TD Alternative Commodities Pool

The TD Alternative Commodities Pool, using commodity linked derivative instruments, provides investors with potential exposure to areas such as:

  1. Energy (Oil, Gasoline)

  2. Grains (Wheat, Corn, Rye)

  3. Industrial and Precious Metals (Gold, Silver, Lead, Iron)

  1. Softs (Coffee, Cotton, Sugar)

  2. Livestock (Cattle, Hogs)

  3. Carbon Credits

To access additional information about each fund, please select one of the categories below, choose the fund from the menu provided, then click on the fund name be taken to its Mutual Fund card.

What are some benefits of investing in commodities?

  • Protect portfolios against inflation

    When inflation rises, the prices of goods and services increase. Since commodities are the building blocks of those goods and services, their prices tend to go up as well, making commodities one of the few asset classes that benefit from inflation.

  • Portfolio diversification

    Commodity performance is generally based on current supply and demand dynamics. As commodity prices are tied to supply and demand, the more a commodity is in demand and the lower the supply, the higher its price will be. Commodities' historically low correlation to the prices of stocks and bonds makes them a valuable source of diversification within a portfolio.

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  • Potential to increase risk adjusted returns

    Realize the potential benefits of adding commodities to a balanced portfolio, which can improve a portfolio's risk-adjusted performance through a low to negative correlation to traditional investments like fixed income and equities.

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  • Asset Allocation Spotlight

    Investing in commodity funds can be a smart tool for portfolio diversification and inflation protection. Commodities have historically moved independently of equity and fixed income markets and, as such, can play an important role in portfolio construction.

    Part 1
    Part 2

Dedicated Commodities Team

TDAM's dedicated commodities team takes an active quantitative and qualitative approach in combination with high quality fundamental research to seek to add more value and capabilities compared to the broadly used passive, systematic, or indexing approaches used by other funds.

Take advantage of TDAM's extensive market research, portfolio management and industry presence with an intimate understanding of commodity fundamentals (supply and demand) leading to a strategic determination of commodity prices and structures.

Meet the Team

Commodities Spotlight Video

 

In this TDAM Asset Allocation Spotlight video, Hussein Allidina, Managing Director, Head of Commodities, TD Asset Management (TDAM), chats with Peter Verbaken, Head of Commodities at APG Asset Management to discuss the role of commodity investments within a diversified portfolio.

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TDAM draws upon years of experience in successfully managing commodities and alternative strategies for large pension plan managers in Canada (with the largest allocation to commodities across pension plans managed by TDAM), bringing the rigour and sophistication of institutional money management to retail investors.

Using the deep expertise of one of Canada’s largest pension plan money managers3, each portfolio is carefully designed by TDAM to optimize asset allocation and diversification to help investors get more upside while limiting the downside.

Many of the largest Pension funds include a commodities allocation in their portfolios, including the Ontario Teachers' Pension Plan (OTPP)4. OTPP looks to commodities to help hedge against inflation with investments in commodities leading the list of inflation sensitive assets, accounting for 10% of the asset mix in 20224.

1 All data related to asset returns, correlation and volatility are as of Dec 31, 2022. All data related to portfolios is as of Q2 2023. Commodities = BCOM Total Return Index, Canadian Fixed Income = FTSE Canada Universe Bond Index, Canadian Corporate Bonds = FTSE Canada All Corporate Bond Index, U.S. Fixed Income = Bloomberg Barclays US Aggregate Index, Canadian Equity = S&P/TSX Composite, U.S. Equity = S&P 500, International Equity = MSCI EAFE, Fixed Income Treasury and Fixed income Corporate = are based on actual fund composition, which are different from the standard US and Canadian benchmark exposure. We break down the risk by this dimension to show the readers that it could have a meaningful impact on the optimization result. XLE = Energy Select Sector SPDR ETF, XOP = S&P Oil & Gas Exploration & Production Select Industry TR Index (XOP ETF data only from 2006), XEG = iShares S&P TSX Capped Energy.

2 Aggregate statistics as of March 31, 2023 for TDAM and Epoch Investment Partners, Inc.

3 The Top 40 Money Managers (assets as of December 31, 2022)” - Benefits Canada, May 2023 Edition

4 Annual Report 2022 - Ontario Teachers' Pension Plan

5 Communique, Pension Investment Association of Canada Newsletter, 2022 Asset Mix Report - piacweb.org

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