TD Science & Technology Fund

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TD Science &

Technology Fund

for the period ended December 31, 2015

TD Mutual Funds

Annual Management Report of Fund Performance

(03/16) 525508

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 [email protected], or by visiting our website at tdassetmanagement.com or the SEDAR website at sedar.com

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Management Discussion of Fund Performance

Investment Objectives and Strategies

The investment objective of the TD Science & Technology Fund

(“Fund”) is to achieve long-term capital appreciation by investing

primarily in equity securities of companies that are engaged in the

research, develop ment, production, or distribution of products or

services related to science and technology. In seeking to achieve

this objective, the Fund invests at least 65 percent of total assets

in common stocks with selection of the securities generally reflecting

a growth approach. Holdings can range from small, unseasoned

companies developing new technologies to blue chip firms with

established track records of developing and marketing technology.

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 40.9 percent* for

the year ended December 31, 2015 (“Reporting Period”), versus

23.8 percent for the Fund’s product benchmark, the MSCI All Country

World Information Technology Index (Net Dividend, C$) (“MSCI AC

World Information Technology Index (ND, C$)”). Returns for other

series of the Fund may vary, largely due to differences in fees and

expenses. Unlike the benchmark, the Fund’s return is quoted after

the deduction of fees and expenses.

Market Update

Major U.S. stock indices were narrowly mixed in the Reporting Period.

Markets benefited from steady economic and employment growth

early in the Reporting Period, followed by a sharp fall in global

equities during the summer in response to a plunge in Chinese

stocks. While emerging markets generally remained weak in the

final months of the Reporting Period, equity markets in developed

countries rebounded amid hopes for additional stimulus measures

in Europe and Asia. Over the Reporting Period, information

technology companies strongly outperformed the broader market.

Key Contributors/Detractors

At the overall sector level, allocation effects drove positive relative

returns, with stock selection also contributing.

A significant position in the media industry along with strong stock

• Ctrip.com International is China’s largest online travel agent.

Recently Baidu exchanged shares of travel search engine Qunar

for Ctrip.com, effectively giving Ctrip.com control of its

competitor’s board and a roughly 80 percent market share in

the Chinese travel industry.

• Internet subscription service Netflix continues to grow subscribers

at a strong pace, particularly in overseas markets.

The Fund’s stock selection in the telecommunication services

sector were also effective, though some of the gain was offset by

a substantial position in the industry.

• Telecommunication services company Crown Castle International

is a leading independent owner, operator, and developer of

broadcast and wireless communication sites in North America.

Despite market fears that larger wireless brands like T-Mobile and

Sprint might decommission some towers, this has not happened.

Instead, rising competition between major carriers has centered

around network quality, which benefits tower companies like

Crown Castle International.

On the negative side, limited exposure to the information technology

services sector detracted from performance. This sector remains

challenged, especially in software implementation, as companies

increasingly move toward cloud-based software. These require less

implementation work than traditional large, complex installations

that needed to be done at each customer’s location.

During the Reporting Period, the Fund meaningfully decreased

exposure in software companies as relative valuation within the

space no longer offered attractive options. This move to decrease

software holdings resulted in a corresponding decrease in the

Fund’s exposure to North America. Within the software sector,

the Portfolio Adviser prefers companies with unique intellectual

property and strong market positions.

In addition, the Portfolio Adviser notably increased the Fund’s

position in semiconductor companies, several of which are located

in developed Europe. The Portfolio Adviser continues to believe

some semiconductor companies are well positioned to benefit from

increasing uses in industrials and the global adoption of mobile

devices in the long term.

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Recent Developments

The Portfolio Adviser is more optimistic than many about the

global economic and market outlook in 2016, and the recent sharp

pullback in stock prices has renewed the valuation appeal of many

high-growth technology companies. The U.S. economy appears

fundamentally healthy, and Europe is engaging in massive

quantitative easing that is reducing the value of the euro and

increasing competitiveness. Although China’s struggles have

dominated market sentiment recently, the Portfolio Adviser is

optimistic that the country is successfully managing the transition

to a consumer-focused economy.

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.

TDAM has retained T. Rowe Price Associates, Inc. as sub-adviser

for the Fund in addition to TDAM. The Fund pays TDAM an annual

management fee, which may vary for each series of Fund units,

and an annual administration fee of 0.30 percent with respect to

the Investor Series, Advisor Series and D-Series units of the Fund.

