TD Dow Jones Industrial Average Index Fund

TD Dow Jones Industrial Average Index Fund

525518 (03/19)

TD Mutual Funds Annual Management Report of Fund Performance

for the period ended December 31, 2018

This Annual Management Report of Fund Performance contains financial highlights, but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, at no cost, by calling 1-800-386-3757, by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8, by e-mail to td.mutualfunds@, or by visiting our website at or the SEDAR website at Securityholders may also contact us or visit our website to get a copy of the investment fund's interim financial report, proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure at no cost.

nTD Dow Jones Industrial Average Index Fund

Management Discussion of Fund Performance

Investment Objectives and Strategies The investment objective of TD Dow Jones Industrial Average Index Fund (the "Fund") is to seek to provide long-term capital appreciation similar to the performance of the Dow Jones Industrial Average Total Return Index (US$) ("DJIA TR Index"), which is comprised of 30 U.S. blue-chip companies. In seeking to achieve this objective, each security in the DJIA TR Index is held by the Fund in close tolerance to its index weight so that the performance of the Fund closely tracks the performance of the DJIA TR Index.

Risk The risks of investing in the Fund remain as outlined in the simplified prospectus.

Results of Operations The Investor Series units of the Fund returned -4.6% for the year ended December 31, 2018 ("Reporting Period"). This compares to a return of -3.5% for the Fund's product benchmark and general market index, DJIA TR Index. Returns for other series of the Fund may vary, largely due to differences in fees and expenses. Unlike the benchmark and general market index, the Fund's return is quoted after the deduction of fees and expenses. Refer to the Past Performance section for returns of various series of the Fund.

Market Update The U.S. economy experienced robust economic growth throughout the Reporting Period and benefited from sustained consumer and government spending. Guided primarily by a strong economy and labour market, the U.S. Federal Reserve Board ("Fed") raised its benchmark interest rate four times during the Reporting Period, ending the year with a target range of 2.25% to 2.50%. The U.S. inflation rate fell in November as a result of a decrease in oil prices, but it remained firmly above the Fed's 2.0% target throughout the Reporting Period. The U.S. labour market demonstrated steady growth as the unemployment rate started out the Reporting Period at 4.1% in January and ended at 3.9% in December. Second-quarter gross domestic product ("GDP") grew to its best annual rate in four years and continued at a solid pace in the third quarter, buoyed in part by strong consumer spending.

U.S. equities fell in value over the Reporting Period, as seven of the 11 sectors posted negative returns. Energy, materials and industrials were the weakest-performing sectors, while health care, utilities and real estate were the strongest-performing sectors.

The energy sector fell in response to an increase in supply and growing concerns about a slowdown in global demand for oil, which pushed oil prices lower in the second half of the Reporting Period. Slowing demand from China and reduced margins as a result of higher wage costs drove the materials sector lower. The industrials sector was negatively impacted by the ongoing trade dispute between the U.S. and China.

Key Contributors/Detractors The Fund continues to be managed with the objective of seeking to track the performance of its benchmark. The Fund's returns are influenced by the same factors that affect the U.S. equity market. The difference in performance is a result of the actual withholding taxes, unitholder activity, transaction costs, fees and expenses experienced by the Fund, which are not included in the performance of the benchmark.

Recent Developments Looking ahead, the Portfolio Adviser continues to monitor a variety of macroeconomic factors that could influence the performance of financial markets. The Portfolio Adviser expects North American central banks to continue raising interest rates to more neutral levels to restrain inflationary pressure building in the global economy, while the European Central Bank begins curtailing its accommodative bond-buying program. Despite this tightening of monetary conditions, the Portfolio Adviser expects the relatively low interest rate environment to continue through 2019.

Going into 2019, in the Portfolio Adviser's view, global economic growth appears to be slowing. This slowdown in economic activity and the removal of monetary stimulus measures by central banks have resulted in heightened financial market volatility. While solid corporate fundamentals and valuations tend to support equity price gains, rising inflation, higher interest rates and trade tensions could lead to greater volatility in financial markets over the coming year.

Related Party Transactions Affiliates of TD Asset Management Inc. ("TDAM") may earn fees and spreads in connection with various services provided to, or transactions with, the Fund, such as in connection with banking, custody, brokerage and derivatives transactions.

Manager, Trustee and Portfolio Adviser: TDAM, a wholly-owned subsidiary of The Toronto-Dominion Bank ("TD"), is the manager, trustee and portfolio adviser of the Fund. The Fund pays TDAM an annual management fee, which may vary for each series of Fund units.

Distributor: For certain series of units of the Fund, TD Investment Services Inc., a wholly-owned subsidiary of TD, is the principal distributor for which it is paid a trailer commission by TDAM. Units of the Fund are also distributed through brokers and dealers including TD Waterhouse Canada Inc. ("TDWCI"), a wholly-owned subsidiary of TD. TDWCI, like other dealers, is paid a trailer commission by TDAM for distributing certain series of units of the Fund. Trailer commissions are paid by TDAM out of the management fees it receives from the Fund and are based on the average value of assets held by each dealer.

December 31, 2018

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Annual Management Report of Fund Performance

TD Dow Jones Industrial Average Index Fund

Registrar and Transfer Agent: TD is the registrar and transfer agent of the Fund, and as such maintains all unitholder records, processes purchase, switch, conversion and redemption orders, issues investor statements and prepares annual tax reporting information on behalf of the Fund.

TD earns a foreign exchange spread when unitholders switch between units of funds denominated in different currencies. The Fund also maintains bank accounts and overdraft provisions with TD for which TD earns a fee.

Buying and Selling Securities: TDAM has established an independent review committee ("IRC") which acts as an impartial and independent committee to review and provide recommendations or, if appropriate, approvals respecting any conflict of interest matters referred to it by TDAM. The IRC prepares, at least annually, a report of its activities for securityholders of the Fund. The report is available on the TDAM website at or at the securityholder's request at no cost by contacting TDAM (see front cover).

The Fund relied on standing instructions from the IRC in respect of one or more of the following transactions: (a) trades in securities of TD or any affiliate or associate thereof; (b) investments in the securities of an issuer where TD Securities Inc.,

TDWCI, or any other affiliate of TDAM (a "Related Dealer") acted as an underwriter during the distribution of such securities and the 60-day period following the completion of the distribution of the underwritten securities; (c) purchases or sales of securities of an issuer from or to another investment fund or discretionary managed account managed by TDAM; and (d) purchases of securities from or sales of securities to a Related Dealer, where it acted as principal.

The relevant standing instructions require that securities transactions with related parties conducted by TDAM (i) are free from any influence by an entity related to TDAM and without taking into account any consideration relevant to an entity related to TDAM; (ii) represent the business judgment of TDAM uninfluenced by considerations other than the best interests of the Fund; (iii) comply with the applicable policies and procedures of TDAM; and (iv) achieve a fair and reasonable result for the Fund.

Brokerage Arrangements (000s): From time to time, the Fund may enter into portfolio securities transactions with Related Dealers who may earn commissions or spreads provided that such trades are made on terms and conditions that are comparable to non-affiliated brokerages. During the Reporting Period, the Fund paid commissions to related parties amounting to US$4 or 66.67% of total commissions paid by the Fund for portfolio transactions in total.

December 31, 2018

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Annual Management Report of Fund Performance

TD Dow Jones Industrial Average Index Fund

Financial Highlights

The following tables show selected key financial information about the Fund and are intended to help you understand the Fund's financial performance for the past five fiscal years, as applicable.

Net Assets per Unit ($)1

Net Assets, Beginning of Year

Increase (Decrease) from Operations: Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period

Total Increase (Decrease) from Operations 2

Distributions: From Net Investment Income

(excluding dividends) From Dividends From Capital Gains Return of Capital

Total Annual Distributions 3

Net Assets at December 31

INVESTOR SERIES (US$)

2018

2017

15.75

12.57

0.36 (0.20) 0.23 (1.14)

(0.75)

0.33 (0.17) 0.06 3.10

3.32

2016 11.08

0.31 (0.15) 0.07 1.40 1.63

2015 11.34

0.28 (0.14) 0.32 (0.59) (0.13)

2014 10.56

e-SERIES (US$)

2018

2017

16.55

13.20

0.24 (0.13) 0.06 0.74

0.91

0.38 (0.11) 0.24 (1.25)

(0.74)

0.35 (0.10) 0.07 3.29

3.61

2016 11.61

0.32 (0.09) 0.08 1.52 1.83

2015 11.87

0.30 (0.08) 0.33 (0.61) (0.06)

2014 11.01

0.26 (0.08) 0.07 0.82 1.07

(0.15) 0.00 0.00 0.00

(0.15)

14.87

(0.16) 0.00 0.00 0.00

(0.16)

15.75

(0.16) 0.00 0.00 0.00

(0.16)

12.57

(0.14) 0.00 0.00 0.00

(0.14)

11.08

(0.13) 0.00 0.00 0.00

(0.13)

11.34

(0.25) 0.00 0.00 0.00

(0.25)

15.63

(0.24) 0.00 0.00 0.00

(0.24)

16.55

(0.23) 0.00 0.00 0.00

(0.23)

13.20

(0.20) 0.00 0.00 0.00

(0.20)

11.61

(0.16) 0.00 0.00 0.00

(0.16)

11.87

Net Assets, Beginning of Year

Increase (Decrease) from Operations: Total Revenue Total Expenses (excluding distributions) Realized Gains (Losses) for the Period Unrealized Gains (Losses) for the Period

Total Increase (Decrease) from Operations 2

Distributions: From Net Investment Income

(excluding dividends) From Dividends From Capital Gains Return of Capital

Total Annual Distributions 3

Net Assets at December 31

F-SERIES (C$) 2018 16.19

2017 13.79

0.39 (0.16) 0.24 (1.76)

(1.29)

