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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 (ETFs) and Mutual Funds (collectively, "TD TMB(s)"). The TD TMBs offer the benefits of a traditional bond fund like diversification and regular income with the added benefits that come with an ETF or Mutual Fund like liquidity and transparency. TD TMBs 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 TMBs 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 TD TMB matures in successive years from 2025 to 2031. The suite includes the following investment wrappers:
CAD
Each of the Canadian TD TMBs 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 TD TMB.
USD
Each of the U.S. TD TMBs 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 TD TMB.
Key Facts
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TD Target 2026 Investment Grade Bond | TD Target 2026 U.S. Investment Grade Bond | TD Target 2027 Investment Grade Bond | TD Target 2027 U.S. Investment Grade Bond | TD Target 2028 Investment Grade Bond | TD Target 2029 Investment Grade Bond | TD Target 2030 Investment Grade Bond | TD Target 2031 Investment Grade Bond |
ETF Tickers |
TBCF | TBUG.U | TBCH | TBCI | - | |||
Mutual Fund |
TDB2731 | TDB2796 | TDB2808 | TDB2816 | ||||
Benchmark |
ICE BofA 1-3 Year Canada Corporate Index | ICE BofA 1-3 Year US Corporate Index | ICE BofA 1-3 Year Canada Corporate Index | ICE BofA 1-3 Year US Corporate Index | ICE BofA 1-5 Year Canada Corporate Index | ICE BofA 1-5 Year Canada Corporate Index | ICE BofA 1-5 Year Canada Corporate Index | ICE BofA 1-5 Year Canada Corporate Index |
Management |
0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 |
Risk Rating |
Low | Low | Low | Low | Low | Low | Low | Low |
Distribution Frequency |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Monthly & Variable |
Currency Exposure |
CAD | CAD or USD | CAD | CAD or USD | CAD | CAD | CAD | CAD |
TMB 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 or Fund structure allows investors to trade and adjust their bond exposure in response to changing market conditions or evolving investment objectives.
- Yield – TD TMBs 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 TMBs offer the ability to match the time horizon of the investor with the maturity date of the TD TMB, which allows investors to save for specific financial goals or needs.
- Build laddered portfolios – TD TMBs 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, the TD TMBs have a fixed target date, and when the TD TMB matures, investors should receive their principal, similar to individual bond investments.
What Happens at Maturity
The TD TMBs purchase bonds that have a common maturity date. In the maturity year, as the bonds held in the TD TMB mature, the proceeds are generally invested in cash and cash equivalents or additional investment-grade corporate bonds with maturity in line with the TD TMBs maturity date. As the TD TMB 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 TD TMBs net asset value per unit will converge toward its par value per unit. When the TD TMBs maturity date arrives, the TD TMB is expected to terminate, and investors should receive their principal, similar to individual bond investments.
Comparing Different Types of Fixed Income Offerings
TD Target Maturity Bond Funds (ETF and Mutual Fund) |
Individual Bonds |
GICs |
Traditional Bond Funds |
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|---|---|---|---|---|
Defined Maturity |
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|
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Ability to Bulk Trade |
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1 |
|
|
Monthly Income |
|
2 |
|
|
Ease of Execution |
|
|
|
|
Diversification |
|
|
NA |
|
Professional Management |
|
|
NA |
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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 TMBs Additional Resources
Product Overview
Fund Cards - ETFs
Fund Cards - Mutual Funds
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 mutual fund and/or exchange-traded fund ("ETF") investments (collectively, "the Funds"). Trailing commissions may be associated with mutual fund investments. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. Please read the fund facts or ETF Facts and the prospectus, which contain detailed investment information, before investing in the Funds. The indicated rates of return (other than for money market funds) are the historical total returns for the period, compounded for mutual funds, including changes in unit value and reinvestment of distributions. The indicated rate of return for each money market fund is an annualized historical yield based on the seven- day period ended as indicated and annualized in the case of effective yield by compounding the seven day return and does not represent an actual one year return. Index returns do not represent ETF returns. The indicated rates of return do not take into account sales, redemption, commission charges, distribution or optional charges, as applicable, or income taxes payable by any securityholder that would have reduced returns. The Funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer and are not guaranteed or insured. Their values change frequently. There can be no assurances that a money market fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment will be returned to you. Past performance may not be repeated.
TD Mutual Funds are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers. TD ETFs are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank.
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