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. (“TDW”), a wholly-owned subsidiary of TD. TDW, 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.

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 tdassetmanagement.com or at the securityholder’s

request at no cost by contacting TDAM (see front cover).

The Fund did not engage in any portfolio transactions requiring

IRC approval during the Reporting Period.

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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 Unit1

INVESTOR SERIES 2015 2014 2013 2012 2011

Net Assets, Beginning of Year $ 38.96 $ 29.56 $ 19.68 $ 17.07 $ 17.22

Increase (Decrease) from Operations:

Total Revenue 1.64 1.38 0.30 0.15 0.13 Total Expenses (excluding distributions) (1.46) (1.06) (0.73) (0.60) (0.53) Realized Gains (Losses) for the Period 12.52 13.35 4.88 2.23 1.84 Unrealized Gains (Losses) for the Period 3.05 (4.48) 5.41 0.82 (1.59)

Total Increase (Decrease) from Operations2_{15.75 9.19 9.86 2.60 (0.15)} Distributions:

From Net Investment Income (excluding dividends) 0.00 0.00 0.00 0.00 0.00 From Dividends 0.00 0.00 0.00 0.00 0.00 From Capital Gains 0.00 0.00 0.00 0.00 0.00 Return of Capital 0.00 0.00 0.00 0.00 0.00

Total Annual Distributions3_{0.00 0.00 0.00 0.00 0.00} Net Assets at December 31 $ 54.89 $ 38.96 $ 29.56 $ 19.68 $ 17.07 ADVISOR SERIES 2015 2014 2013 2012 2011

Total Increase (Decrease) from Operations2_{3.66 2.08 2.30 0.60 (0.03)} Distributions:

Total Annual Distributions3_{0.00 0.00 0.00 0.00 0.00} Net Assets at December 31 $ 12.64 $ 8.97 $ 6.80 $ 4.53 $ 3.93

1 This information is derived from the Fund’s audited annual financial statements. The Fund adopted International Financial Reporting Standards (“IFRS”)

on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles (“GAAP”) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value (“NAV”) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values 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 NAV for transactions with unitholders. All figures presented prior to January 1, 2013 were prepared in accordance with Canadian GAAP.

2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations presented

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Net Assets per Unit1 (continued)

F-SERIES 2015 2014 2013 2012 2011

Total Increase (Decrease) from Operations2_{4.51 2.45 3.01 0.76 0.03} Distributions:

Total Annual Distributions3_{0.00 0.00 0.00 0.00 0.00} Net Assets at December 31 $ 15.36 $ 10.74 $ 8.03 $ 5.27 $ 4.50 D-SERIES 2015* 2014 2013 2012 2011

Net Assets, Beginning of Year $ 10.00†_N/A_N/A_N/A_N/A Increase (Decrease) from Operations:

Total Revenue 0.04 N/A N/A N/A N/A

Total Expenses (excluding distributions) (0.07) N/A N/A N/A N/A

Realized Gains (Losses) for the Period 0.68 N/A N/A N/A N/A

Unrealized Gains (Losses) for the Period 0.27 N/A N/A N/A N/A Total Increase (Decrease) from Operations2_0.92_N/A_N/A_N/A_N/A Distributions:

From Net Investment Income (excluding dividends) 0.00 N/A N/A N/A N/A

From Dividends 0.00 N/A N/A N/A N/A

From Capital Gains 0.00 N/A N/A N/A N/A

Return of Capital 0.00 N/A N/A N/A N/A Total Annual Distributions3_0.00_N/A_N/A_N/A_N/A Net Assets at December 31 $ 11.46 N/A N/A N/A N/A

1 This information is derived from the Fund’s audited annual financial statements. The Fund adopted International Financial Reporting Standards (“IFRS”)

on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles (“GAAP”) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value (“NAV”) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values 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 NAV for transactions with unitholders. All figures presented prior to January 1, 2013 were prepared in accordance with Canadian GAAP.

2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations presented

above starting from fiscal year 2013 are based on the weighted average number of units outstanding over the financial periods. The increase (decrease) from operations prior to 2013 were calculated by aggregating each valuation day’s increase (decrease) from operations divided by the number of units outstanding on that date. This table is 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.

* Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date.

† Initial offering price.

