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Where Convenience Meets Investment Experience
Simplify how you manage your fixed income portfolio with the TD Target Maturity Bond Exchange-Traded Funds (TD TMB ETFs). The TD TMB ETFs offer the benefits of a traditional bond fund like diversification and regular income with the added benefits that come with an ETF like liquidity and transparency. TD TMB ETFs buy and hold bonds to a set maturity date, which can help reduce short-term volatility and provide greater clarity of the cash flows over the defined term and the principal repayment value at maturity.
How They Work
The TD TMB ETFs invest in a portfolio of investment-grade corporate bonds which are hand-picked by the Fixed Income Investment Team at TD Asset Management Inc. (TDAM), offering increased diversification and the chance to generate higher yields when compared to other fixed income products. Each ETF matures in successive years from 2025 to 2027 and is offered in both Canadian and U.S. dollar versions. The suite includes the six following ETFs:
CAD
Each of the TD Target Maturity Canadian Bond ETFs seek to provide regular income and preserve capital by investing primarily in a portfolio of investment-grade Canadian corporate bonds denominated in Canadian dollars, each maturing in the Maturity Year of the respective ETF.
USD
Each of the TD Target Maturity U.S.Bond ETFs seek to provide regular income and preserve capital by investing primarily in a portfolio of investment-grade U.S. corporate bonds denominated in Canadian dollars, each maturing in the Maturity Year of the respective ETF.
Key Facts
|
TD Target 2025 Investment Grade Bond ETF |
TD Target 2026 Investment Grade Bond ETF |
TD Target 2027 Investment Grade Bond ETF |
TD Target 2025 U.S. Investment Grade Bond ETF |
TD Target 2026 U.S. Investment Grade Bond ETF |
TD Target 2027 U.S. Investment Grade Bond ETF |
|
|---|---|---|---|---|---|---|
|
TSX Tickers |
TBCE |
TBCF |
TBCG |
TBUE.U |
TBUF.U |
TBUG.U |
|
Benchmark |
ICE BofA 1-3 Year Canada Corporate Index |
ICE BofA 1-3 Year Canada Corporate Index |
ICE BofA 1-3 Year Canada Corporate Index |
ICE BofA 1-3 Year US Corporate Index |
ICE BofA 1-3 Year US Corporate Index |
ICE BofA 1-3 Year US Corporate Index |
|
Management Fee (%) |
0.20 |
0.20 |
0.20 |
0.20 |
0.20 |
0.20 |
|
Risk Rating |
Low |
Low |
Low |
Low |
Low |
Low |
|
Distribution Frequency |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
|
Currency Exposure |
CAD |
CAD |
CAD |
USD |
USD |
USD |
Fund Characteristics
Download file for updated weekly fund characteristics like yield to maturity, average coupon, bond yield and more.
Reasons to Invest
- Ease of execution - TD TMB ETFs can be purchased on the Toronto Stock Exchange with no minimum purchase amounts, providing investors with the desired bond exposure for their portfolio.
- Liquidity – An ETF structure allows investors to trade and adjust their bond exposure in response to changing market conditions or evolving investment objectives.
- Yield – TD TMB ETFs can offer competitive yields to GICs or other money market instruments.
- Potential for tax-efficiency - With many corporate bonds trading at a discount, a portion of the total return can be treated as capital gains as opposed to interest income which is taxed at higher rate in a non-registered investment account.
- Aligning investment time horizons – TD TMB ETFs offer the ability to match the time horizon of the investor with the maturity date of the ETF, which allows investors to save for specific financial goals or needs.
- Build laddered portfolios – TD TMB ETFs are an efficient way to help build a laddered portfolio to manage interest rate and/or reinvestment risk. While a traditional bond fund will typically buy and sell individual bonds to maintain an average maturity, a target maturity bond ETF has a fixed target date, and when the ETF closes, investors should receive their principal, similar to individual bond investments.
What Happens at Maturity
The TD TMB ETFs purchase bonds that have a common maturity date. In the maturity year, as the bonds held in the ETF mature, the proceeds are generally invested in cash and cash equivalents or additional investment-grade corporate bonds with maturity in line with the ETF’s maturity date. As the TD TMB ETF nears its maturity date, its yield to maturity should closely reflect prevailing money market yields, its duration will shorten and price volatility should gradually decline. In addition, as maturity approaches, monthly distributions can be expected to decrease, to reflect money market yields being earned. Over this same time period, the ETF’s net asset value per unit will converge toward its par value per unit. When the ETF's maturity date arrives, the ETF is expected to terminate, and investors should receive their principal, similar to individual bond investments.
Comparing Different Types of Fixed Income Offerings
TD TMB ETFs |
Individual Bonds |
GICs |
Traditional Bond Funds |
|
|---|---|---|---|---|
Defined Maturity |
|
|
|
|
Ability to Bulk Trade |
|
1 |
|
|
Monthly Income |
|
2 |
|
|
Ease of Execution |
|
|
|
|
Diversification |
|
|
NA |
|
Professional Management |
|
|
NA |
|
1Bonds trade over the counter and inventory may be limited
2Most corporate bonds pay coupons on a semi-annual basis
*ETFs and mutual funds, unlike GICs, are not insured by the Canada Deposit Insurance Corporation (CDIC) or any other deposit insurer nor guaranteed by any entity.
TD TMB ETFs Additional Resources
Product Overview
Fund Cards
Ways to invest with us
Below are some options to invest in TD ETFs within TD. If you are not a client of TD or already work with an investment professional, feel free to ask them about our ETF lineup.
The information contained herein has been provided by TD Asset Management Inc. and is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.
Commissions, management fees and expenses all may be associated with investments in ETFs. Please read the prospectus and ETF Facts before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. Certain statements in this document may contain forward-looking statements (“FLS”) that are predictive in nature and may include words such as “expects”, “anticipates”, “intends”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest and foreign exchange rates, equity and capital markets, the general business environment, assuming no changes to tax or other laws or government regulation or catastrophic events. Expectations and projections about future events are inherently subject to risks and uncertainties, which may be unforeseeable. Such expectations and projections may be incorrect in the future. FLS are not guarantees of future performance. Actual events could differ materially from those expressed or implied in any FLS. A number of important factors including those factors set out above can contribute to these digressions. You should avoid placing any reliance on FLS.
TD ETFs are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank.
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