Green light for TD

When it comes to fund family mergers, it couldn’t get much easier than it has been for Toronto-Dominion and Canada Trust. Since the late-January announcement of the purchase of Canada Trust by TD Bank, the two portfolio management groups have combined without difficulty and on Friday, August 19, the mutual fund shareholders at both families got to have their say.

Steve Geist, vice president and managing director of global products and advisor services for TD Asset Management Inc., says that the response from investors has been positive. "The vote was more than 90 per cent in favour," he says. Attendance at Friday’s mutual fund shareholder meeting was high, but the virtual attendance by those who cast their ballot by mail was also robust.

The shareholders voted on the bank’s proposal to merge the mutual fund families into the new TD Fund family. "Our funds aligned well with the CT funds, and the combination was seamless," Steve said. "Our managed portfolio products, in particular, were extremely similar." The shareholders for Canada Trust’s 18 portfolios voted almost unanimously to merge with the 30 existing TD managed portfolios. And the rest of the CT shareholders will now have an expanded lineup of funds from which to choose.

"The integration as a whole is focused on the customer," Steve said. "When you combine companies you have the opportunity to pick the best parts from each." TD is hoping to recreate many of the successful aspects of Canada Trust’s customer service success, for instance. Steve said that CT customers should take comfort in the fact that the CEO of Canada Trust, Ed Clark, was named president and COO of TD Bank Financial Group.

The change of name for TD’s funds, from Green Line Funds to TD Funds, is intended to align with the company’s overall branding strategy. "People would oftentimes call them TD Funds anyways," Steve said. The family is now the fifth largest fund family in Canada in terms of assets under management.

TD’s acquisition of Canada Trust is the first major bank merger to come after the guidelines set in place by Finance Minister Paul Martin two years ago. The company released stellar third-quarter profit results earlier this month and its stock price is picking up value.

"Many analysts believe that financial services firms will do well now, at the end of the interest rate increase cycle, but the fact that we have done so well while a merger is taking place should be a vote of confidence," Steve says.

Levi Folk, Richard Webb and Peter Diplaros are Investment.com mutual fund specialists and editors of the Fund Counsel newsletter. They can be reached by e-mail at peterd@hqinvestment.com.