period”), versus negative 10.6 percent for the Fund’s product benchmark, the MSCI EAFE Index (Net Dividend, C$). Returns for other series of the Fund may vary, largely due to differences in fees and expenses. Unlike the benchmark, the Fund’s return is quoted after the deduction of fees and expenses.
Assets The Fund’s Private Series units increased significantly resulting from the merger with the TD Private International Equity Fund on February 12, 2016.
Market Update Stocks globally ended the Reporting Period broadly lower driven by several headline events as the global economy continues to stagnate, and appears to be devoid of any significant growth prospects. Global equity markets came under pressure early in the Reporting Period amidst a steep decline in oil prices and concern over the ongoing rebalancing and deleveraging of the Chinese economy. Oil prices touched a thirteen-year low, dropping below US$27 per barrel before recovering as more constructive dialog from Saudi Arabia and declining capital expenditures in the U.S. helped improve sentiment.
Recent Developments
European equity markets outside the U.K. were down about 8 percent in U.S. dollar terms for the Reporting Period. Contrary to the U.K., small-cap equities significantly outperformed large-cap equities. Bond yields declined, the yield on the 10-year German bund fell into negative territory on June 14 and declined further in response to U.K.’s vote to leave the European Union, referred to as “Brexit”, and on expectations of additional easing by the European Central Bank, although peripheral spreads widened moderately. Pacific equity markets ended the Reporting Period lower, dragged down Japan where economic activity remained weak, particularly in areas such as industrial production, capex and exports.
Related Party Transactions
The outlook for earnings remains challenging, partially due to rising unit labour costs. Even on an ex-energy basis, the Portfolio Adviser expects minimal earnings growth in 2016. Additionally, equity markets appear to already be fully valued and the Portfolio Adviser sees little room for valuation multiples to expand. Given that backdrop, the Fund remains invested in companies that have proven they can grow their free cash flow, even in a weak economic environment, and have a disciplined approach to allocating cash for the benefit of shareholders. Affiliates of TD Asset Management Inc. (“TDAM”) may earn fees and spreads in connection with various services provided to, or transactions with, the Fund, such as in connection with banking, custody, brokerage and derivatives transactions. Manager, Trustee and Portfolio Adviser: TDAM, a wholly-owned subsidiary of The Toronto-Dominion Bank (“TD”), is the manager, trustee and portfolio adviser of the Fund. TDAM has appointed Epoch Investment Partners, Inc., an affiliate of TDAM, as portfolio adviser for the Fund in addition to TDAM. The Fund pays TDAM an annual management fee, which may vary for each series of Fund units, and an annual admin istration fee of 0.30 percent with respect to the Investor Series, Advisor Series and D-Series units of the Fund.
Key Contributors/Detractors The Fund provided a positive relative return for the Reporting Period. Stock selection was the most significant factor, providing a significant contribution in the consumer discretionary and information technology sectors and detracting in the financials sector. From a regional perspective, stock selection and a relative underweight position in Japan, which underperformed the market, helped relative results while stock selection in Switzerland and the U.K. was a relative detractor.
Distributor: Certain series units of the Fund are distributed through brokers and dealers including TD Waterhouse Canada Inc. (“TDW”), a wholly-owned subsidiary of TD. TDW, like other dealers, is paid a trailer commission by TDAM for distrib uting certain series of units of the Fund. Trailer commissions are paid by TDAM out of the management fees it receives from the Fund and are based on the average value of assets held by each dealer.
During the Reporting Period, the most significant change in the Fund’s positioning was a reduction in the exposure to financial stocks. The Fund reduced its exposure after the Brexit based on the Portfolio Adviser’s expectations for a slow-down in European growth, the risk of political contagion, persistently low interest rates, and general uncertainty around the exit process. In addition, the significant under-performance of the financial sector meaningfully contributed to the decline in the overall weight.
June 30, 2016
1
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Registrar and Transfer Agent: TD is the registrar and transfer agent of the Fund, and as such maintains all unitholder records, processes purchase, switch, conversion and redemption orders, issues investor statements and prepares annual tax reporting information on behalf of the Fund.