0.36 (0.14) 0.07 3.36

3.65

2016 12.54

0.33 (0.12) 0.08 1.57 1.86

2015 10.69

0.30 (0.11) 0.33 (0.60) (0.08)

2014 9.12

0.22 (0.09) 0.05 0.69 0.87

(0.17) 0.00 0.00 0.00

(0.17)

16.66

(0.20) 0.00 0.00 0.00

(0.20)

16.19

(0.19) 0.00 0.00 0.00

(0.19)

13.79

(0.18) 0.00 0.00 0.00

(0.18)

12.54

(0.14) 0.00 0.00 0.00

(0.14)

10.69

1 This information is derived from the Fund's audited annual financial statements prepared in accordance with International Financial Reporting Standards. The Fund measures fair value of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the net asset value ("NAV") for transactions with unitholders.

2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial periods. These tables are not intended to be a reconciliation of the net assets per unit.

3 Distributions were paid in cash or reinvested in additional units of the Fund, or both.

December 31, 2018

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Annual Management Report of Fund Performance

TD Dow Jones Industrial Average Index Fund

Ratios and Supplemental Data

Total Net Asset Value ($000s) 1 Number of Units Outstanding (000s) 1 Management Expense Ratio (%) 2 Management Expense Ratio Before

Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit ($)

INVESTOR SERIES (US$)

2018

2017

87,246 5,866 0.89

90,381 5,738 0.89

0.89 0.00 12.30 14.87

0.89 0.00 7.22 15.75

2016

66,387 5,280 0.89

0.89 0.00 8.38 12.57

2015

60,997 5,505 0.89

0.89 0.00 22.86 11.08

2014

62,487 5,509 0.89

0.89 0.00 14.18 11.34

e-SERIES (US$)

2018

2017

123,392 7,894 0.33

120,214 7,264 0.33

0.33 0.00 12.30 15.63

0.33 0.00 7.22 16.55

2016

85,103 6,449 0.33

0.33 0.00 8.38 13.20

2015

70,183 6,046 0.33

0.33 0.00 22.86 11.61

F-SERIES (C$)

2018

2017

2016

2015

2014

Total Net Asset Value ($000s) 1 Number of Units Outstanding (000s) 1 Management Expense Ratio (%) 2 Management Expense Ratio Before

Waivers or Absorptions (%) Trading Expense Ratio (%) 3 Portfolio Turnover Rate (%) 4 Net Asset Value per Unit ($)

13,261 818 0.56

0.56 0.00 12.30 16.66

10,510 649 0.57

0.57 0.00 7.22 16.19

6,747 489 0.57

0.57 0.00 8.38 13.79

4,809 384 0.56

0.57 0.00 22.86 12.54

3,582 335 0.57

0.57 0.00 14.18 10.69

1 This information is provided as at December 31 of the past five fiscal years, as applicable. 2 Management expense ratio ("MER") is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) net of any waivers or absorp-

tions for the stated period, including the Fund's proportionate share of the MER, if any, of the underlying fund(s) in which the Fund has invested in, and is expressed as an annualized percentage of daily average NAV during the period. Any waivers or absorptions may be discontinued at any time by TDAM at its discretion without notice. 3 The trading expense ratio ("TER") represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average NAV during the stated period. Where a Fund invests in units of any underlying fund, the TER presented for the Fund includes the portion of TERs, if available, of the underlying fund(s) attributable to this investment. 4 The Fund's portfolio turnover rate ("PTR") indicates how actively the Fund's portfolio adviser manages its investments. A PTR of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the stated period. The higher a fund's PTR, the greater the trading costs payable, directly or indirectly, by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the fiscal year. There is not necessarily a relationship between a high turnover rate and the performance of a fund.

2014

64,575 5,439 0.33

0.33 0.00 14.18 11.87

Management Fees As manager and trustee of the Fund, TDAM is responsible for the overall business and affairs of the Fund, including activities related to making units of the Fund available to investors, and providing, or arranging for the provision of, investment advisory services and marketing services to the Fund. In consideration for the provision of such services, each series of the Fund pays TDAM a management fee.

Management fees are calculated and accrued as a percentage of the net asset value of each series of units of the Fund, as of the close of business on each business day for each series and are paid monthly to TDAM.

The simplified prospectus discloses a specified annual management fee rate that TDAM can charge for each series of the Fund. Where TDAM chooses to charge a management fee rate below the specified annual management fee rate, the difference represents a waiver of management fees. TDAM may waive all or a portion of the management fees being charged to the Fund, which may be discontinued at any time by TDAM at its discretion without notice to unitholders.

The annual management fees and a breakdown of the major services rendered for each series, as a percentage of the management fees paid, are as follows:

(expressed as a %)

Investor Series e-Series F-Series

Investment advisory, trustee, marketing services and other.

Annual Mgmt. Fees

0.80 0.30 0.50

Dealer Compensation

17.92 28.13

0.00

Waived Operating Expenses

0.01 0.02 0.01

Other

82.07 71.85 99.99

December 31, 2018

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Annual Management Report of Fund Performance

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