Mutual Funds




             TD Energy Fund




             2008 Semi-Annual
             Management Report of Fund Perf...
TD Energy Fund

Management Discussion of Fund Performance                               The Portfolio Adviser believes tha...
TD Energy Fund




Valuation of Investments in Financial Statements                       and their resulting impact, if a...
TD Energy Fund




Financial Highlights                                                                                   ...
TD Energy Fund




F-SERIES                                            2008          2007          2006            2005   ...
TD Energy Fund




Past Performance                                                       60.0     I N V ESTO R S ER I ES ...
TD Energy Fund




Summary of Investment Portfolio                          Top 25 Investments
as at June 30, 2008        ...
Caution regarding forward-looking statements
Certain portions of this report, including, but not limited to, “Results of O...
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TD Mutual Funds - 2008 Semi-Annual MRFP

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TD Mutual Funds - 2008 Semi-Annual MRFP

  1. 1. Mutual Funds TD Energy Fund 2008 Semi-Annual Management Report of Fund Performance as at June 30, 2008 The Interim Management Report of Fund Performance contains Securityholders may also contact us using one of these methods financial highlights, but does not contain either interim or to request a copy of the investment fund’s proxy voting policies annual financial statements of the investment fund. You can and procedures, proxy voting disclosure record, or quarterly get a copy of the interim or annual financial statements at your portfolio disclosure. request, and at no cost, by calling 1-800-386-3757, by writing to us at TD Asset Management Inc., TD Canada Trust Tower, This Interim Management Report of Fund Performance represents 35th Floor, 161 Bay Street, Toronto, Ontario, M5J 2T2, or by management’s view of the significant factors and developments visiting our website at, www.tdassetmanagement.com or SEDAR affecting the Fund’s performance and outlook since December 31, at www.sedar.com or by e-mail to td.mutualfunds@td.com. 2007, the Fund’s fiscal year-end, until June 30, 2008. This report should be read in conjunction with the 2007 Annual Management Report of Fund Performance.
  2. 2. TD Energy Fund Management Discussion of Fund Performance The Portfolio Adviser believes that commodity prices will continue to remain well above historical long-term averages Results of Operations for numerous reasons, including higher production costs, The Fund returned 21.4 percent* during the first six months increased political tensions, and industrializing trends in of 2008. China and India. Factors such as permitting delays, technical Energy stocks have been volatile in 2008. These swings aren’t labour shortages, feedstock and capital access, a lack of unexpected, as energy stocks are cyclical by nature and new material discoveries, and higher costs continue to restrict should be expected to have some pullbacks during a secular supply. Any weakness in currencies should be positive for up cycle. Oil prices tend to fluctuate due to political events, commodity prices. Consolidation remains a theme in the perceived supply and demand imbalances, and economic sector. Rising finding and development costs, reasonable expectations. Over the first half of 2008, the energy sector valuations and strong cash flows drive should also drive was the best performing sector of the S&P/TSX Composite the uptrend. Index. This positive performance improved on the sector’s The Portfolio Adviser does not change the investment strategy middle of the pack performance in 2007. in anticipation of, or speculation on, consolidation. The focus Oil prices generally rose through the first half of the year, and continues to be on companies with high quality asset bases, by the end of June, the oil price reached a record level of internally funded long-term growth opportunities, led by US$140 a barrel on expectations of sustained demand, proven management teams, and financial strength. restricted supply, higher costs of extracting and processing Amendments to the Income Tax Act (Canada) (“Tax Act”) oil, and geopolitical uncertainty. Organization of Petroleum announced in 2006 significantly changed the income tax Exporting Countries appears content to sit on the sidelines treatment of most