TD Asset Management (TDAM), a subsidiary of Toronto-Dominion Bank, has announced a shake-up of its ETF stable including new fund names, new underlying indices, and lower management fees.
TD Asset Management is a subsidiary of Toronto-Dominion Bank.
All changes will be effective around 20 November 2018.
Index changes
TDAM is changing the underlying indices for each of its six ETFs. Following the switch, the ETFs will cease tracking indices provided by S&P Opco, a subsidiary of S&P Dow Jones Indices, in favour of indices provided by Solactive.
According to TDAM, while the new indices may result in slight changes to the funds’ underlying holdings, the investment objectives of each ETF will remain the same and the funds will maintain similar exposure across asset classes, sectors and geographic regions.
There will be no changes to the distribution policy or risk rating of each TD ETF.
The TD Canadian Aggregate Bond Index ETF (TDB CN) will switch from the S&P Canada Aggregate Bond Index to the Solactive Canadian Select Universe Bond Index. The fund provides exposure to Canadian dollar-denominated investment-grade debt including government, quasi-government, corporate, securitized and collateralized securities.
The TD S&P/TSX Capped Composite Index ETF (TTP CN) will switch from the S&P/TSX Capped Composite Index to the Solactive Canada Broad Market Index. TTP covers approximately 95% of the Canadian equities market and is weighted by free float market cap.
The TD S&P 500 Index ETF (TPU CN) will switch from the S&P 500 Index to the Solactive US Large Cap CAD Index. The new Solactive index consists of the 500 largest companies listed in the US and is thus broadly similar to the bellwether S&P 500; however, constituent selection for the S&P 500 is actually committee-driven and designed to capture the performance of 500 “leading companies” in the US.
The TD S&P 500 CAD Hedged Index ETF (THU CN) will switch from the S&P 500 CAD Hedged Index to the Solactive US Large Cap Hedged to CAD Index. This index is identical to the above Solactive US Large Cap CAD Index but returns are hedged back to Canadian dollars.
The TD International Equity Index ETF (TPE CN) will switch from the S&P EPAC Ex-Korea LargeMidCap Index to the Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index. Both indices provide broad market exposure to equities listed in developed countries excluding Canada and the US.
The TD International Equity CAD Hedged Index ETF (THE CN) will switch from the S&P EPAC Ex-Korea LargeMidCap CAD Hedged Index to the Solactive GBS Developed Markets ex North America Large & Mid Cap Hedged to CAD Index. The fund provides currency-hedged exposure to the above international developed equity index.
Name changes
As a result of the change in underlying indices, the names of three TD ETFs will also change. The fund’s ticker codes will remain the same.
The TD S&P/TSX Capped Composite Index ETF will become the TD Canadian Equity Index ETF.
The TD S&P 500 Index ETF will become the TD US Equity Index ETF.
The TD S&P 500 CAD Hedged Index ETF will become the TD US Equity CAD Hedged Index ETF.
Lower management fees
TDAM will lower the management fees on select TD ETFs as set out below:
TD Canadian Aggregate Bond Index ETF; from 0.10% to 0.08%.
TD S&P/TSX Capped Composite Index ETF; from 0.07% to 0.05%.
TD S&P 500 Index ETF; from 0.10% to 0.08%.
TD S&P 500 CAD Hedged Index ETF; from 0.10% to 0.08%.