TD earns a foreign exchange spread when unitholders switch between units of funds denominated in different currencies. The Fund also maintains bank accounts and overdraft provisions with TD for which TD earns a fee. Administration and Securityholder Services: TDW, in addition to acting as a dealer, also provides administration and securityholder services to the Private Series units of the Fund for which such costs are reflected in the operating expenses for the Private Series units of the Fund. These services include securityholder account maintenance and reporting. Buying and Selling Securities: TDAM has established an independent review committee (“IRC”) which acts as an impartial and independent committee to review and provide recommendations or, if appropriate, approvals respecting any conflict of interest matters referred to it by TDAM. The IRC prepares, at least annually, a report of its activities for securityholders of the Fund. The report is available on the TDAM website at tdassetmanagement.com or at the securityholder’s request at no cost by contacting TDAM (see front cover).
The Fund did not engage in any portfolio transactions requiring IRC approval during the Reporting Period.
June 30, 2016
2
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial performance for the six-month period ended June 30, 2016 and the past five fiscal years, as applicable. Net Assets per Unit 1 INVESTOR SERIES
Net Assets, Beginning of Period
2016
$
2013*
2012
2011
12.41 $
10.49 $
2015
11.10 $
2014
10.00 †
N/A
N/A
0.23 (0.18) (0.13) (1.33)
0.32 (0.39) 0.57 1.27
0.47 (0.36) 0.45 (0.92)
0.34 (0.14) (0.06) 1.19
N/A N/A N/A N/A
N/A N/A N/A N/A
(1.41)
1.77
(0.36)
1.33
N/A
N/A
0.00 0.00 (0.23) 0.00
(0.15) 0.00 (0.46) 0.00
(0.05) 0.00 (0.03) 0.00
N/A N/A N/A N/A
N/A N/A N/A N/A
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
0.00
(0.61)
(0.08)
N/A
N/A
10.49 $
11.10
N/A
N/A
2013*
2012
2011
10.00 †
N/A
N/A
0.39 (0.17) (0.03) 1.27
N/A N/A N/A N/A
N/A N/A N/A N/A
(0.30)
1.46
N/A
N/A
(0.16) 0.00 (0.49) 0.00
(0.04) 0.00 (0.02) 0.00
N/A N/A N/A N/A
N/A N/A N/A N/A
10.97 $
$
12.36 $
10.46 $
11.12 $
0.21 (0.18) (0.11) (1.55)
0.34 (0.39) 0.65 0.92
0.51 (0.36) 0.51 (0.96)
(1.63)
1.52 0.00 0.00 (0.27) 0.00
ADVISOR SERIES
Net Assets, Beginning of Period
(0.23) 12.41 $
$
2016
2015
2014
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
0.00 $
10.92 $
(0.27)
(0.65)
(0.06)
N/A
N/A
12.36 $
10.46 $
11.12
N/A
N/A
1 This information is derived from the Fund’s interim and audited annual financial statements. The Fund adopted International Financial Reporting Standards (“IFRS”) on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles (“GAAP”) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value (“NAV”) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund’s accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the NAV for transactions with unitholders. 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations are based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of the net assets per unit. 3 Distributions were paid in cash or reinvested in additional units of the Fund, or both.
* Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date.
† Initial offering price.
June 30, 2016
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Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Net Assets per Unit 1 (continued) F-SERIES
Net Assets, Beginning of Period
2016
$
2013*
2012
2011
12.49 $
10.58 $
2015
11.18 $
2014
10.00 †
N/A
N/A
0.25 (0.10) (0.13) (0.88)
0.34 (0.21) 0.65 1.37
0.53 (0.20) 0.49 (1.02)
0.39 (0.13) (0.03) 1.51
N/A N/A N/A N/A
N/A N/A N/A N/A
(0.86)
2.15
(0.20)
1.74
N/A
N/A
(0.15) 0.00 (0.30) 0.00
(0.29) 0.00 (0.46) 0.00
(0.04) 0.00 (0.02) 0.00
N/A N/A N/A N/A
N/A N/A N/A N/A
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
0.00
(0.75)
(0.06)
N/A
N/A
10.58 $
11.18
N/A
N/A
2014
2013
2012
2011
N/A
N/A
N/A
N/A
0.04 (0.07) 0.10 0.44
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
0.51
N/A
N/A
N/A
N/A
0.00 0.00 (0.02) 0.00
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
0.00
(0.02)
N/A
N/A
N/A
N/A
9.38 $
10.58
N/A
N/A
N/A
N/A
11.12 $
2015*
$
10.58 $
10.00 †
0.22 (0.12) (0.13) (0.79) (0.82)
D-SERIES
Net Assets, Beginning of Period
(0.45) 12.49 $
$
2016
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
$
PRIVATE SERIES
Net Assets, Beginning of Period
$
2016^
2015
2014
2013
2012
2011
10.00 †
N/A
N/A
N/A
N/A
N/A
0.20 (0.04) (0.09) 0.05
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
0.12
N/A
N/A
N/A
N/A
N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
0.00
N/A
N/A
N/A
N/A
N/A
9.72
N/A
N/A
N/A
N/A
N/A
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
$
1 This information is derived from the Fund’s interim and audited annual financial statements. The Fund adopted International Financial Reporting Standards (“IFRS”) on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles (“GAAP”) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value (“NAV”) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund’s accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the NAV for transactions with unitholders. 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations are based on the weighted average number of units outstanding over the financial periods. This table is not intended to be a reconciliation of the net assets per unit. 3 Distributions were paid in cash or reinvested in additional units of the Fund, or both.
* Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date. ^ Data reported represents results from the commencement of operations on February 4, 2016 to June 30, 2016. † Initial offering price.
June 30, 2016
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Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Net Assets per Unit 1 (continued) O-SERIES
Net Assets, Beginning of Period
2016
$
2013*
2012
2011
12.33 $
10.48 $
2015
11.15 $
2014
10.00 †
N/A
N/A
0.22 (0.04) (0.13) (1.41)
0.34 (0.08) 0.72 1.49
0.53 (0.07) 0.54 (0.72)
0.27 (0.04) (0.04) 1.20
N/A N/A N/A N/A
N/A N/A N/A N/A
(1.36)
2.47
0.28
1.39
N/A
N/A
(0.29) 0.00 (0.33) 0.00
(0.45) 0.00 (0.51) 0.00
(0.12) 0.00 (0.04) 0.00
N/A N/A N/A N/A
N/A N/A N/A N/A
Increase (Decrease) from Operations:
Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period Total Increase (Decrease) from Operations 2 Distributions:
From Net Investment Income (excluding dividends) From Dividends From Capital Gains Return of Capital Total Annual Distributions 3 Net Assets, End of Period
$
(0.03)
(0.62)
(0.96)
(0.16)
N/A
N/A
11.02 $
12.33 $
10.48 $
11.15
N/A
N/A
1 This information is derived from the Fund’s interim and audited annual financial statements. The Fund adopted International Financial Reporting Standards (“IFRS”) on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles (“GAAP”) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value (“NAV”) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund’s accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the NAV for transactions with unitholders. 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations are based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of the net assets per unit. 3 Distributions were paid in cash or reinvested in additional units of the Fund, or both.
* Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date. † Initial offering price.
Ratios and Supplemental Data INVESTOR SERIES
Total Net Asset Value (000s) 1 Number of Units Outstanding 1 Management Expense Ratio (%) 2 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
2016
$
$
ADVISOR SERIES
Total Net Asset Value (000s) 1 Number of Units Outstanding 1 Management Expense Ratio (%) 2 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
2.56 0.15 19.82 10.97 $ 2016
$
$
2015
2014
3,378 $ 3,685 $ 1,475 $ 307,859 296,926 140,664 2.56 2.57 2.59 2.57 0.31 67.73 12.41 $ 2015
2.60 0.17 62.28 10.49 $ 2014
3,067 $ 5,396 $ 1,851 $ 280,719 436,675 176,917 2.57 2.55 2.56 2.57 0.15 19.82 10.92 $
2.56 0.31 67.73 12.36 $
2.56 0.17 62.28 10.46 $
2013
2012
2011
358 32,225 2.60
N/A N/A N/A
N/A N/A N/A
2.60 0.61 109.15 11.10
N/A N/A N/A N/A
N/A N/A N/A N/A
2013
2012
2011
317 28,516 2.59
N/A N/A N/A
N/A N/A N/A
2.59 0.61 109.15 11.12
N/A N/A N/A N/A
N/A N/A N/A N/A
1 This information is provided as at June 30, 2016 and December 31 of the past five fiscal years, as applicable. 2 Management expense ratio (“MER”) is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average NAV during the period. It excludes any operating expenses waived or absorbed by TDAM, which may be discontinued at any time by TDAM at its discretion without notice. 3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average NAV during the stated period. 4 The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio adviser manages its investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the stated period. The higher a fund’s portfolio turnover rate, the greater the trading costs payable by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a fund.
