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TD Asset Management Inc. (TDAM) has proposed paying certain operating expenses in return for an administration fee payable by the following funds:

  • TD Emerald Canadian Treasury Management Fund,
  • TD Emerald Canadian Treasury Management – Government of Canada Fund,
  • TD Emerald Canadian Short-Term Investment Fund,
  • TD Emerald Canadian Bond Index Fund,
  • TD Emerald Balanced Fund,
  • TD Emerald Canadian Equity Index Fund,
  • TD Emerald U.S. Market Index Fund and
  • TD Emerald International Equity Index Fund.

Subject to providing prior written notice to investors or obtaining investor approval, as further described below, administration fees will be implemented on or about January 1, 2018.

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Currently, each fund pays all of its operating expenses. If the administration fees are implemented, TDAM will pay some of the operating expenses, including legal fees; auditing, tax and accounting fees; custodian charges; portfolio valuation costs; and insurance costs, among other expenses.

Administration fee rates will be based on each fund’s net asset value. Administration fees will be calculated and accrued daily and paid monthly.

This type of administration fee arrangement is “fairly common in the mutual fund industry,” a TDAM spokesperson told Advisor.ca via email. “We do not expect any material change to the MERs of the affected funds as a result of the change.”

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Prior written notice

TDAM will send unitholders of TD Emerald Canadian Treasury Management Fund and TD Emerald Canadian Treasury Management – Government of Canada Fund a written notice providing the details of the applicable administration fee at least 60 days prior to January 1, 2018, as required by securities legislation. The annual administration fee rates for each of these funds will be as follows.

 Fund Tier 1 Tier 2 Tier 3
First $250,000,000 Next $250,000,000 Over $500,000,000
TD Emerald Canadian Treasury Management Fund 0.03% 0.02% 0.01%
TD Emerald Canadian Treasury Management — Government of Canada Fund 0.03% 0.02% 0.01%

 

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Investor approval

The approval of unitholders of the funds in the below table is required for TDAM to implement the administration fee for the respective funds. Unitholders of record on or about October 4, 2017, will receive the applicable meeting materials in October 2017. Meetings for these unitholders will be held on or about November 14, 2017. Proposed annual administration fee rates for each of these funds will be as follows.

 Fund Tier 1 Tier 2 Tier 3
First $250,000,000 Next $250,000,000 Over $500,000,000
TD Emerald Canadian Short-Term Investment Fund 0.03% 0.02% 0.01%
First $200,000,000 Next $300,000,000 Over $500,000,000
TD Emerald Canadian Bond Index Fund 0.03% 0.02% 0.01%
First $70,000,000 Next $300,000,000 Over $370,000,000
TD Emerald Balanced Fund 0.03% 0.02% 0.01%
First $200,000,000 Next $400,000,000 Over $600,000,000
TD Emerald Canadian Equity Index Fund 0.03% 0.02% 0.01%
First $300,000,000 Next $400,000,000 Over $700,000,000
TD Emerald U.S. Market Index Fund 0.03% 0.02% 0.01%
First $1,100,000,000 Next $1,250,000,000 Over $2,350,000,000
TD Emerald International Equity Index Fund 0.03% 0.02% 0.01%

 

Also read:

TD makes fund changes

Originally published on Advisor.ca
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