TD Greystone Target Duration Funds Investment Policy Updates

Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below. They are established as a segregated fund under the Insurance Companies Act (Canada).

Plan sponsors don’t need to take any immediate action as a result of this update.

TD Asset Management (TDAM) recently made changes to the Offering Memorandum (OM) and Statement of Investment Policies and Procedures (SIP&P) for the TD Greystone 3 Year Target Duration, 8 Year Target Duration, and 15 Year Target Duration funds (the Funds). TDAM stated that the updated policies were revised to allow for a higher running yield and to align with the shifting provincial and corporate solvency mix in the Canadian marketplace (10% provincial/90% corporate).

The outlined changes detail adjustments to the risk controls for the Funds:

• Sector Weights: The changes decrease the minimum exposure to government bonds from 50% to 40%, while increasing the maximum limit for corporate bonds from 50% to 60%.
• Credit Quality Risk Constraints: The update increases the maximum allowable weighting for "BBB" rated bonds to 30%, up from the previous 20% limit.

About the TD Greystone Target Duration Funds

The Funds invest in a diversified portfolio of Canadian fixed income securities. The Funds seek to maintain a modified duration of three, eight, and fifteen years respectively. Each is subject to a tolerance range of +/-0.25 of a year around its target.

Sun Life GRS Investment Solutions team view

We have no concerns with the changes.