June 30, 2016
5
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
F-SERIES
2016
Total Net Asset Value (000s) 1 Number of Units Outstanding 1 Management Expense Ratio (%) 2 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
$
$
D-SERIES
1.10 0.15 19.82 11.12 $ 2016
(000s) 1
Total Net Asset Value Number of Units Outstanding 1 Management Expense Ratio (%) 2 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
$
$
PRIVATE SERIES
Total Net Asset Value (000s) 1 Number of Units Outstanding 1 Management Expense Ratio (%) 2 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
2014
1.08 0.31 67.73 12.49 $
1.13 0.17 62.28 10.58 $
2013
2012
2011
112 9,996 1.13
N/A N/A N/A
N/A N/A N/A
1.13 0.61 109.15 11.18
N/A N/A N/A N/A
N/A N/A N/A N/A
2015
2014
2013
2012
2011
144 $ 15,387 1.69
54 5,137 1.75
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
1.69 0.15 19.82 9.38 $
1.75 0.31 67.73 10.58
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
2016
2015
2014
2013
2012
2011
$ 598,197 61,552,576 0.03
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
0.03 0.15 19.82 9.72
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
2016
2015
2014
2013
2012
2011
$ 828,335 $ 1,015,939 $ 730,842 $ 682,085 75,186,850 82,376,922 69,746,361 61,171,961 0.00 0.00 0.00 0.00
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
$
O-SERIES
Total Net Asset Value (000s) 1 Number of Units Outstanding 1 Management Expense Ratio (%) 2,5 Management Expense Ratio Before Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit
2015
3,232 $ 1,938 $ 1,197 $ 290,591 155,134 113,111 1.10 1.08 1.13
$
0.00 0.15 19.82 11.02 $
0.00 0.31 67.73 12.33 $
0.00 0.17 62.28 10.48 $
0.00 0.61 109.15 11.15
1 This information is provided as at June 30, 2016 and December 31 of the past five fiscal years, as applicable. 2 Management expense ratio (“MER”) is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average NAV during the period. It excludes any operating expenses waived or absorbed by TDAM, which may be discontinued at any time by TDAM at its discretion without notice. 3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average NAV during the stated period. 4 The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio adviser manages its investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the stated period. The higher a fund’s portfolio turnover rate, the greater the trading costs payable by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. 5 No fees or expenses are paid by this series.
June 30, 2016
6
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Management Fees
As manager and trustee of the Fund, TDAM is responsible for the overall business and affairs of the Fund including activities related to making units of the Fund available to investors, and providing, or arranging for the provision of, investment advisory services and marketing services to the Fund. In consideration for the provision of such services, each series of the Fund, other than O-Series units and Private Series units, pays TDAM a management fee. Management fees are calculated and accrued as a percentage of the net asset value of each series of units of the Fund, as of the close of business on each business day for each series and are paid monthly to TDAM. The maximum management fee is the maximum fee that can be charged to each series of units of the Fund according to the simplified prospectus. TDAM may charge management fees that are less than the management fees TDAM is otherwise entitled to charge each series of units of the Fund. The actual management fee is the annualized fee that was charged for the Reporting Period. TDAM may charge the maximum management fee without notice to unitholders. Management fees for the Reporting Period, annualized, and a breakdown of the major services rendered for each series, as a percentage of the actual management fees, are as follows: (expressed as a %)
Investor Series Advisor Series F-Series D-Series Private Series O-Series
Maximum Mgmt. Fee
2.00 2.00 1.00 1.25 0.00 0.00
Actual Dealer Mgmt. Fee Compensation
2.00 2.00 1.00 1.25 0.00 0.00
50.01 53.34 0.00 18.17 N/A N/A
Waived Expenses
0.10 0.10 0.21 0.17 N/A N/A
Other‡
49.89 46.56 99.79 81.66 N/A N/A
There are no management fees paid by the Fund in respect of Private Series units of the Fund and there are no management fees or expenses paid by the Fund in respect of O-Series units of the Fund. Unitholders in the O-Series pay a negotiated fee directly to TDAM. Unitholders in the Private Series pay a negotiated fee directly to TDAM, their dealer or TD Waterhouse Private Investment Counsel Inc.
‡ Investment advisory, trustee, marketing services and other.
June 30, 2016
7
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Past Performance
The following charts show how the Fund has performed in the past, and can help you understand the risks of investing in the Fund. These returns include the reinvestment of all distributions and would be lower if an investor did not reinvest distributions. They do not include deduction of sales, switch, redemption, or other optional charges (which dealers may charge) or income taxes payable, and these returns would be lower if they did. The Fund’s past performance does not necessarily indicate how it will perform in the future.