publicly traded income trusts and limited in the interim. Natural gas prices rallied on an improved partnerships (other than certain real estate investment trusts) supply/demand balance due to a colder than expected and distributions or allocations, as the case may be, from winter and fewer liquefied natural gas shipments to North these entities to their investors. In particular, certain income America helping to drawdown inventories. Additionally, the earned by these entities will be taxed in a manner similar announced increases in royalties in Alberta on October 25, to income earned by a taxable Canadian corporation, and 2007 impacted activity levels of companies over the winter, distributions or allocations made by these entities to investors but a rebound in commodity prices has recently boosted will be taxed in a manner similar to dividends from taxable capital spending budgets. Canadian corporations. These distributions or allocations EnCana Corp. and Helmerich & Payne were strong contributors will be deemed to be eligible dividends for the enhanced to performance, while Marathon Oil Corp. and Petro-Canada dividend tax credit if paid or allocated to a resident of Canada. were the largest detractors to the Fund’s performance. There These rules are effective commencing for the 2007 taxation were no significant asset mix and sector changes in the Fund year for such income trusts and limited partnerships that during the first half of 2008. commenced public trading after October 31, 2006, but will not commence until the 2011 taxation year for such income trusts The Advisor series and F-series each had a material increase and limited partnerships that were publicly traded prior to in assets during the period due to investors seeking exposure November 1, 2006, provided there is no “undue expansion” to energy related stocks. of the trust or limited partnership in the intervening period. Recent Developments The new rules will reduce the tax effectiveness to investors. Events that could affect the performance of the Fund include In addition, the rules have had, and may continue to have, an oil and natural gas prices, currency fluctuations, and consoli- adverse effect on the trading price of such income trusts dation within the industry. The Portfolio Adviser continues to and limited partnerships, which may affect the net asset value have a positive long-term view of oil and natural gas prices. of the relevant fund. Secular supply/demand fundamentals appear robust despite the material commodity price increases. Further, some recent economic data point to a cyclical easing in the U.S., but the Portfolio Adviser sees little evidence of an imminent global economic slowdown. * Return quoted is on Investor series units. Returns for other series of units of the Fund may vary, largely due to differences in management fees and expenses. June 30, 2008 1 2008 Semi-Annual Management Report of Fund Performance
  3. 3. TD Energy Fund Valuation of Investments in Financial Statements and their resulting impact, if any, on the net assets or net In accordance with Section 3855, “Financial Instruments – asset value of the Fund. Recognition and Measurement” of the Canadian Institute of Related Party Transactions Chartered Accountants (“CICA”) Handbook – Accounting, Affiliates of TD Asset Management Inc. (“TDAM”) may earn which establishes standards for the valuation of investments fees and spreads in connection with various services provided and the accounting treatment of transaction costs, invest- to, or transactions with, the Fund, such as in connection with ments that are traded in an active market where quoted banking, custody, brokerage and derivatives transactions. prices are readily and regularly available, Section 3855 requires the use of bid prices for long positions and ask prices Manager, Trustee and Portfolio Adviser: for short positions in the fair valuation of investments, rather TDAM, a wholly-owned subsidiary of The Toronto-Dominion than the use of closing prices. Transaction costs, such as Bank (“TD Bank”), is the manager, trustee and portfolio adviser brokerage commissions, incurred in the purchase and sale of of the Fund. The Fund pays TDAM an annual management fee, securities are to be charged to net income in the period rather and an annual administration fee of 0.20 percent with respect than being added to the cost of the securities purchased or to the Investor Series and Advisor Series units of the Fund. deducted from the