Private Giving Foundation Celebrating One Year Anniversary with the TD Greystone Private Balanced Plus Fund APRIL 2021 Jafer Naqvi Private Giving Foundation celebrates its one-year anniversary (Feb 2021) with a new investment mandate – the TD Greystone Private Balanced Plus Fund. Jo-Anne Ryan, Executive Director, PGF, interviews Vice President and Director, TD Asset Management Inc, Jafer Naqvi who reflects on the past year and shares his insights on the future. Jo-Anne: PGF hired TD Asset Management Inc. (TDAM) to manage its investments through the TD Greystone Private Balanced Plus Fund the month before the pandemic turned our world as we knew it, upside down. How did the pandemic influence your investment decisions? Which industries were the winners and losers in 2020? Is there hope for the losers going forward? Jafer: The events of 2020 reinforced our belief in the power of prudent asset class diversification and disciplined investment management. During the rapid market sell- off in February and March, the fundamental picture was very cloudy with respect to the pandemic and long-term investment implications. We did however lean on prudent risk management rules and the guidance of the policy benchmark to rebalance into equities in late March. We also recognized the importance of technology in a lockdown world and carried an overweight exposure to assets that could grow revenues in such an environment. Equities with a growth bias, particularly in the U.S., were the clear winners in 2020 and outperformed dividend oriented and lower volatility equities both during the sell- off and in the subsequent market recovery. Into 2021, we do see tremendous opportunity in some of the laggards from the prior calendar year. In fact, we have moved to a more diversified overweight in equities, capturing dividend equities and regions that underperformed. Jo-Anne: What has been the one-year performance for the fund, and what are you forecasting going forward? What is your overall economic outlook and key themes in 2021 and beyond? Jafer: Since inception, the fund has provided double digit returns after launching during one of the most aggressive sell-offs in market history. Going forward we see lower interest rates as the primary challenge with preserving purchasing power and growing the capital base. Despite these challenges, we think the fund is positioned well with its diverse equity mix, private real estate, private infrastructure and private commercial mortgage holdings. We would expect mid-single digit returns over the long run with higher potential in early 2021. We think in the short run there are two primary factors that will support equity markets. Expectations for earnings growth we believe will continue to be revised higher and policy makers will continue to provide accommodation. We will be watching for excesses if assets continue to appreciate in price. Jo-Anne: The pandemic has brought focus to systemic inequalities. How has this impacted the role of capital markets and Environmental, Social, and Governance (ESG) investing. What is the approach to ESG at TDAM and has that changed since many inequalities were brought to light in 2020? Jafer: At TDAM, our core thesis is one in which we favor an integrated engagement approach to ESG factors. We believe that, as investors in a broad array of investment classes, we have a significant role to play in being a Continued on page 2
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Private Giving FoundationCelebrating One Year Anniversary with the TD Greystone Private Balanced Plus Fund
A P R I L 2 0 2 1
Jafer Naqvi
Private Giving Foundation celebrates its one-year anniversary (Feb 2021) with a new investment mandate – the TD Greystone Private Balanced Plus Fund. Jo-Anne Ryan, Executive Director, PGF, interviews Vice President and Director, TD Asset Management Inc, Jafer Naqvi who reflects on the past year and shares his insights on the future.
Jo-Anne: PGF hired TD Asset Management Inc. (TDAM) to manage its investments through the TD Greystone Private Balanced Plus Fund the month before the pandemic turned our world as we knew it, upside down. How did the pandemic influence your investment decisions? Which industries were the winners and losers in 2020? Is there hope for the losers going forward?
Jafer: The events of 2020 reinforced our belief in the power of prudent asset class diversification and disciplined investment management. During the rapid market sell-off in February and March, the fundamental picture was very cloudy with respect to the pandemic and long-term investment implications. We did however lean on prudent risk management rules and the guidance of the policy benchmark to rebalance into equities in late March. We also recognized the importance of technology in a lockdown world and carried an overweight exposure to assets that could grow revenues in such an environment. Equities with a growth bias, particularly in the U.S., were the clear winners in 2020 and outperformed dividend oriented and lower volatility equities both during the sell-off and in the subsequent market recovery. Into 2021, we do see tremendous opportunity in some of the laggards from the prior calendar year. In fact, we have moved
to a more diversified overweight in equities, capturing dividend equities and regions that underperformed.