FYQSFTTFEBTB
Year-by-year returns
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The bar charts show how the Fund’s performance has varied from year to year for each of the years shown. They show in percentage terms how an investment made on January 1 would have increased or decreased by December 31 for each year and for the six-month period ended June 30, 2016.
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June 30, 2016
8
Semi-Annual Management Report of Fund Performance
Epoch International Equity Fund
Summary of Investment Portfolio as at June 30, 2016
as at June 30, 2016
% of Net Asset Value
ASSET ALLOCATION
International Equities Cash Other Net Assets (Liabilities)
TOP 25 INVESTMENTS
96.7 3.3 0.0
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.
GEOGRAPHIC ALLOCATION
United Kingdom Japan France Switzerland Netherlands Germany Israel South Korea Belgium Spain Other Countries Cash Other Net Assets (Liabilities)
TOTAL NET ASSET VALUE
% of Net Asset Value
20.4 19.3 12.4 8.6 7.8 7.2 3.1 2.2 1.9 1.9 11.9 3.3 0.0
$ 1,436,352,869
Cash Novartis AG Roche Holding AG TOTAL SA Royal Dutch Shell PLC Airbus Group SE Unilever PLC Samsung Electronics Co., Ltd. Calbee Inc. Sanofi Teva Pharmaceutical Industries Limited Diageo PLC Vodafone Group PLC Smith & Nephew PLC Japan Tobacco Inc. Anheuser-Busch Inbev NV Cellnex Telecom SAU Amcor Limited Continental AG Fuji Heavy Industries Ltd. ProSiebenSat.1 Media AG AIA Group Ltd. Singapore Exchange Limited Nippon Telegraph and Telephone Corporation Mitsubishi UFJ Financial Group Inc. Total % of Net Asset Value represented by these holdings
3.3 3.2 3.2 2.6 2.6 2.5 2.4 2.2 2.2 2.2 2.2 2.1 2.0 1.9 1.9 1.9 1.9 1.9 1.8 1.8 1.8 1.8 1.8 1.8 1.7 54.7
Note: Totals may not add due to rounding to one decimal place of individual figures.
The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund. Updates are available quarterly. You may obtain the most current quarterly information by contacting TD Mutual Funds at 1-800-386-3757, by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto, Ontario, M5K 1G8, or by e-mail to
[email protected] June 30, 2016
9
Semi-Annual Management Report of Fund Performance
Caution regarding forward-looking statements Certain portions of this report, including, but not limited to, “Results of Operations” and “Recent Developments”, may contain forward-looking state ments including, but not limited to, statements about the Fund, its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future general economic, political and relevant market factors, such as interest rates, foreign exchange rates, equity and capital markets, and the general business environment, in each case assuming no changes to applicable tax or other laws or government regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable. Accordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could con tribute to these digressions, including, but not limited to, general economic, political and relevant market factors in North America and internationally, interest and foreign exchange rates, equity and capital markets, business competition, tech nological change, changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events. The above mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing any undue reliance on forward-looking statements. Further, there is no specific intention of updating any forward-looking statements contained herein whether as a result of new information, future events or otherwise.
For Funds with references to FTSE TMX Canada indices:
FTSE TMX Global Debt Capital Markets Inc © 2016 “FTSE®” is a trade mark of FTSE International Ltd and is used under licence. “TMX” is a trade mark of TSX Inc. and is used under licence. All rights in the FTSE TMX Global Debt Capital Markets Inc’s indices and/or FTSE TMX Global Debt Capital Markets Inc’s ratings vest in FTSE TMX Global Debt Capital Markets Inc and/or its licensors. Neither FTSE TMX Global Debt Capital Markets Inc nor its licensors accept any liability for any errors or omissions in such indices and/or ratings or underlying data. No further distribution of FTSE TMX Global Debt Capital Markets Inc’s data is permitted without FTSE TMX Global Debt Capital Markets Inc’s express written consent.
TD Mutual Funds and TD Pools are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank. Epoch Investment Partners, Inc. (“Epoch”) is a wholly-owned subsidiary of The Toronto-Dominion Bank and an affiliate of TD Asset Management. TD Asset Management operates in Canada through TD Asset Management Inc. and in the U.S. through TDAM USA Inc. All trademarks are the property of their respective owners. ® The TD logo and other trade-marks are the property of The Toronto-Dominion Bank.
June 30, 2016
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Semi-Annual Management Report of Fund Performance