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Ratios and Supplemental Data

INVESTOR SERIES 2015 2014 2013 2012 2011 Total Net Asset Value (000s)1_{$ 320,862 $ 202,460 $ 143,952 $ 98,814 $ 93,846}

Number of Units Outstanding1_{5,845,073 5,196,540 4,869,564 5,020,924 5,493,384}

Management Expense Ratio (%)2_{2.82 2.82 2.82 2.82 2.82}

Management Expense Ratio Before

Waivers or Absorptions (%) 2.82 2.82 2.82 2.82 2.82 Trading Expense Ratio (%)3_{0.22 0.23 0.17 0.31 0.17}

Portfolio Turnover Rate (%)4_{246.66 254.47 97.63 181.33 113.69}

Net Asset Value per Unit $ 54.89 $ 38.96 $ 29.56 $ 19.68 $ 17.08 ADVISOR SERIES 2015 2014 2013 2012 2011 Total Net Asset Value (000s)1_{$ 54,785 $ 26,637 $ 14,508 $ 9,024 $ 8,768}

Number of Units Outstanding1_{4,333,594 2,969,363 2,132,075 1,992,475 2,230,415}

Net Asset Value per Unit $ 12.64 $ 8.97 $ 6.80 $ 4.53 $ 3.93 F-SERIES 2015 2014 2013 2012 2011 Total Net Asset Value (000s)1_{$ 55,752 $ 14,586 $ 5,110 $ 2,252 $ 2,245}

Number of Units Outstanding1_{3,630,378 1,357,978 636,345 427,361 498,212}

Net Asset Value per Unit $ 15.36 $ 10.74 $ 8.03 $ 5.27 $ 4.51 D-SERIES 2015 2014 2013 2012 2011 Total Net Asset Value (000s)1_{$ 7,281}_N/A_N/A_N/A_N/A

Number of Units Outstanding1_635,524_N/A_N/A_N/A_N/A

Management Expense Ratio (%)2_2.03_N/A_N/A_N/A_N/A

Waivers or Absorptions (%) 2.03 N/A N/A N/A N/A

Trading Expense Ratio (%)3_0.22_N/A_N/A_N/A_N/A

Portfolio Turnover Rate (%)4_246.66_N/A_N/A_N/A_N/A

Net Asset Value per Unit $ 11.46 N/A N/A N/A N/A 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) for the stated

period and is expressed as an annualized percentage of daily average NAV during the period. It excludes any operating expenses waived or absorbed by TDAM, which may be discontinued at any time by TDAM at its discretion without notice.

3 The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average

NAV during the stated period.

4 The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio adviser manages its investments. A portfolio turnover rate of 100% is

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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 maximum management fee is the maximum fee that can be

charged to each series of units of the Fund according to the

simplified prospectus. TDAM may charge management fees that are

less than the management fees TDAM is otherwise entitled to charge

each series of units of the Fund. The actual manage ment fee is the

annualized fee that was charged for the Reporting Period. TDAM may

charge the maximum management fee without notice to unitholders.

Management fees for the Reporting Period and a breakdown of the

major services rendered for each series, as a percentage of the actual

management fees, are as follows:

Maximum Actual Dealer Waived

(expressed as a %) Mgmt. Fee Mgmt. Fee Compensation Expenses Other‡ Investor Series 2.25 2.25 43.06 0.00 56.94 Advisor Series 2.25 2.25 51.73 0.00 48.27 F-Series 1.25 1.25 0.00 0.00 100.00 D-Series 1.50 1.50 12.33 0.02 87.65 ‡Investment advisory, trustee, marketing services and other.

Past Performance

The following charts show how the Fund has performed in the past,

and can help you understand the risks of investing in the Fund.

These returns include the reinvestment of all distributions and would

be lower if an investor did not reinvest distributions. They do not

include deduction of sales, switch, redemption, or other optional

charges (which dealers may charge) or income taxes payable, and

these returns would be lower if they did. The Fund’s past performance

does not necessarily indicate how it will perform in the future.

Year-by-year returns

The bar charts show how the Fund’s performance has varied from

year to year for each of the years shown. They show in percentage

terms how an investment made on January 1 would have increased

or decreased by December 31.

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Annual Compound Returns

The following table shows the annual compound total returns for each

series of units of the Fund for each of the periods indicated ended on

December 31, 2015, compared with the following benchmarks:

• Product Benchmark:

° MSCI AC World Information Technology Index (ND, C$) –

This index is comprised of stocks of technology companies from

developed and emerging markets, net of withholding taxes.

