TD Comfort Portfolios

You can choose funds that invest in money market investments such as government issued treasury bills, income investments such as bonds, or equity investments such as stocks of corporations, both domestic and international.

Some funds are broadly diversified, while others target an asset class or a specific sector of the economy, such as international bonds or science and technology stocks. Others aim to replicate the performance of a well-known index, such as the S&P/TSX Composite Index in Canada or Standard & Poor's (S&P) 500 in the United States.

While there are hundreds of choices, each mutual fund will fall into one of the three main asset classes: safety, income or growth. Or, you can choose a balanced fund which is actively managed to maintain a mix of all three asset classes.

The minimum initial investment for TD Mutual Funds is $100 for a non-registered account and $100 for an RSP account. The minimum subsequent investment is $100 for both types of accounts.

A TD Mutual Funds Pre-Authorized Purchase Plan, a convenient and affordable way to build your savings. You can start with as little as $25 per fund per transaction and this amount can be automatically deducted from your bank account on a weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annual, or annual basis.

Transfers between TD Mutual Funds are free, however, a 2% early redemption fee is payable to all funds except money market funds if you transfer or sell units of these funds within 30 days (90 days for TD e-Series) of purchase. This fee is designed to protect unitholders from the costs associated with other investors moving quickly in and out of the funds.

Frequent trading can hurt a fund's performance by forcing the portfolio manager to keep more cash in the fund than would otherwise be needed or to sell investments at an inappropriate time. It may also increase a fund's transaction costs.

Mutual funds are sold through registered Mutual Funds Representatives or other registered advisors with mutual fund or securities dealers associated with banks, trust companies and insurance companies in Canada.

At TD, you can purchase TD Mutual Funds TD Investment Services Inc. by contacting a Mutual Funds Representative through EasyLine telephone services, EasyWeb Interest access or by visiting any TD Canada Trust branch. You can also purchase TD Mutual Funds through TD Direct Investing and TD Wealth.

Net income and net realized capital gains earned by a mutual fund are generally passed on to investors in the form of distributions. The frequency of distributions will vary depending on the mutual fund but will generally be monthly, quarterly or annually.

You can also earn a capital gain when you sell your mutual fund or switch from one mutual fund to another at a price higher than you paid.

The tax treatment of distributions received or capital gains realized will depend upon the type of account in which you hold the investment.

If you hold a mutual fund in a Registered Plan (such as RSP, RIF, RESP or TFSA) distributions paid by a mutual fund and any capital gains realized are generally sheltered from tax. Any amount you withdraw from a Registered Plan (excluding TFSA) is generally fully taxable. Amounts withdrawn from a TFSA are not taxable.

If you hold a mutual fund in a non-registered account, distributions paid by the mutual fund are taxable whether they are received in cash or reinvested into the mutual fund. You will receive a T3 Supplementary/Relevé 16 tax slip which will tell you the amount and type of income to report on your tax return. You must also include in your taxable income any capital gains realized from selling or switching your mutual fund. It's up to you to calculate and report the capital gains you realize on your transactions. Although an official tax slip is not required, mutual fund companies are required to report all sales or switches to Canada Revenue Agency.

Book value is the original cost of purchases and reinvested distributions minus the average cost of any redemptions. Average cost per unit is used to calculate any capital gains or losses you may earn when you sell or transfer units of a fund you hold in a non-registered account. The average cost per unit is the book value of your fund divided by the number of units you hold.

Technically speaking, there's a difference between a global fund and an international fund, from a North American perspective. A global fund may invest in all the markets of the world, including North America, whereas an international fund generally excludes North America.

While past performance does not guarantee future growth, annualized returns (e.g. 1-year, 3-year, 5-year) are often used to compare funds and the quality of their management. Most major daily newspapers publish mutual funds performance tables each month for periods ranging from one month to 10 years or more.

Comparing a fund with others in its peer group is a good way to evaluate past performance. Mutual fund tables make it easy by grouping similar funds together. The ability to consistently outperform its peers is one sign of a good-quality fund.

To make a fair comparison, it is important to recognize that all funds in one category are not the same. For example, some Canadian equity funds are managed conservatively, while others aggressively pursue growth. One fund manager may emphasize longer-term value, while another may actively trade positions at different times in the market cycle. If in doubt, find out from the fund company or the prospectus what the fund's investment objectives are and how the fund is managed. While some performance numbers can be very attractive, you may discover that the fund's investments are too risky for you.

While market timing is not illegal, our funds are designed for long-term mutual fund investors. TDAM started to charge an early redemption fee (ERF) for most TD Mutual Funds many years ago. This 2% fee is applied to investors that buy and sell units of the same fund within 30 or 90 days, thus discouraging for market timing. The amount charged by this process is paid to the fund to cover any costs or possible negative impact to the fund or its unitholders. In addition, we also retain the right to reject purchase orders from a unitholder who is conducting any activity considered detrimental to the funds or its unitholders.

At TD Mutual Funds we are committed to protecting the best interests of our unitholders. We strive to apply the highest standard of care and diligence, and we review our current policies and practices regularly to ensure they continue