Jo-Anne: What has been the one-year performance for the fund, and what are you forecasting going forward? What is your overall economic outlook and key themes in 2021 and beyond?
Jafer: Since inception, the fund has provided double digit returns after launching during one of the most aggressive sell-offs in market history. Going forward we see lower interest rates as the primary challenge with preserving purchasing power and growing the capital base. Despite these challenges, we think the fund is positioned well with its diverse equity mix, private real estate, private infrastructure and private commercial mortgage holdings. We would expect mid-single digit returns over the long run with higher potential in early 2021. We think in the short run there are two primary factors that will support equity markets. Expectations for earnings growth we believe will continue to be revised higher and policy makers will continue to provide accommodation. We will be watching for excesses if assets continue to appreciate in price.
Jo-Anne: The pandemic has brought focus to systemic inequalities. How has this impacted the role of capital markets and Environmental, Social, and Governance (ESG) investing. What is the approach to ESG at TDAM and has that changed since many inequalities were brought to light in 2020?
Jafer: At TDAM, our core thesis is one in which we favor an integrated engagement approach to ESG factors. We believe that, as investors in a broad array of investment classes, we have a significant role to play in being a
Continued on page 2
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positive influence for continued improvement in ESG. More specifically, we believe that considering ESG factors provides us with a more robust view of potential risks and opportunities. With our fiduciary duty to our clients and prospective investors, we focus on ESG issues that we can influence and are likely to impact the long-term value of an investment. We strive towards having a fully integrated ESG engagement process as part of all our investment products.
We have recently staffed a dedicated ESG Research and Engagement team that will work alongside and support the various investment teams with ESG research, ESG integration and active ownership efforts. This team will work to ensure that we have consistency in our ESG approach across all asset classes and that we are fully representing the various ownership positions that we may have across strategies.
Jo-Anne: With many people working from home (including myself), how will that impact the future of commercial real estate including our investments in real assets?
Jafer: We are cognizant of the uncertainty that the office sector faces as it reacts to macro-economic risks. Unlike past cycles, office fundamentals are in a healthier position than during the 2008 global financial crisis. The office sector has shown greater resilience compared to other real asset sectors due to stable rental collections and few rental abatements. Office owners are, for the most part, well capitalized with modest levels of leverage and are likely to fare better maintaining cash flow liquidity.
From a positioning standpoint, we believe core class “A” type office properties that are built to institutional standards (e.g. LEED®) and are located in major transit linked urban locations will exhibit less volatility over the long-term. While it is still early to make a definitive prediction as to the demand for office space given flexible work arrangements, we believe physical office space will continue to play an important role in attracting and retaining talent, facilitating social interaction and spontaneous collaboration, and improving the health and well-being of employees. Furthermore, telecommuting is also less conducive for key demographics that live in smaller dwellings (e.g. condominiums/apartments buildings) and/or need to manage caregiver duties. Therefore, despite complexities with how tenants will return to work, and a slowdown in leasing momentum, we maintain conviction in having a strategic allocation to office assets within our private real estate equity and debt strategies.
Jo-Anne: On a personal and selfish note, when do you think leisure travel will return to normal?
Jafer: It's difficult to see what normal will mean in a post pandemic world. There are likely changes to our behavior patterns from the shock that will stay with us for a while. The positive news is that regions that have contained the spread of the virus appear to be functioning closer to a pre-pandemic world with respect to gatherings and within border travel. Personally, while there may be some hurdles to cross border travel, I look forward to a deeper appreciation when seeing the world again.