• General market indices:

° MSCI World Index (Net Dividend, C$) (“MSCI World Index

(ND, C$)”) – This index includes stocks of companies in all the

developed markets around the world, net of withholding taxes.

Past 10 Past 5 Past 3 Past (expressed as a %) years years years year

INVESTOR SERIES

TD Science & Technology Fund 14.6 26.1 40.8 40.9 Product Benchmark 9.1 18.3 28.0 23.8 General market:

MSCI World Index (ND, C$) 6.8 15.0 22.5 18.9

ADVISOR SERIES

MSCI World Index (ND, C$) 6.8 15.0 22.5 18.9

F-SERIES

MSCI World Index (ND, C$) 6.8 15.0 22.5 18.9 Since Past 5 Past 3 Past (expressed as a %) inception years years year

D-SERIES

(Start date October 20, 2015)

TD Science & Technology Fund 14.6 N/A N/A N/A Product Benchmark 9.2 N/A N/A N/A General market:

MSCI World Index (ND, C$) 6.7 N/A N/A N/A

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Summary of Investment Portfolio

as at December 31, 2015 % of Net Asset Value

ASSET ALLOCATION

U.S. Equities 51.0 International Equities 42.7 Cash 5.8 Other Net Assets (Liabilities) 0.5

PORTFOLIO DETAILS Information Technology 61.3 Consumer Discretionary 24.6 Industrials 3.4 Telecommunication Services 2.1 Financials 1.9 Health Care 0.4 Cash 5.8 Other Net Assets (Liabilities) 0.5

TOTAL NET ASSET VALUE $ 438,679,645

as at December 31, 2015 % of Net Asset Value

TOP 25 INVESTMENTS

1. Alphabet Inc. 7.7 2. Tesla Motors Inc. 7.1 3. Liberty Global PLC 7.0 4. Cash 5.8 5. Tencent Holdings Limited 4.9 6. Applied Materials Inc. 4.8 7. JD.com Inc. 4.5 8. ASML Holding NV 4.5 9. LinkedIn Corporation 4.3 10. NXP Semiconductors NV 4.2 11. Avago Technologies Limited 3.8 12. Sabre Corporation 3.4 13. Alibaba Group Holding Limited 3.3 14. Amadeus IT Holding SA 3.3 15. The Priceline Group Inc. 3.0 16. Sensata Technologies Holding NV 3.0 17. Microchip Technology Incorporated 2.8 18. Amazon.com Inc. 2.4 19. SK hynix Inc. 2.1 20. Taiwan Semiconductor Manufacturing Company Limited 2.0 21. Crown Castle International Corp. 1.9 22. QUALCOMM Incorporated 1.8 23. Microsemi Corporation 1.5 24. SoftBank Corp. 1.5 25. NetSuite Inc. 1.4 Total % of Net Asset Value represented by these holdings 92.0

Note: Totals may not add due to rounding to one decimal place of individual figures.

The Summary of Investment Portfolio may change due to ongoing

portfolio transactions of the Fund. Updates are available

quarterly. You may obtain the most current quarterly information

by contacting TD Mutual Funds at 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, Ontario, M5K 1G8, or by

e-mail to [email protected]

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forward-looking state ments including, but not limited to, statements about the Fund, its strategy, risks, expected performance and

condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events

or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” and similar

forward-looking expressions or negative versions thereof.

In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund

action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about

future general economic, political and relevant market factors, such as interest rates, foreign exchange rates, equity and capital

markets, and the general business environment, in each case assuming no changes to applicable tax or other laws or government

regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties,

some of which may be unforeseeable. Accordingly, assumptions concerning future economic and other factors may prove to be

incorrect at a future date.

Forward-looking statements are not guarantees of future performance, and actual events could differ materially from those

expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could con tribute

to these digressions, including, but not limited to, general economic, political and relevant market factors in North America

and internationally, interest and foreign exchange rates, equity and capital markets, business competition, tech nological change,

changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events.

The above mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully

before making any investment decisions and you are urged to avoid placing any undue reliance on forward-looking statements.

Further, there is no specific intention of updating any forward-looking statements contained herein whether as a result of new

information, future events or otherwise.

For Funds with references to FTSE TMX Canada indices: