TD Asset Management Launches Two Funds | Chief Investment Officer

TD Asset Management Inc., which manages TD Mutual Funds, has launched two new funds: a US equity fund, and a North American small-cap equity fund.

The TD US Dividend Growth Fund will be overseen by portfolio manager David Sykes, a managing director at TD Asset Management, with a management team that includes Damian Fernandes and Benjamin Gossack. The fund is modeled after Sykes’ mandate of investing in successful, dividend-paying companies, and is intended to complement TD’s existing range of dividend-related funds.

“The new TD US Dividend Growth Fund seeks to deliver income and capital growth and is made up of some of the most profitable and distinguished US companies,” said Sykes in a statement. “Stocks for this fund will be meticulously selected, with a focus on companies that have a sustainable competitive advantage and grow free cash flow. Additionally, the fund’s reinvested dividends can act as a portfolio buffer in volatile market conditions. All these qualities can help manage volatility while aiming to maximize performance.”

The other new fund, the TD North American Small-Cap Equity Fund, is managed by Jean Masson, who will be accompanied by Vice President and Director Julien Palardy. The fund’s investment objective is to seek long-term capital growth by investing primarily in equity securities of small- or medium-sized issuers in North America.

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Using a quantitative strategy developed by Masson and his team, the fund invests in small-cap companies from Canada and the US that the firm says have a history of steady growth, sustainable leverage, and are expected to outperform the market.

“The TD North American Small-Cap Equity Fund focuses specifically on small-cap stocks from Canada and the US with a proven track record of steady growth, along with companies that have made efficient use of their capital,” said Masson. “With a risk-adjusted focus, the fund can provide broad portfolio diversification for investors, while seeking to maximize returns.”

Tags: TD Asset Management Inc., TD Mutual Funds, TD North American Small-Cap Equity Fund, TD US Dividend Growth Fund

UK trade association the Pensions and Lifetime Savings Association (PLSA) has published a white paper urging pension regulators to concentrate on the knowledge and experience of boards and committees rather than focusing on regulation.

The PLSA argues that while there are a wide range of regulations setting out expectations of boards and committees, they are largely concerned with dictating specific procedures that plans must follow. Instead, it said, The Pensions Regulator (TPR) should ensure that those running the boards and committees are appropriately qualified, and are able to act in the way most suitable to their particular plan.

According to the paper, running pension plans effectively requires expertise in technical areas such as financial, legal, and actuarial matters, as well as more general skills such as commercial acumen and communication skills.

“To achieve this, we need a bold but not implausible shift in the way we regulate governance,” said the PLSA in its paper, “from process to people, achievable within the existing legislative framework, and capable of bringing about a real and necessary improvement in standards.”

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The paper points to 22 pieces of regulatory guidance from TPR, which it says are confusing for pension governance bodies, and can lead to misdirection of energies towards compliance with procedural requirements, and away from the strategic decisions shaping the long-term success of their pension plan.

“This approach has been unsuccessful,” said the PLSA, “and while welcome steps have been taken towards clearer, simpler governance guidelines, further progress is needed.”

PLSA said that TPR’s own research has shown highly varied standards of governance, “with only half of surveyed schemes saying all their trustees meet standards set out in the Trustee Knowledge and Understanding (TKU) Code of Practice,” said the PLSA, “while 24% say they never disagree with external advisors and 58% say they ‘rarely’ do so, hinting at a lack of capacity to challenge expensive advice.”

According to the paper, key characteristics of effective boards or committees include:

Collective knowledge of the technical areas relevant to pension fund administration, such as investment, legal, and actuarial matters.

General skills, such as an ability to communicate effectively, and commercial acumen when dealing with external advisers.

Cognitive diversity, through board or committee members with a range of different backgrounds and perspectives.

Access to executive support for the day-to-day running of the pension, enabling the governance body to concentrate on key strategic decisions.

“When DC schemes fail to achieve good value for members because of poor investment returns, excessive costs, and charges or poor administration performance as a result of poor governance, savers also suffer,” said the paper. “Both of these scenarios lead to lower incomes and a lower quality of life in retirement than ought to have been the case. It is, therefore, vital that governance bodies are properly equipped to fulfill their responsibilities.”

Tags: Pension, Pensions and Lifetime Savings Association, Research, The Pensions Regulator