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Happy 20 Year Anniversary to Canada HelpsIn the early days, CanadaHelps (Canadahelps.org) was one of the first platforms to offer online donations for charities. In subsequent years, it launched monthly giving options, Charity Gift Cards, and recently during the pandemic, it launched Cause Funds. Cause Funds are an innovative new way for Canadian donors to support the causes they are passionate about while still ensuring the gift goes to a registered charity. Donations to the Cause Funds are distributed equally amongst the charities in
the Fund. Examples of such funds include the seniors care fund, COVID-19 pandemic charity adaptation and innovation fund, and Black Solidarity Fund. PGF donors who wish to raise funds for a special occasion may do so through Canadahelps.org. They can assist in setting up a web page that may be used to solicit donations from family and friends. These donations may then be directed to a specific charity or to your PGF account. For more information, please contact [email protected]
Send an eCard on CanadaHelps
Perspective from PGF donors David and Christine Anderson on the impact of their giving The pandemic has had a significant impact on the world but nowhere is that impact greater felt then in lower-income countries, many of whom may be poorly positioned to endure increased unemployment rates and the health challenges resulting from the COVID-19 pandemic. The rapid onset of the pandemic has forced Christine and David Anderson to re-examine their philanthropic efforts in St Vincent and the Grenadines (SVG) where they have a home on the small island of Bequia.
For many years the Andersons have supported education programs, including The Sunshine School, a school for children with special needs, and the Learning Centre, an after-school tutoring program. They’ve also supported various food security programs in SVG. With the onset of the pandemic, tourism, which is a major driver of the island's economy, has for the most part ceased, local businesses are failing, unemployment rates are rising and demand for food security support has increased
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exponentially. Unlike some western countries there is arguably less support available (government and otherwise) for many of those impacted by the pandemic.
In an effort to help address the vaccine equity challenge, the Anderson’s philanthropic efforts have now turned to raising approximately $1.4 MM USD (roughly $1.8 MM CDN) to acquire vaccines on behalf of SVG with the goal of providing vaccinations for the entire population of 110,000 people in SVG. Donations of vaccine from some western countries have been received but it is estimated that this program will span several years to support the purchase of booster vaccines as well to address the challenges caused by mutations of the virus. This effort has been generously supported by John and Anne Clark who have agreed to provide $400K USD to the Grenadines Initiative vaccine program provided that matching funding can be secured. The Andersons are now reaching out to other philanthropists for support in matching the Clark’s funding. For more information, please visit https://andersonfoundation.ca/ and https://grenadinesinitiative.ca/ or write to [email protected] David and Christine Anderson
Photo from The Grenadines Initiative
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Tax TimeBy now many of you may have completed your income tax return for the 2020 calendar year. Now may be an opportune time to start planning for 2021. Please reach out to your advisor to explore the options available to implement tax-efficient strategies as part of your overall plan.
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On behalf of the PGF Board of Directors, thank you for establishing a legacy of giving. Your generosity has shone through during this unprecedented year. As a result, many charitable organizations received funds from the kindness of PGF donors that were used directly to help individuals and families that were negatively impacted by the COVID-19 pandemic. Sending you warm wishes for a glorious Spring. Enjoy the warmer days!
We welcome your questions and comments. Please direct them to [email protected] or call 416-308-6735.
Jo-Anne Ryan, Vice-President, Philanthropy, Wealth Advisory Services, TD Wealth & Executive Director, Private Giving Foundation
www.tdwealth.ca/privategiving | twitter: @charityjune30
As of March 31, 2021. Testimonials contained herein are unsolicited. They have been reviewed and approved in writing for public use.
The information contained herein has been provided by TD Wealth and is for information purposes only. The information has been drawn from sources believed to be reliable. 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. All third party products and services referred to or advertised in this newsletter are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, TD Wealth does not specifically endorse any of these products or services. TD Wealth makes the third party products and services referred to, or advertised in this newsletter, available as a convenience to its customers only, and is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. The services of the Private Giving Foundation, an independent, non-profit charitable corporation, are offered in co-operation with TD Wealth. TD Wealth represents the products and services offered by TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company). All trade-marks are the property of their respective owners. Certain statements in this document may contain forward-looking statements (“FLS”) that are predictive in nature and may include words such as “expects”, “anticipates”, “intends”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest and foreign exchange rates, equity and capital markets, the general business environment, assuming no changes to tax or other laws or government regulation or catastrophic events. Expectations and projections about future events are inherently subject to risks and uncertainties, which may be unforeseeable. Such expectations and projections may be incorrect in the future. FLS are not guarantees of future performance. Actual events could differ materially from those expressed or implied in any FLS. A number of important factors including those factors set out above can contribute to these digressions. You should avoid placing any reliance on FLS. ®The TD logo and other trademarks are the property of The Toronto-Dominion Bank or its subsidiaries.
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