proceeds of sale. The Fund may hold investments in affiliated entities of TDAM. Under current Canadian securities rules the Net Asset Value TDAM has established an independent review committee (“NAV”) of the Fund must be calculated in accordance with (“IRC”) in respect of each of the investment funds managed Canadian generally accepted accounting principles (“GAAP”). by TDAM, including the Fund, to which National Instrument The Canadian securities regulatory authorities have granted 81-107 Independent Review Committee for Investment Funds relief to all investment funds, including the Fund, from comply- applies. The IRC acts as an impartial and independent ing with certain changes to Canadian GAAP for the purposes committee to review and, if appropriate, provide approvals or of calculating and reporting NAV (other than in financial state- recommendations respecting any conflict of interest matters ments). The relief allows the Fund to calculate NAV in the referred to it by TDAM. The IRC prepares, at least annually, a same way as it is currently calculated by using the closing report of its activities for unitholders. The report is available prices of the securities held ("Transactional NAV") (other than on the TDAM website at www.tdassetmanagement.com in financial statements). The relief is for an interim period or at the unitholder’s request at no cost by contacting TDAM ending on the earlier of September 30, 2008 or the date on (see front cover). which proposed amendments to National Instrument 81-106 – Investment Fund Continuous Disclosure (“NI 81-106”) that Additional information about the IRC, including the names are consistent with this relief are finalized. The Canadian of the members, is available in the annual information form. securities regulatory authorities have published amendments Distributor: to NI 81-106, in final form, that would remove the requirement For certain series of units of the Fund, TD Investment Services that NAV be calculated in accordance with Canadian GAAP Inc., a wholly-owned subsidiary of TD Bank, is the principal (other than in financial statements). Provided all necessary distributor for which it is paid a trailer commission by TDAM. approvals are obtained, the amendments will come into force Units of the Fund are also distributed through brokers and on September 8, 2008. As a result of the amendments, the dealers including TD Waterhouse Canada Inc. (“TDW”), a NAV of the Fund (other than in financial statements) will wholly-owned subsidiary of TD Bank. TDW, like other dealers, continue to be calculated using the fair value of the assets is paid a trailer commission by TDAM for distributing certain and liabilities of the Fund. series of units of the Fund. Trailer commissions are paid by Future Accounting Change TDAM out of the management fees it receives from the The Canadian Accounting Standards Board recently confirmed Fund and are based on the average value of assets held by January 1, 2011 as the date International Financial Reporting each dealer. Standards (“IFRS”) will replace current Canadian standards Other: and interpretations as Canadian GAAP for publicly accountable TD Bank earns a foreign exchange spread when unitholders enterprises, which includes investment funds. Management switch between units of funds denominated in different is in the process of developing a changeover plan, which will currencies. The Fund also maintains bank accounts and over- include identifying differences between the Fund’s current draft provisions with TD Bank for which TD Bank earns a fee. accounting policies and those it expects to apply under IFRS, as well as any accounting policy and implementation decisions June 30, 2008 2 2008 Semi-Annual Management Report of Fund Performance
  4. 4. TD Energy Fund Financial Highlights 1 The net asset value per unit is shown as the Canadian GAAP NAV per unit for all periods since The following tables show selected key financial information about the Fund and are intended to help January 1, 2007 and is derived you understand the Fund’s financial performance for the period ended June 30, 2008 and the previous from the Fund’s financial state- ments. The Transactional NAV five fiscal years. This information is derived from the Fund’s unaudited interim financial statements per unit is shown for all periods for the period ended June 30, 2008 and audited annual financial statements for prior periods. prior to January 1, 2007. The net assets presented in the financial statements may differ from the INVESTOR SERIES 2008 2007 2006 2005 2004 2003 net asset value calculated for fund pricing purposes. An explanation NET ASSET VALUE (NAV) PER UNIT of these differences, and a recon- Net Asset Value, Beginning of Period 1 $ 32.70 $ 31.16 $ 29.96 $ 19.25 $ 14.58 $ 11.64 ciliation between the GAAP NAV per unit and the Transactional Increase (Decrease) from Operations: NAV per unit, can be found in Total Revenue 0.27 0.71 0.72 0.42 0.23 0.22 the Fund's 2008 Semi-Annual Total Expenses (0.37) (0.72) (0.68) (0.57) (0.41) (0.30) Financial Statements in note 9 of the notes to financial statements. Realized Gains (Losses) for the Period 0.81 4.78 1.57 1.86 1.08 0.26 2 Net asset value and distributions Unrealized Gains (Losses) for the Period 6.16 (3.22) (0.62) 8.62 3.74 2.64 are based on the actual number of units outstanding at the relevant Total Increase (Decrease) from Operations 2 6.87 1.55 0.99 10.33 4.64 2.82 time. The increase (decrease) from Distributions: operations is based on the weight- ed average number of units out- From Income (excluding dividends) 0.00 0.00 0.00 0.00 0.00 standing over the financial period. From Dividends 0.00 0.00 0.00 0.00 0.00 This table is not intended to be From Capital Gains 0.00 0.00 0.00 0.00 0.00 a reconciliation of the net asset Return of Capital 0.00 0.00 0.00 0.00 0.00 value per unit. 3 Distributions were paid in cash Total Distributions 3 0.00 0.00 0.00 0.00 0.00 0.00 or reinvested in additional units of the Fund. Net Asset Value, End of Period 1 $ 39.67 $ 32.70 $ 31.21 $ 29.96 $ 19.25 $ 14.58 4 This information is provided as at June 30, 2008 and December 31 RATIOS AND SUPPLEMENTAL DATA (BASED ON TRANSACTIONAL NAV) of each of the five previous years. 5 Net Assets (000s) 4 $ 303,300 $ 256,428 $ 292,066 $ 297,652 $ 146,764 $ 111,316 Management Expense Ratio is based on Total Expenses excluding Number of Units Outstanding 4 7,623,504 7,823,410 9,358,889 9,934,570 7,624,077 7,637,222 portfolio transaction costs for the Management Expense Ratio (%) 5 2.15 2.17 2.17 2.29 2.50 2.45 stated period and is expressed as Management Expense Ratio Before an annualized percentage of daily Waivers or Absorptions (%) 2.15 2.18 2.17 2.29 2.50 2.60 average net assets during the period. It excludes any operating Portfolio Turnover Rate (%) 6 2.26 11.23 8.73 18.22 18.08 16.07 expenses waived or absorbed by Trading Expense Ratio (%) 7 0.01 0.03 0.03 0.07 0.08 0.10 TDAM, which may be discontinued at any time by TDAM at its discre- ADVISOR SERIES 2008 2007 2006 2005 2004 2003 tion without notice. 6 The Fund's Portfolio Turnover Rate NET ASSET VALUE (NAV) PER UNIT indicates how actively the Fund's Portfolio Adviser manages its Net Asset Value, Beginning of Period 1 $ 10.51 $ 10.03 $ 10.00† N/A N/A N/A investments. A portfolio turnover Increase (Decrease) from Operations: rate of 100% is equivalent to the Fund buying and selling all of the Total Revenue 0.08 0.24 0.10 N/A N/A N/A securities in its portfolio once Total Expenses (0.13) (0.26) (0.08) N/A N/A N/A in the course of the period. The Realized Gains (Losses) for the Period 0.22 1.64 0.41 N/A N/A N/A higher a fund's portfolio turnover Unrealized Gains (Losses) for the Period 1.95 (1.29) 0.53 N/A N/A N/A rate, the greater the trading costs payable by the fund in the period, Total Increase (Decrease) from Operations 2 2.12 0.33 0.96 N/A N/A N/A and the greater the chance of an investor receiving taxable capital Distributions: gains in the year. There is not From Income (excluding dividends) 0.00 0.00 N/A N/A N/A necessarily a relationship between From Dividends 0.00 0.00 N/A N/A N/A a high turnover rate and the per- formance of a fund. From Capital Gains 0.00 0.00 N/A N/A N/A 7 The Trading Expense Ratio repre- Return of Capital 0.00 0.00 N/A N/A N/A sents total commissions and other portfolio transaction costs Total Distributions 3 0.00 0.00 0.00 N/A N/A N/A expressed as an annualized per- Net Asset Value, End of Period 1 $ 12.73 $ 10.51 $ 10.04 N/A N/A N/A centage of daily average net assets during the period. RATIOS AND SUPPLEMENTAL DATA (BASED ON TRANSACTIONAL NAV) † Initial Offering Price Net Assets (000s) 4 $ 7,210 $ 2,187 $ 495 N/A N/A N/A Number of Units Outstanding 4 564,573 207,688 49,296 N/A N/A N/A Management Expense Ratio (%) 5 2.31 2.33 2.49 N/A N/A N/A Management Expense Ratio Before Waivers or Absorptions (%) 2.31 2.34 2.49 N/A N/A N/A Portfolio Turnover Rate (%) 6 2.26 11.23 8.73 N/A N/A N/A Trading Expense Ratio (%) 7 0.01 0.03 0.03 N/A N/A N/A June 30, 2008 3 2008 Semi-Annual Management Report of Fund Performance
  5. 5. TD Energy Fund F-SERIES 2008 2007 2006 2005 2004 2003 1 The net asset value per unit is shown as the Canadian GAAP NET ASSET VALUE (NAV) PER UNIT NAV per unit for all periods since Net Asset Value, Beginning of Period 1 $ 10.67 $ 10.06 $ 10.00† N/A N/A N/A January 1, 2007 and is derived from the Fund’s financial state- Increase (Decrease) from Operations: ments. The Transactional NAV Total Revenue 0.09 0.23 0.09 N/A N/A N/A per unit is shown for all periods prior to January 1, 2007. The net Total Expenses (0.06) (0.11) (0.04) N/A N/A N/A assets presented in the financial Realized Gains (Losses) for the Period 0.26 1.50 0.35 N/A N/A N/A statements may differ from the Unrealized Gains (Losses) for the Period 2.00 (1.08) 0.40 N/A N/A N/A net asset value calculated for fund pricing purposes. An explanation Total Increase (Decrease) from Operations 2 2.29 0.54 0.80 N/A N/A N/A of these differences, and a recon- ciliation between the GAAP NAV Distributions: per unit and the Transactional From Income (excluding dividends) 0.00 0.00 N/A N/A N/A NAV per unit, can be found in From Dividends 0.00 0.00 N/A N/A N/A the Fund's 2008 Semi-Annual Financial Statements in note 9 of From Capital Gains 0.00 0.00 N/A N/A N/A the notes to financial statements. Return of Capital 0.00 0.00 N/A N/A N/A 2 Net asset value and distributions are based on the actual number of Total Distributions 3 0.00 0.00 0.00 N/A N/A N/A units outstanding at the relevant Net Asset Value, End of Period 1 $ 13.01 $ 10.67 $ 10.08 N/A N/A N/A time. The increase (decrease) from operations is based on the weight- RATIOS AND SUPPLEMENTAL DATA (BASED ON TRANSACTIONAL NAV) ed average number of units out- standing over the financial period. Net Assets (000s) 4 $ 402 $ 298 $ 296 N/A N/A N/A This table is not intended to be Number of Units Outstanding 4 30,780 27,867 29,389 N/A N/A N/A a reconciliation of the net asset Management Expense Ratio (%) 5 1.05 1.06 1.33 N/A N/A N/A value per unit. 3 Distributions were paid in cash Management Expense Ratio Before or reinvested in additional units Waivers or Absorptions (%) 1.05 1.07 1.33 N/A N/A N/A of the Fund. Portfolio Turnover Rate (%) 6 2.26 11.23 8.73 N/A N/A N/A 4 This information is provided as at Trading Expense Ratio (%) 7 0.01 0.03 0.03 N/A N/A N/A June 30, 2008 and December 31 of each of the five previous years. 5 Management Expense Ratio is based on Total Expenses excluding Management Fees portfolio transaction costs for the As manager and trustee of the Fund, TDAM is responsible for the overall business and affairs stated period and is expressed as an annualized percentage of daily of the Fund including activities related to making units of the Fund available to investors, and average net assets during the period. It excludes any operating providing, or arranging for the provision of, investment advisory services and marketing services expenses waived or absorbed by to the Fund. In consideration for the provision of such services, each Series of the Fund pays TDAM, which may be discontinued at any time by TDAM at its discre- TDAM a management fee. tion without notice. 6 The Fund's Portfolio Turnover Rate Management fees are calculated and accrued as a percentage of the net asset value of each indicates how actively the Fund's Portfolio Adviser manages its series of units of the Fund, as of the close of business on each business day for each series and investments. A portfolio turnover are paid monthly to TDAM. rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once Management fees, for the six month period ended June 30, 2008, and major services rendered for in the course of the period. The higher a fund's portfolio turnover each series, as a percentage of management fees, are as follows: rate, the greater the trading costs payable by the fund in the period, Dealer and the greater the chance of an SERIES Actual Compensation Other‡ investor receiving taxable capital Investor 1.85% 47.96% 52.04% gains in the year. There is not necessarily a relationship between Advisor 2.00 >100° 0.00 a high turnover rate and the per- F 1.00 0.00 100.00 formance of a fund. 7 The Trading Expense Ratio repre- ‡ Investment advisory, marketing services and other. sents total commissions and ° TDAM’s expenses for servicing this series of the Fund exceeded the management fees of the series. other portfolio transaction costs expressed as an annualized per- centage of daily average net assets during the period. † Initial Offering Price June 30, 2008 4 2008 Semi-Annual Management Report of Fund Performance
  6. 6. TD Energy Fund Past Performance 60.0 I N V ESTO R S ER I ES (expressed as a percentage) The following charts show how the Fund has performed in 30.0 the past, and can help you understand the risks of investing in the Fund. These returns include the reinvestment of all 0.0 distributions and would be lower if an investor did not reinvest distributions. They do not include deduction of sales, switch, -30.0 redemption, or other optional charges (which dealers may charge) or income taxes payable, and these returns would -60.0 be lower if they did. The Fund’s past performance does not -50.8 21.2 45.1 3.9 9.8 25.3 32.0 55.6 4.2 5.0 21.4 necessarily indicate how it will perform in the future. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 For the 12 months ended Dec. 31 and six month period ended June 30, 2008 Year-by-year returns The bar charts show how the Fund’s performance has varied 60.0 A DV I SO R S ER I ES (expressed as a percentage) from year to year for each of the years shown. They show in percentage terms how an investment made on January 1 30.0 would have increased or decreased by December 31 for each year and for the six month period ended June 30, 2008. 0.0 -30.0 -60.0 0.4* 4.8 21.3 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 For the 12 months ended Dec. 31 and six month period ended June 30, 2008 * From September 6, 2006 to December 31, 2006 60.0 F - S ER I ES (expressed as a percentage) 30.0 0.0 -30.0 -60.0 0.8* 6.2 22.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 For the 12 months ended Dec. 31 and six month period ended June 30, 2008 * From September 6, 2006 to December 31, 2006 June 30, 2008 5 2008 Semi-Annual Management Report of Fund Performance
  7. 7. TD Energy Fund Summary of Investment Portfolio Top 25 Investments as at June 30, 2008 % of Net Assets† as at June 30, 2008 % of Net Assets† PORTFOLIO DETAILS 1. EnCana Corporation 10.2 Canadian Equities 62.5 2. Suncor Energy Inc. 8.8 U.S. Equities 20.4 3. Talisman Energy Inc. 6.1 Income Trusts 12.6 4. Petro-Canada 6.0 International Equities 2.6 5. Husky Energy Inc. 5.3 Cash & Cash Equivalents 1.9 6. Marathon Oil Corporation 3.4 7. Crescent Point Energy Trust 3.2 EQUITY SECTOR ALLOCATION 8. Penn West Energy Trust 3.1 Energy 96.8 9. Helmerich & Payne Inc. 3.1 Materials 0.9 10. Nexen Inc. 2.8 Utilities 0.4 11. Chevron Corporation 2.7 12. Schlumberger Limited 2.5 13. Weatherford International Ltd. 2.1 TOTAL NET ASSETS $ 310,912,370 14. UTS Energy Corporation 2.0 15. Comstock Resources Inc. 1.9 16. Cash & Cash Equivalents 1.9 17. Bonavista Energy Trust 1.8 18. Bow Valley Energy Ltd. 1.8 19. Progress Energy Trust 1.6 20. Pacific Rubiales Energy Corp. 1.5 21. Vermilion Energy Trust 1.5 22. Lundin Petroleum AB 1.4 23. ProEx Energy Ltd. 1.3 24. Calfrac Well Services Ltd. 1.3 25. Devon Energy Corporation 1.2 Total % of Net Assets represented by these holdings† 78.5 † Based on last traded market prices for securities and Transactional Net Asset Value as at June 30, 2008. This information is accurate as at the date indicated and may change because of ongoing portfolio transactions of the Fund. You may obtain more current information by contacting TD Mutual Funds at 1-800-386-3757, by writing to us at TD Asset Management Inc., TD Canada Trust Tower, 35th Floor, 161 Bay Street, Toronto, Ontario, M5J 2T2, or by email to td.mutualfunds@td.com. June 30, 2008 6 2008 Semi-Annual Management Report of Fund Performance
  8. 8. 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 statements about the Fund, including 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 contribute 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, technological change, changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events. We stress that the above mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing any undue reliance on forward- looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward- looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance. TD Mutual Funds are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank. All trade-marks are the property of their respective owners. TD Mutual Funds is a trade-mark of The Toronto-Dominion Bank, used under license. June 30, 2008 7 2008 Semi-Annual Management Report of Fund Performance

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