What are TD mutual funds?

A mutual fund is a type of investment tool where the capital or money is gathered from different investors, which is then pooled together to invest in different assets like stocks, bonds, and other money market investments.

This investment vehicle is professionally managed by fund managers, who are responsible for allocating the assets and potentially producing returns or profits for investors. Self-directed investors choose mutual funds as one of their investment strategies because they can be diverse in different assets.

In this article, we’ll focus on Toronto Dominion mutual funds, or TD mutual funds. We’ll go over what they are, how they work, what are the benefits, and which is the best-performing TD mutual funds.

We hope that this article widens your investment options, empowering you with more choices in defining your financial future.

Who is TD?

Toronto Dominion or TD for short is one of the top 10 North American banks. The company also has a vision to be the better bank that will stand out from its peers by having a unique brand which makes them a premier Canadian retail bank.

What are TD mutual funds?

TD mutual funds are investment vehicles that are professionally managed. They have diverse, pre-selected securities, and several solutions to choose from.

How do TD mutual funds work?

As mentioned above, TD offers various kinds of mutual funds that are designed to help any investor.

But how do mutual funds TD work? Watch this video for a short overview:

How do mutual funds distributions work? These can be done in the form of interest income, capital gains, or other sources of income also known as taxable dividends.

Since mutual funds are invested in a wide range of different assets, the income can be earned from the dividends of stocks and interest on bonds held in the investment portfolio.

Typically, a portion of the income generated in the mutual fund is paid out to the fund owners or investors over the year of investment.

In addition, if the fund sells securities and it has increased in price, most of it will pass on these gains to other investors in the form of distribution.

Lastly, if Net Asset Value (NAV) of the funds increases but is not sold by the fund manager, the fund's unit is more likely to increase in price. This could be a reason for investors to sell their mutual funds units to generate profits from the market.

It is a normal scenario that distributions are taxable to the investor whether the distributions are paid out in cash or reinvested back into the mutual fund.

So, how are these distributions calculated? The distributions are shared out to the unit holders according to the proportion of the numbers they hold on to a specific date or also known as the “record date”.

Meanwhile, the number of times at which the distributions will be paid may vary depending on the fund an investor has chosen. However, it can be paid monthly, quarterly, or annually.

Benefits of TD Mutual Funds

You were able to read and learn what mutual funds TD are and how they work. But the main question to consider here is why do people invest in it?

There are several reasons why an investor would invest in a mutual fund.

First, it only requires a small initial minimum investment amount.

Second, the amount invested is traded once a day during their closing Net Asset Value (NAV), which allows the fund to be more accessible to its investors.

The third advantage of a mutual fund is that it has a dedicated team of professionals working and managing the fund.

For actively-managed funds, fund managers take advantage of the market opportunities and other strategies to carefully determine which bond, stock and other money securities are the best to buy and sell.

The deep understanding of fund managers on how the mutual fund economy works leads to achieving the best of the mutual fund.

Finally, since mutual funds are invested in several securities, these gives them a sense of diversification. These are a few of the reasons why investors are choosing mutual funds.

With all the benefits of mutual funds, you can be assured that the risk of investing in a single security is reduced. You are not throwing all your hard-earned finances into a single basket.

But what about TD mutual funds, how could you benefit from them? Here is what you can expect:

• Personalized advice: The mutual fund TD representative can recommend TD mutual funds that are certainly connected in meeting your financial goals and may provide advice that will be helpful on your investment journey.
• Professionally managed: TD portfolio managers that will work on your investment have an average of 20+ years of working experience which gives you the guarantee of meeting your investment goals.
• Convenient investing: Mutual funds TD comes in low investment minimums, options to bank with the platform or channel you want, and automatic reinvestment of income earned in the fund.
• Diversification: Investments in mutual funds TD are diversified, so it can create a balanced portfolio that is suitable to your personal investment preference, strategy, and goal.

What types of TD mutual funds can I purchase?

Even though there are many mutual funds to choose from, each of them falls into three main asset categories: growth, safety, or income.

These three asset classes can be merged together for you to have a balanced actively managed fund.

You can also choose a mutual fund that can invest in other money market investments like income investments from bonds, treasury bills, or equity investments such as stocks of a large company whether domestic, international or both.

Although mutual funds are broadly diversified, the other assets target the class or specific economic sector such as science and technology stocks or international bonds.

Meanwhile, other funds aim to replicate the performance of other well-known indexes such as the S&P/TSX Composite Index in Canada.

Picking the best mutual fund for your investment can be overwhelming, especially since there’s a number of funds that you can choose from.

In mutual funds TD, here are the funds that you can purchase:

1. TD comfort funds: This is designed as a one-stop solution to fully maximize potential returns and manage volatility to ensure confidence in investment.
2. TD retirement funds: This type of fund is professionally managed and offered to prepare for and support the life you want after retirement.
3. Money market funds: Money market funds are designed to cater short term capital liquidity and protection while still earning a high rate of interest income in Canadian and US dollars.
4. Fixed income funds: High levels of interest income are generated in these funds which are professionally managed by mutual funds TD managers.
5. Balanced funds: Balanced funds are known for their provision of income and long-term capital growth that are given in Canadian and US currencies that are also professionally managed at TD.
6. Growth funds: If you are looking for an after-tax income and steady growth, this type of mutual fund might be good for you.

What are the best performing TD mutual funds?

The list of mutual funds offered by TD can be overwhelming, but what is the best performing among them?

Discover D-series mutual funds have the concept of a low-cost solution. This low-cost fund helps investors put more money towards the investments.

This type of mutual fund is also created to offer discounted access to professional money management as well as a low-fee access to various classes of assets, industry sectors and geographic regions.

Here are key highlights of D-series mutual funds:

• Lower management fees: many D-series funds have an equal and corresponding A series that are completely similar in nature designed to cater the self-directed investors for a lower fee.
• No switching costs: when transferring or switching from A series to another series that is equivalent to D-series of the same funds, there are no charges and fees.
• Broad selection of funds: in this type of fund, you can invest in a variety of industry sectors and asset classes.

Where can I buy TD Mutual Funds?

Purchasing TD mutual funds is easy – just go to any TD Canada Trust branch or call Easyline Telephone Banking.

If you are an existing mutual funds TD account holder, you can buy additional units of mutual funds TD through the TD app or Easyweb.

If that option does not work for you, visit TD Direct Investing and TD Wealth businesses to purchase funds. TD Direct investing will only offer mutual funds without trailer fees for purchases which took effect on June 01, 2022.

Before you purchase any of the funds, you must be equipped with an understanding of fees and charges that will come with it which could impact on your returns.

Are TD mutual funds good?

Investing in mutual funds will depend on where you are on your financial journey, how much money and time you have, and other factors.

The great thing about mutual funds is that they can allow you to get into the market without the need to pick specific stocks and pay several transaction fees.

TD Investment Service Inc. or TDIS offers a wide range of mutual fund categories that you can choose from. But with all the information and benefits that a certain type of fund can give, you may feel overwhelmed. With the help of TDIS mutual fund representative, you can have the guidance you need to identify the mutual fund that suits your strategy, risk tolerance, and goals.

Stay informed and be proactive in investing for your future. Read and bookmark our Best in Wealth section for the latest news on the best wealth advisors in Canada.

See the full list of winners for the Best Wealth Managers & Advisors in Eastern Canada in 5 Star Advisors 2023 special report.

Are you interested in investing in TD mutual funds? Share your thoughts in the comments below: