md family of funds - june 2020 · 2020. 8. 26. · 1 800 267-2332, by writing to us at md financial...

MD Family of Funds

2020 Interim Financial Statements

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These Interim Unaudited Financial Statements do not contain the Interim Management Report of Fund Performance (“MRFP”) of the investment fund. If you have not received a copy of the Interim MRFP with this report, you may obtain a copy of the Interim MRFP at your request, and at no cost, by calling the toll-free number 1 800 267-2332, by writing to us at MD Financial Management Inc., 1870 Alta Vista Drive, Ottawa ON K1G 6R7, by visiting our website at md.ca or by visiting the SEDAR website at sedar.com. Copies of the Annual Financial Statements or Annual MRFP may also be obtained, at no cost, using any of the methods outlined above. Securityholders may also contact us using one of these methods to request a copy of the investment fund’s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure.

NOTICE OF NO AUDITOR REVIEW OF THE INTERIM FINANCIAL STATEMENTS MD Financial Management Inc, the Manager of the Fund, appoints independent auditors to audit the Fund’s Annual Financial Statements. Under Canadian securities laws (National Instrument 81-106), if an auditor has not reviewed the Interim Financial Statements, this must be disclosed in an accompanying notice. The Fund’s independent auditors have not performed a review of these Interim Financial Statements in accordance with standards established by the Canadian Institute of Chartered Accountants.

MD Financial Management Inc. wholly owns or has a majority interest in its seven subsidiaries (the MD Group of Companies). It provides financial products and services, is the fund manager for the MD Family of Funds and offers investment counselling services. For a detailed list of the MD Group of Companies, visit md.ca.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund. Standard performance data assumes reinvestment of distributions only and does not take into account sales, redemption, distribution or optional charges payable by any securityholder which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. You may obtain a copy of the prospectus before investing by calling your MD Advisor or the MD Trade Centre at 1 800 267-2332.

Interim Unaudited Financial Statements for the Six-Month Period Ended June 30, 2020

A Message Regarding Your Financial Statements

Dear MD Family of Funds Investor:

As part of our commitment to keeping you informed about your MD fund investments, please find attached the 2020 Interim Financial Statements.

The Interim Financial Statements are produced on a fund-by-fund basis, and your report only includes information on the funds you owned as of June 30, 2020.

If you have any questions regarding these documents, please contact your MD advisor or the MD TradeCentre at 1 800 267-2332. We thank you for your continued investment in the MD Family of Funds.

MD International Growth FundSchedule of Investment Portfolio as at June 30, 2020 (unaudited)

(in $000's except for number of shares)

Percentages shown in brackets relate investments at fair value to net assets of the Fund.

Number of Shares

Average Cost ($)

Fair Value

($)

FOREIGN EQUITIESAustralia (1.71%)Cochlear, Ltd. 9,700 1,033 1,721CSL Limited 11,700 1,299 3,155Total for Australia 2,332 4,876

Belgium (0.25%)Anheuser-Busch InBev SA/NV 10,637 1,702 714Total for Belgium 1,702 714

Bermuda (1.16%)IHS Markit, Ltd. 10,203 512 1,049Jardine Matheson Holdings Limited 39,600 2,880 2,253Total for Bermuda 3,392 3,302

Cayman Islands (2.04%)Alibaba Group Holding Limited ADR 5,700 1,560 1,674NetEase, Inc. ADR 2,200 998 1,286Tencent Holdings Limited 32,699 1,227 2,860Total for Cayman Islands 3,785 5,820

China (0.20%)Fuyao Glass Industry Group Co., Ltd. Cl. H 173,400 626 563Total for China 626 563

Denmark (6.65%)Chr. Hansen Holding A/S 23,206 2,344 3,258Coloplast A/S Series B 16,000 1,643 3,378Novo Nordisk A/S Cl. B 52,700 2,750 4,644Novozymes A/S Series B 69,815 4,121 5,494SimCorp A/S 5,294 686 777Topdanmark A/S 25,635 1,485 1,442Total for Denmark 13,029 18,993

Finland (2.07%)Kone OYJ Series B 43,589 2,705 4,079Sampo OYJ Series A 39,038 2,551 1,827Total for Finland 5,256 5,906

France (7.85%)Air Liquide SA 36,119 4,840 7,088ALD SA 63,562 1,325 855Legrand SA 16,688 1,568 1,724L'Oréal SA 8,300 2,162 3,624LVMH Moet Hennessy Louis Vuitton SA 11,263 4,682 6,718Total SA 46,300 2,602 2,402Total for France 17,179 22,411

Germany (5.42%)adidas AG 8,900 1,534 3,171Deutsche Boerse AG 10,266 1,304 2,527FUCHS PETROLUB SE 26,462 1,495 1,211FUCHS PETROLUB SE Preferred 17,862 1,154 976SAP SE 40,081 5,628 7,598Total for Germany 11,115 15,483

4 MD Family of Funds | Interim Financial Statements 2020




Number of Shares

Average Cost ($)

Fair Value

($)

Hong Kong (5.25%)AIA Group Limited 450,000 4,443 5,703CLP Holdings Limited 203,500 2,501 2,713CNOOC Limited 1,356,000 2,099 2,074Hang Lung Properties, Ltd. 941,000 2,875 3,038Hong Kong & China Gas Company Limited 690,213 1,286 1,453Total for Hong Kong 13,204 14,981

Ireland (2.58%)Aon PLC Cl. A 18,183 4,334 4,768Glanbia PLC 89,271 2,057 1,376Kerry Group PLC Cl. A 7,178 882 1,216Total for Ireland 7,273 7,360

Italy (0.90%)Recordati SPA 37,961 2,087 2,580Total for Italy 2,087 2,580

Japan (18.46%)Daikin Industries, Ltd. 21,900 2,532 4,803Daito Trust Construction Company, Ltd. 18,300 3,197 2,293FANUC Corporation 13,000 3,068 3,168Japan Exchange Group, Inc. 71,200 1,473 2,243Kao Corporation 24,300 1,774 2,623Keyence Corporation 11,800 2,753 6,719Makita Corporation 49,200 2,578 2,437MISUMI Corporation 56,600 1,930 1,928Murata Manufacturing Company, Ltd. 40,800 2,308 3,260Nomura Research Institute, Ltd. 51,500 1,416 1,916Sekisui Chemical Co., Ltd. 79,800 1,749 1,557Seven & I Holdings Co., Ltd. 40,900 2,206 1,820Shimano Inc. 9,400 1,937 2,466Shin-Etsu Chemical Co., Ltd. 26,900 2,526 4,288SMC Corporation 6,100 2,364 4,246Sysmex Corporation 33,800 2,797 3,540Tsuruha Holdings, Inc. 18,200 2,351 3,416Total for Japan 38,959 52,723

Jersey (1.28%)Experian PLC 77,100 2,100 3,655Total for Jersey 2,100 3,655

Netherlands (3.36%)Adyen NV 808 830 1,603ASML Holding NV 8,740 1,780 4,363Wolters Kluwer NV 34,247 1,877 3,639Total for Netherlands 4,487 9,605

Portugal (0.42%)Galp Energia, SGPS, SA Cl. B 76,300 1,659 1,200Total for Portugal 1,659 1,200

Singapore (1.23%)Ascendas Real Estate Investment Trust 653,660 1,905 2,028DBS Group Holdings Limited 73,100 1,322 1,488Total for Singapore 3,227 3,516

5MD Family of Funds | Interim Financial Statements 2020




Number of Shares

Average Cost ($)

Fair Value

($)

South Korea (1.04%)LG Household & Health Care, Ltd. Preferred 1,635 1,156 1,349Samsung Electronics Co., Ltd. Preferred 30,662 1,357 1,630Total for South Korea 2,513 2,979

Spain (1.59%)Amadeus IT Group, SA 12,923 948 916Industria de Diseno Textil, SA 100,300 4,636 3,611Total for Spain 5,584 4,527

Sweden (1.00%)ASSA ABLOY AB Series B 103,157 2,872 2,855Total for Sweden 2,872 2,855

Switzerland (11.30%)Alcon Inc. 6,015 467 470Givaudan SA 830 2,229 4,207Kuehne & Nagel International AG 14,000 2,656 3,165Nestlé SA 35,702 4,245 5,374Novartis AG 27,100 3,026 3,208Novartis AG ADR 19,600 2,264 2,331Roche Holding AG 13,579 4,641 6,406SGS SA 1,083 3,263 3,601Sika AG 7,595 1,004 1,989VAT Group AG 6,049 1,015 1,503Total for Switzerland 24,810 32,254

Taiwan (2.45%)Taiwan Semiconductor Manufacturing Company, Ltd. 164,000 1,572 2,363Taiwan Semiconductor Manufacturing Company, Ltd. ADR 60,100 2,018 4,645Total for Taiwan 3,590 7,008

United Kingdom (11.43%)Bunzl PLC 94,128 3,603 3,430Compass Group PLC 175,490 4,677 3,281Croda International Public Limited Company 21,650 1,452 1,915Diageo PLC 88,970 4,106 4,014Halma PLC 50,283 931 1,948InterContinental Hotels Group PLC 30,606 2,214 1,844Intertek Group PLC 53,262 3,482 4,873Rathbone Brothers PLC 26,275 1,078 628Reckitt Benckiser Group PLC 27,800 3,405 3,477RELX PLC 97,309 2,715 3,061Smith & Nephew PLC 105,400 2,444 2,669Spirax-Sarco Engineering PLC 8,912 1,005 1,496Total for United Kingdom 31,112 32,636

Exchange Traded Funds (6.43%)iShares MSCI EAFE ETF 221,449 18,330 18,353Total for Exchange Traded Funds 18,330 18,353Total for Foreign Equities (96.06%) 220,223 274,300Total for Investments (96.06%) $220,223 $274,300Cash and Other Net Assets (3.94%) 11,257Total Net Assets Attributable to Holders of Redeemable Units (100.00%) $285,557



(in $000's)

Schedule of Derivative InstrumentsFORWARD CURRENCY CONTRACTS

Contracts Pay ReceiveContract

Rate Due DateFair

Value ($) Counterparty

Rating of the

Counterparty*

1 15,084 Canadian Dollar 16,335 Australian Dollar 1.083 09/15/2020 247 Bank of Montreal A+1 450 Canadian Dollar 480 Australian Dollar 1.066 09/15/2020 - State Street Bank and Trust Co. AA-1 3,404 Canadian Dollar 2,250 Euro Currency 0.661 07/14/2020 39 Goldman Sachs Bank USA A+1 3,402 Canadian Dollar 2,240 Euro Currency 0.658 07/14/2020 26 Royal Bank of Canada AA-1 1,123 Canadian Dollar 740 Euro Currency 0.659 07/14/2020 10 Toronto-Dominion Bank AA-1 665 Canadian Dollar 440 Euro Currency 0.661 07/14/2020 8 Toronto-Dominion Bank AA-1 865 Canadian Dollar 570 Euro Currency 0.659 07/14/2020 7 State Street Bank and Trust Co. AA-1 667 Canadian Dollar 440 Euro Currency 0.659 07/14/2020 6 State Street Bank and Trust Co. AA-1 1,097 Canadian Dollar 720 Euro Currency 0.656 07/14/2020 5 Royal Bank of Canada AA-1 724 Canadian Dollar 475 Euro Currency 0.656 07/14/2020 3 Toronto-Dominion Bank AA-1 749 Canadian Dollar 490 Euro Currency 0.654 07/14/2020 1 Bank of Montreal A+1 795 Canadian Dollar 520 Euro Currency 0.654 07/14/2020 1 State Street Bank and Trust Co. AA-1 138 Canadian Dollar 90 Euro Currency 0.654 07/14/2020 - Bank of Montreal A+1 84 Canadian Dollar 55 Euro Currency 0.655 07/14/2020 - State Street Bank and Trust Co. AA-1 536 Canadian Dollar 350 Euro Currency 0.654 07/14/2020 - State Street Bank and Trust Co. AA-1 161 Canadian Dollar 930 Hong Kong Dollar 5.783 09/08/2020 3 Goldman Sachs Bank USA A+1 24 Canadian Dollar 140 Hong Kong Dollar 5.775 09/08/2020 - State Street Bank and Trust Co. AA-1 19 Canadian Dollar 110 Hong Kong Dollar 5.789 09/08/2020 - Royal Bank of Canada AA-1 47 Canadian Dollar 270 Hong Kong Dollar 5.712 09/08/2020 - Toronto-Dominion Bank AA-1 380 Canadian Dollar 30,440 Japanese Yen 80.038 08/28/2020 4 State Street Bank and Trust Co. AA-1 3,558 Canadian Dollar 63,845 Mexican Peso 17.942 07/14/2020 202 Goldman Sachs Bank USA A+1 404 Canadian Dollar 7,030 Mexican Peso 17.408 07/14/2020 10 State Street Bank and Trust Co. AA-1 676 Canadian Dollar 805 New Zealand Dollar 1.190 07/21/2020 30 Goldman Sachs Bank USA A+1 140 Canadian Dollar 165 New Zealand Dollar 1.176 07/21/2020 5 State Street Bank and Trust Co. AA-1 4,301 Canadian Dollar 32,218 Norwegian Krone 7.490 07/24/2020 241 Toronto-Dominion Bank AA-1 1,595 Canadian Dollar 11,420 Norwegian Krone 7.160 07/24/2020 15 Royal Bank of Canada AA-1 1,425 Canadian Dollar 4,140 Polish Zloty 2.905 07/14/2020 - State Street Bank and Trust Co. AA-1 3,630 Canadian Dollar 2,160 Pound Sterling 0.595 08/28/2020 9 Goldman Sachs Bank USA A+1 3,603 Canadian Dollar 25,660 Swedish Krona 7.122 07/24/2020 152 Canadian Imperial Bank of Commerce A+1 713 Canadian Dollar 5,000 Swedish Krona 7.014 07/24/2020 19 Toronto-Dominion Bank AA-1 2,002 Canadian Dollar 13,780 Swedish Krona 6.884 07/24/2020 15 State Street Bank and Trust Co. AA-1 1,407 Canadian Dollar 9,700 Swedish Krona 6.894 07/24/2020 12 Toronto-Dominion Bank AA-1 773 Canadian Dollar 5,350 Swedish Krona 6.919 07/24/2020 10 Royal Bank of Canada AA-1 1,562 Canadian Dollar 10,680 Swedish Krona 6.838 07/24/2020 1 Goldman Sachs Bank USA A+1 587 Canadian Dollar 410 Swiss Franc 0.698 08/28/2020 3 State Street Bank and Trust Co. AA-1 605 Canadian Dollar 450 U.S. Dollar 0.744 07/15/2020 8 State Street Bank and Trust Co. AA-1 272 Canadian Dollar 200 U.S. Dollar 0.736 07/15/2020 1 Toronto-Dominion Bank AA-1 56,920 Danish Krone 11,773 Canadian Dollar 0.207 07/24/2020 82 Toronto-Dominion Bank AA-1 2,870 Danish Krone 591 Canadian Dollar 0.206 07/24/2020 2 State Street Bank and Trust Co. AA-1 640 Euro Currency 994 Canadian Dollar 1.553 07/14/2020 14 Royal Bank of Canada AA-1 530 Euro Currency 816 Canadian Dollar 1.539 07/14/2020 5 Royal Bank of Canada AA-1 490 Euro Currency 754 Canadian Dollar 1.538 07/14/2020 4 Bank of Montreal A+1 440 Euro Currency 676 Canadian Dollar 1.537 07/14/2020 3 Toronto-Dominion Bank AA-1 630 Euro Currency 966 Canadian Dollar 1.533 07/14/2020 1 Royal Bank of Canada AA-1 820 Euro Currency 1,256 Canadian Dollar 1.532 07/14/2020 1 Royal Bank of Canada AA-1 77,373 Japanese Yen 989 Canadian Dollar 0.013 08/28/2020 11 State Street Bank and Trust Co. AA-1 29,740 Japanese Yen 380 Canadian Dollar 0.013 08/28/2020 5 Goldman Sachs Bank USA A+1 113,598 Japanese Yen 1,440 Canadian Dollar 0.013 08/28/2020 4 State Street Bank and Trust Co. AA-1 54,684 Japanese Yen 693 Canadian Dollar 0.013 08/28/2020 2 State Street Bank and Trust Co. AA-1 490 Pound Sterling 834 Canadian Dollar 1.702 08/28/2020 9 State Street Bank and Trust Co. AA-1 400 Pound Sterling 682 Canadian Dollar 1.704 08/28/2020 8 State Street Bank and Trust Co. AA-



(in $000's)

Schedule of Derivative Instruments (continued)


Rate Due DateFair


Rating of the

Counterparty*

1 1,910 Pound Sterling 3,222 Canadian Dollar 1.687 08/28/2020 4 Goldman Sachs Bank USA A+1 4,450 U.S. Dollar 6,232 Canadian Dollar 1.400 07/15/2020 173 Bank of Montreal A+1 500 U.S. Dollar 701 Canadian Dollar 1.402 07/15/2020 20 Bank of Montreal A+1 330 U.S. Dollar 463 Canadian Dollar 1.402 07/15/2020 13 Toronto-Dominion Bank AA-1 300 U.S. Dollar 422 Canadian Dollar 1.405 07/15/2020 13 State Street Bank and Trust Co. AA-1 200 U.S. Dollar 281 Canadian Dollar 1.404 07/15/2020 9 State Street Bank and Trust Co. AA-1 230 U.S. Dollar 319 Canadian Dollar 1.389 07/15/2020 6 Royal Bank of Canada AA-1 450 U.S. Dollar 619 Canadian Dollar 1.375 07/15/2020 6 Goldman Sachs Bank USA A+1 3,597 U.S. Dollar 274,075 Indian Rupee 76.205 09/08/2020 11 Toronto-Dominion Bank AA-1 495 U.S. Dollar 37,940 Indian Rupee 76.605 09/08/2020 5 Royal Bank of Canada AA-1 2,795 U.S. Dollar 210,295 New Russian Ruble 75.245 07/23/2020 207 Toronto-Dominion Bank AA-1 39 U.S. Dollar 1,140 New Taiwan Dollar 29.300 09/08/2020 - Royal Bank of Canada AA-

1,7111 2,260 Australian Dollar 2,118 Canadian Dollar 0.937 09/15/2020 (3) State Street Bank and Trust Co. AA-1 940 Australian Dollar 877 Canadian Dollar 0.933 09/15/2020 (5) Toronto-Dominion Bank AA-1 980 Canadian Dollar 640 Euro Currency 0.653 07/14/2020 (1) State Street Bank and Trust Co. AA-1 2,802 Canadian Dollar 1,830 Euro Currency 0.653 07/14/2020 (1) Bank of Montreal A+1 652 Canadian Dollar 425 Euro Currency 0.652 07/14/2020 (1) Toronto-Dominion Bank AA-1 707 Canadian Dollar 460 Euro Currency 0.651 07/14/2020 (3) State Street Bank and Trust Co. AA-1 738 Canadian Dollar 480 Euro Currency 0.651 07/14/2020 (3) State Street Bank and Trust Co. AA-1 951 Canadian Dollar 5,415 Hong Kong Dollar 5.695 09/08/2020 - Royal Bank of Canada AA-1 792 Canadian Dollar 4,500 Hong Kong Dollar 5.680 09/08/2020 (2) State Street Bank and Trust Co. AA-1 1,404 Canadian Dollar 3,530 Israeli Sheqel 2.514 08/28/2020 (13) Bank of Montreal A+1 622 Canadian Dollar 49,186 Japanese Yen 79.036 08/28/2020 (1) Royal Bank of Canada AA-1 546 Canadian Dollar 42,930 Japanese Yen 78.637 08/28/2020 (3) Bank of Montreal A+1 589 Canadian Dollar 46,230 Japanese Yen 78.497 08/28/2020 (5) State Street Bank and Trust Co. AA-1 573 Canadian Dollar 44,966 Japanese Yen 78.470 08/28/2020 (5) Royal Bank of Canada AA-1 693 Canadian Dollar 53,983 Japanese Yen 77.848 08/28/2020 (11) State Street Bank and Trust Co. AA-1 14,064 Canadian Dollar 1,095,516 Japanese Yen 77.896 08/28/2020 (220) Royal Bank of Canada AA-1 125 Canadian Dollar 2,100 Mexican Peso 16.821 07/14/2020 (1) State Street Bank and Trust Co. AA-1 132 Canadian Dollar 2,145 Mexican Peso 16.246 07/14/2020 (6) State Street Bank and Trust Co. AA-1 396 Canadian Dollar 235 Pound Sterling 0.593 08/28/2020 - State Street Bank and Trust Co. AA-1 713 Canadian Dollar 420 Pound Sterling 0.589 08/28/2020 (6) Toronto-Dominion Bank AA-1 1,323 Canadian Dollar 776 Pound Sterling 0.586 08/28/2020 (16) Bank of Montreal A+1 89 Canadian Dollar 65 U.S. Dollar 0.734 07/15/2020 - Royal Bank of Canada AA-1 137 Canadian Dollar 100 U.S. Dollar 0.731 07/15/2020 (1) Bank of Montreal A+1 28 Canadian Dollar 20 U.S. Dollar 0.715 07/15/2020 (1) Bank of Montreal A+1 334 Canadian Dollar 245 U.S. Dollar 0.733 07/15/2020 (1) Royal Bank of Canada AA-1 42 Canadian Dollar 30 U.S. Dollar 0.718 07/15/2020 (1) State Street Bank and Trust Co. AA-1 49 Canadian Dollar 35 U.S. Dollar 0.713 07/15/2020 (1) State Street Bank and Trust Co. AA-1 83 Canadian Dollar 60 U.S. Dollar 0.719 07/15/2020 (2) State Street Bank and Trust Co. AA-1 49 Canadian Dollar 35 U.S. Dollar 0.707 07/15/2020 (2) Goldman Sachs Bank USA A+1 97 Canadian Dollar 70 U.S. Dollar 0.718 07/15/2020 (2) Toronto-Dominion Bank AA-1 112 Canadian Dollar 80 U.S. Dollar 0.713 07/15/2020 (3) Bank of Montreal A+1 120 Canadian Dollar 85 U.S. Dollar 0.711 07/15/2020 (4) Royal Bank of Canada AA-1 113 Canadian Dollar 80 U.S. Dollar 0.709 07/15/2020 (4) Royal Bank of Canada AA-1 161 Canadian Dollar 115 U.S. Dollar 0.716 07/15/2020 (4) Toronto-Dominion Bank AA-1 358 Canadian Dollar 260 U.S. Dollar 0.725 07/15/2020 (4) Goldman Sachs Bank USA A+1 444 Canadian Dollar 320 U.S. Dollar 0.720 07/15/2020 (9) State Street Bank and Trust Co. AA-1 418 Canadian Dollar 300 U.S. Dollar 0.718 07/15/2020 (9) State Street Bank and Trust Co. AA-1 703 Canadian Dollar 500 U.S. Dollar 0.711 07/15/2020 (22) Royal Bank of Canada AA-1 704 Canadian Dollar 500 U.S. Dollar 0.710 07/15/2020 (24) State Street Bank and Trust Co. AA-



(in $000's)

Schedule of Derivative Instruments (continued)


Rate Due DateFair


Rating of the

Counterparty*

1 743 Canadian Dollar 525 U.S. Dollar 0.706 07/15/2020 (28) Bank of Montreal A+1 807 Canadian Dollar 570 U.S. Dollar 0.707 07/15/2020 (31) Toronto-Dominion Bank AA-1 495 Danish Krone 102 Canadian Dollar 0.205 07/24/2020 - State Street Bank and Trust Co. AA-1 860 Danish Krone 176 Canadian Dollar 0.204 07/24/2020 (1) Royal Bank of Canada AA-1 185 Euro Currency 282 Canadian Dollar 1.523 07/14/2020 (2) Royal Bank of Canada AA-1 800 Euro Currency 1,222 Canadian Dollar 1.528 07/14/2020 (2) State Street Bank and Trust Co. AA-1 490 Euro Currency 748 Canadian Dollar 1.526 07/14/2020 (2) State Street Bank and Trust Co. AA-1 430 Euro Currency 654 Canadian Dollar 1.520 07/14/2020 (4) State Street Bank and Trust Co. AA-1 2,310 Euro Currency 3,514 Canadian Dollar 1.521 07/14/2020 (21) Goldman Sachs Bank USA A+1 3,540 Hong Kong Dollar 617 Canadian Dollar 0.174 09/08/2020 (5) Royal Bank of Canada AA-1 4,920 Hong Kong Dollar 856 Canadian Dollar 0.174 09/08/2020 (8) State Street Bank and Trust Co. AA-1 3,200 Hong Kong Dollar 552 Canadian Dollar 0.172 09/08/2020 (10) Toronto-Dominion Bank AA-1 131,325 Hong Kong Dollar 22,906 Canadian Dollar 0.174 09/08/2020 (153) State Street Bank and Trust Co. AA-1 77,884 Japanese Yen 966 Canadian Dollar 0.012 08/28/2020 (18) Toronto-Dominion Bank AA-1 3,340 Mexican Peso 195 Canadian Dollar 0.058 07/14/2020 (2) Royal Bank of Canada AA-1 12,930 New Taiwan Dollar 440 U.S. Dollar 0.034 09/08/2020 (5) Toronto-Dominion Bank AA-1 137,315 New Taiwan Dollar 4,617 U.S. Dollar 0.034 09/08/2020 (127) Toronto-Dominion Bank AA-1 405 Singapore Dollar 394 Canadian Dollar 0.972 09/22/2020 (2) Canadian Imperial Bank of Commerce A+1 125,000 South Korean Won 104 U.S. Dollar 0.001 08/27/2020 - Royal Bank of Canada AA-1 222,995 South Korean Won 180 U.S. Dollar 0.001 08/27/2020 (8) Royal Bank of Canada AA-1 2,104,615 South Korean Won 1,710 U.S. Dollar 0.001 08/27/2020 (59) Toronto-Dominion Bank AA-1 2,275 Swedish Krona 330 Canadian Dollar 0.145 07/24/2020 (3) State Street Bank and Trust Co. AA-1 210 Swiss Franc 300 Canadian Dollar 1.429 08/28/2020 (2) Royal Bank of Canada AA-1 6,590 Swiss Franc 9,452 Canadian Dollar 1.434 08/28/2020 (40) State Street Bank and Trust Co. AA-1 1,280 Swiss Franc 1,787 Canadian Dollar 1.396 08/28/2020 (57) Goldman Sachs Bank USA A+1 30 U.S. Dollar 41 Canadian Dollar 1.356 07/15/2020 - Royal Bank of Canada AA-1 100 U.S. Dollar 136 Canadian Dollar 1.360 07/15/2020 - State Street Bank and Trust Co. AA-1 95 U.S. Dollar 129 Canadian Dollar 1.359 07/15/2020 - Goldman Sachs Bank USA A+1 200 U.S. Dollar 272 Canadian Dollar 1.360 07/15/2020 - Toronto-Dominion Bank AA-1 350 U.S. Dollar 475 Canadian Dollar 1.357 07/15/2020 (2) State Street Bank and Trust Co. AA-1 860 U.S. Dollar 1,150 Canadian Dollar 1.338 07/15/2020 (21) Toronto-Dominion Bank AA-1 2,003 U.S. Dollar 28,869,660 Indonesian Rupiah 14,410.000 09/23/2020 (59) Toronto-Dominion Bank AA-

(1,072)Total Forward Currency Contracts 639

* Source: Standard & Poor's Credit Rating Agency

FUTURES CONTRACTS

Description Type Contracts Expiration dateNotional Amount

Fair Value ($)

MSCI EAFE Index Futures Long 20 09/18/2020 USD 2,421 5Total Futures Contracts 5Total for Schedule of Derivative Instruments 644


MD International Growth FundFinancial Statements

The accompanying notes are an integral part of these financial statements.

Statement of Financial Position (unaudited)(in $000's except for units outstanding and per unit amounts)

June 30, 2020

December 31, 2019

AssetsCurrent assetsInvestments $ 274,300 $ 278,509Cash 8,906 6,721Dividends and interest receivable 1,477 1,065Financial derivative instruments 1,499 1,452Net margin and collateral due from broker

on futures contracts 262 58Receivable for investment transactions - 279Subscriptions receivable 7 75

286,451 288,159

LiabilitiesCurrent liabilitiesPayable for investment transactions 23 -Redemptions payable 16 241Financial derivative instruments 855 841

894 1,082

Net assets attributable to holders of redeemable units $ 285,557 $ 287,077

Net assets attributable to holders of redeemable units per series

Series A $ 56,448 $ 60,119Series D $ 707 $ 680Series F $ 55,774 $ 53,879Series I $ 172,628 $ 172,399

Number of redeemable units outstanding (see Supplementary Schedules)Series A 4,447,436 4,750,248Series D 64,715 62,509Series F 4,701,890 4,565,351Series I 13,580,291 13,625,225

Net assets attributable to holders of redeemable units per unit, per series

Series A $ 12.69 $ 12.66Series D $ 10.92 $ 10.87Series F $ 11.86 $ 11.80Series I $ 12.71 $ 12.65

Statement of Comprehensive Income (unaudited)for the periods ended June 30 (in $000’s except for per unit amounts)

2020 2019

IncomeNet gain (loss) on investments

Dividends $ 3,854 $ 5,124Interest for distribution purposes 38 45Net realized gain (loss) on sale of investments 3,615 2,846Change in unrealized appreciation (depreciation) of

investments (1,772) 19,639Net gain (loss) on investments 5,735 27,654

Net gain (loss) on derivative instrumentsNet realized gain (loss) on derivative instruments (1,812) 961Change in unrealized appreciation (depreciation) of

derivative instruments 33 (199)Net gain (loss) on derivatives instruments (1,779) 762

Other IncomeForeign exchange gain (loss) on cash (10) (103)Securities lending (see Supplementary Schedules) 2 16Other 1 2

Total other income (7) (85)Total income (loss) 3,949 28,331

ExpensesManagement fees (Note 4) 673 730Administration fees 119 120Withholding tax on foreign income 440 472Transaction costs 29 77Total expenses 1,261 1,399

Increase (decrease) in net assets attributable to holders of redeemable units $ 2,688 $ 26,932

Increase (decrease) in net assets attributable to holders of redeemable units per series

Series A $ 52 $ 6,857Series D $ 3 $ 34Series F $ 464 $ 4,872Series I $ 2,169 $ 15,169

Increase (decrease) in net assets attributable to holders of redeemable units per unit, per series

Series A $ 0.01 $ 1.22Series D $ 0.05 $ 0.99Series F $ 0.10 $ 1.15Series I $ 0.16 $ 1.33




Statement of Changes in Net Assets Attributable to Holders of Redeemable Units ("Net Assets") (unaudited)for the periods ended June 30 (in $000’s)

2020 2019

SERIES ANet assets - beginning of period $ 60,119 $ 65,812

Add (deduct) changes during the period:Operations

Increase (decrease) in net assets attributable to holders of redeemable units 52 6,857

Redeemable unit transactionsProceeds from issue of redeemable units 2,177 1,866Cash paid for redemption of redeemable units (5,900) (11,180)Units issued on reinvestment of distributions - 282

(3,723) (9,032)Distributions

From net investment income - (288)- (288)

Net assets - end of period $ 56,448 $ 63,349

SERIES DNet assets - beginning of period $ 680 $ 612


Increase (decrease) in net assets attributable to holders of redeemable units 3 34

Redeemable unit transactionsProceeds from issue of redeemable units 117 193Cash paid for redemption of redeemable units (93) (436)Units issued on reinvestment of distributions 1 2

25 (241)Distributions

From net investment income (1) (3)(1) (3)

Net assets - end of period $ 707 $ 402

2020 2019

SERIES FNet assets - beginning of period $ 53,879 $ 40,441


Increase (decrease) in net assets attributable to holders of redeemable units 464 4,872

Redeemable unit transactionsProceeds from issue of redeemable units 4,313 7,522Cash paid for redemption of redeemable units (2,881) (3,326)Units issued on reinvestment of distributions 157 425

1,589 4,621Distributions

From net investment income (158) (428)(158) (428)


SERIES INet assets - beginning of period $ 172,399 $ 130,110


Increase (decrease) in net assets attributable to holders of redeemable units 2,169 15,169

Redeemable unit transactionsProceeds from issue of redeemable units 1,841 135Cash paid for redemption of redeemable units (3,781) (14,820)Units issued on reinvestment of distributions 1,318 1,929

(622) (12,756)Distributions

From net investment income (1,318) (1,929)(1,318) (1,929)





Statement of Changes in Net Assets Attributable to Holders of Redeemable Units ("Net Assets") (unaudited) (Continued)for the periods ended June 30 (in $000’s)

2020 2019

TOTAL FUNDNet assets - beginning of period $ 287,077 $ 236,975


Increase (decrease) in net assets attributable to holders of redeemable units 2,688 26,932

Redeemable unit transactionsProceeds from issue of redeemable units 8,448 9,716Cash paid for redemption of redeemable units (12,655) (29,762)Units issued on reinvestment of distributions 1,476 2,638

(2,731) (17,408)Distributions

From net investment income (1,477) (2,648)(1,477) (2,648)


Statement of Cash Flows (unaudited)for the periods ended June 30 (in $000’s)

2020 2019

Cash flows from (used in) operating activities

Increase (decrease) in net assets attributable to holders of redeemable units $ 2,688 $ 26,932

Adjustments for:Proceeds from sale of investments 36,059 71,188Purchase of investments (29,705) (55,996)Amortization income - (25)Unrealized foreign exchange (gain) loss on cash (9) 1Net realized (gain) loss on sale of investments (3,615) (2,846)Change in unrealized (appreciation) depreciation

of investments 1,772 (19,639)Change in unrealized (appreciation) depreciation

of derivative instruments (33) 199

Net change in non-cash working capital (616) (754)

Net cash from (used in) operating activities 6,541 19,060

Cash flows from (used in) financing activities

Proceeds from issue of redeemable units 6,602 6,442Distributions to holders of redeemable units, net

of reinvested distribution (1) -Cash paid for redemption of redeemable units (10,966) (26,411)

Net cash from (used in) financing activities (4,365) (19,969)

Unrealized foreign exchange gain (loss) on cash 9 (1)

Net increase (decrease) in cash during the period 2,185 (910)

Cash, beginning of period 6,721 3,754

Cash, end of period $ 8,906 $ 2,844

Interest received 45 45Dividends received, net of withholding taxes 2,995 3,843


MD International Growth FundFinancial Statements – Supplementary Schedules (unaudited)

Redeemable Unit Transactionsfor the periods ended June 30

2020 2019

SERIES AOutstanding, beginning of period 4,750,248 6,054,750Issued 177,334 182,354Redeemed (480,146) (963,782)Outstanding, end of period 4,447,436 5,273,322

SERIES DOutstanding, beginning of period 62,509 66,153Issued 11,436 19,080Redeemed (9,230) (45,996)Outstanding, end of period 64,715 39,237

SERIES FOutstanding, beginning of period 4,565,351 4,007,113Issued 393,454 738,591Redeemed (256,915) (311,154)Outstanding, end of period 4,701,890 4,434,550

SERIES IOutstanding, beginning of period 13,625,225 12,014,329Issued 252,171 173,210Redeemed (297,105) (1,267,997)Outstanding, end of period 13,580,291 10,919,542

Securities on Loan

(in $000's) June 30,2020 2019

Fair value of securities loaned $ - $ -Fair value of collateral (non-cash) $ - $ -

State Street Bank and Trust Co. is entitled to receive payments out of the gross amount generated from the securities lending transactions of the Fund and bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification.

The table below sets out a reconciliation of the gross amount generated from the securities lending transactions of the Fund to the revenue from securities lending disclosed under securities lending income in the Fund’s Statement of Comprehensive Income.

for the periods ended June 30 (in $000's) 2020 2019

Gross amount generated from the securities lending transactions $ 4 $ 20

Amounts paid to State Street Bank and Trust Co. $ (2) $ (4)

Net securities lending income as reported in the Statement of Comprehensive Income $ 2 $ 16

Investment in Unconsolidated Structured Entities

As at Structure Type

Number of Investee

Funds

Net Asset Value of Investee Funds

(in Billions)

Fair Value of Fund's

Investment in Underlying Funds

(in thousands)

June 30, 2020

Exchange Traded Funds 1 61.86 18,353

December 31, 2019

Exchange Traded Funds 1 83.56 16,586

Amounts Subject to Master Netting Arrangements(in $000's)

In the normal course of business, the Fund enters into various enforceable master netting arrangements with its derivative counterparties.

The following tables present the Fund's financial assets and liabilities subject to enforceable master netting arrangements. The tables are presented by financial instrument type.

FINANCIAL ASSETS

Gross Asset

Gross Liabilities

Offset

Net Amounts

Presented

Financial Instruments Eligible for

Offset Net

June 30, 2020Derivative assets $ 1,716 $ 217 $ 1,499 $ 488 $ 1,011December 31, 2019Derivative assets $ 1,606 $ 154 $ 1,452 $ 717 $ 735

FINANCIAL LIABILITIES

Gross Liability

Gross Liabilities

Offset

Net Amounts

Presented

Financial Instruments Eligible for

Offset Net

June 30, 2020Derivative liabilities $ 1,072 $ 217 $ 855 $ 488 $ 367December 31, 2019Derivative liabilities $ 995 $ 154 $ 841 $ 717 $ 124


MD International Growth FundFinancial Instruments Risks (unaudited)

(in $000's)

Financial InstrumentsMD International Growth Fund (the “Fund”) invests in a diversified portfolio of global equity securities as well as forward and futures contracts, as shown in the Schedule of Investment Portfolio. The Fund invests excess cash in high grade short-term notes with maturities of less than one year. These investments expose the Fund to risks associated with financial instruments. The Fund’s exposure and sensitivity to these risks are presented below. A description of the risks and how the Fund manages these risks is discussed in Note 8 of the Notes to the Financial Statements.

Credit RiskThe Fund’s credit risk is concentrated in investments in short-term debt and derivative instruments. The Fund’s maximum exposure to credit risk from short-term debt is the carrying value as presented on the Schedule of Portfolio Investments and the cash as shown on the Statement of Financial Position. The Fund’s maximum exposure to credit risk from derivative instruments is the carrying value of financial derivative instrument asset as presented on the Statement of Financial Position.

As at June 30, 2020 and December 31, 2019, the Fund invested in preferred shares and short-term debt instruments with the following credit ratings:

Credit Rating

% of Net Assets Attributable to

Holders of Redeemable Units

June 30, 2020

% of Net Assets Attributable to

Holders of Redeemable Units December 31, 2019

Preferred SharesPfd-1 0.6% 0.5%Unrated 0.8% 1.1%Total 1.4% 1.6%

All credit ratings are from external credit rating agencies such as Dominion Bond Rating Service, Standard & Poor’s and Moody’s.

Currency RiskExposures to foreign currencies as at June 30, 2020 and December 31, 2019 are presented in the table below. Short-term investments, which are monetary in nature, are included in the Investments at Fair Value column.

Currency

Cash and Other Net

Assets Attributable to Holders

of Redeemable

UnitsInvestments at Fair Value

Derivative Exposure

Net Currency Exposure

% of Net Assets

Attributable to Holders

of Redeemable

Units

June 30, 2020U.S. Dollar $ 2,000 $ 36,360 $ (7,248) $ 31,112 10.90%European Euro 373 65,019 8,341 73,733 25.82%Australian Dollar - 4,875 12,778 17,653 6.18%Danish Krone 117 18,993 (12,553) 6,557 2.30%Hong Kong Dollar 96 18,403 (23,111) (4,612) (1.61)%Indian Rupee - - 5,587 5,587 1.96%

Currency

Cash and Other Net

Assets Attributable to Holders

of Redeemable

UnitsInvestments at Fair Value

Derivative Exposure

Net Currency Exposure

% of Net Assets

Attributable to Holders

of Redeemable

Units

Indonesian Rupiah - - 2,669 2,669 0.93%

Israeli Shekel - - 1,391 1,391 0.49%Japanese Yen 44 52,723 12,763 65,530 22.95%Mexican Peso - - 4,228 4,228 1.48%New Russian

Ruble - - 4,012 4,012 1.40%New Taiwan Dollar 15 2,363 (6,962) (4,584) (1.61)%New Zealand

Dollar - - 851 851 0.30%Norwegian Krone - - 6,152 6,152 2.15%Polish Zloty - - 1,425 1,425 0.50%British Pound - 36,291 1,333 37,624 13.18%Singapore Dollar - 3,516 (396) 3,120 1.09%South Korean

Won - 2,979 (2,783) 196 0.07%Swedish Krona - 2,855 9,934 12,789 4.48%Swiss Franc 715 29,923 (11,047) 19,591 6.86%Total $ 3,360 $ 274,300 $ 7,364 $ 285,024 99.82%

December 31, 2019U.S. Dollar $ 1,020 $ 33,010 $ (7,177) $ 26,853 9.36%European Euro 259 68,129 6,290 74,678 26.01%Australian Dollar - 5,405 10,182 15,587 5.43%Danish Krone 102 15,041 (10,222) 4,921 1.72%Hong Kong Dollar - 20,219 (22,449) (2,230) (0.78)%Indian Rupee - - 5,336 5,336 1.86%Indonesian

Rupiah - - 2,766 2,766 0.96%Israeli Shekel - - 1,501 1,501 0.52%Japanese Yen 45 51,572 16,139 67,756 23.60%Mexican Peso - - 2,778 2,778 0.97%New Russian

Ruble - - 4,298 4,298 1.50%New Taiwan Dollar 14 2,405 (6,980) (4,561) (1.59)%New Zealand

Dollar - - 761 761 0.27%Norwegian Krone - - 7,416 7,416 2.58%British Pound 30 42,046 2,403 44,479 15.49%Singapore Dollar - 3,998 (3,342) 656 0.23%South Korean

Won - 3,006 (2,780) 226 0.08%Swedish Krona - 3,221 7,805 11,026 3.84%Swiss Franc 536 30,457 (7,963) 23,030 8.02%Total $ 2,006 $ 278,509 $ 6,762 $ 287,277 100.07%



(in $000's)

As at June 30, 2020, if the Canadian Dollar had strengthened against all other currencies by 10%, the Net Assets Attributable to Holders of Redeemable Units of the Fund could have decreased by approximately $28,502 or 9.98% of Net Assets Attributable to Holders of Redeemable Units (December 31, 2019 – $28,728, or 10.01%). Conversely, had the Canadian Dollar weakened against all other currencies by 10%, the Net Assets Attributable to Holders of Redeemable Units of the Fund could have increased by approximately $28,502 or 9.98% of Net Assets Attributable to Holders of Redeemable Units (December 31, 2019 – $28,728, or 10.01%). These sensitivities are estimates. Actual results may vary and the variance may be material.

Interest Rate RiskThe majority of the Fund’s financial assets are non-interest bearing. The maturity dates of the interest-bearing assets held by the Fund are less than one year. Therefore, the Fund’s exposure to interest rate risk is not significant.

Liquidity RiskThe Fund’s financial liabilities are all due within one year. Redeemable units are redeemable on demand at the holder’s option; however, the Fund does not expect the contractual maturity will be representative of the actual cash outflows, as holders of these instruments typically retain them for a longer period.

Other Price RiskAs at June 30, 2020, 96.1% (December 31, 2019 – 97.0%) of the Fund’s Net Assets Attributable to Holders of Redeemable Units were invested in equity financial instruments traded in active markets. If prices of securities traded on these markets decrease by 10%, with all other factors remaining constant, Net Assets Attributable to Holders of Redeemable Units could fall by approximately $27,430 (December 31, 2019 – $27,851). Conversely, if prices increase by 10%, Net Assets Attributable to Holders of Redeemable Units could rise by approximately $27,430 (December 31, 2019 – $27,851). These sensitivities are estimates. Actual results may vary and the variance may be significant.

Concentration RiskConcentration risk arises as a result of the concentration of exposures within the same category. The following table summarizes the Fund’s concentration risk as a percentage of Net Assets Attributable to Holders of Redeemable Units:

Market Segment June 30, 2020 December 31, 2019

Foreign EquitiesAustralia 1.71% 1.88%Belgium 0.25% 0.51%Bermuda 1.16% 1.35%Cayman Islands 2.04% 0.73%China 0.20% 0.25%Denmark 6.65% 5.24%Finland 2.07% 2.37%France 7.85% 8.36%Germany 5.42% 5.73%Hong Kong 5.25% 6.07%Ireland 2.58% 0.89%Italy 0.90% 0.69%Japan 18.46% 17.96%Jersey 1.28% 1.55%Netherlands 3.36% 2.51%Portugal 0.42% 0.58%Singapore 1.23% 1.39%South Korea 1.04% 1.05%Spain 1.59% 2.09%Sweden 1.00% 1.12%Switzerland 11.30% 11.47%Taiwan 2.45% 2.41%United Kingdom 11.43% 15.04%Exchange Traded Funds 6.43% 5.78%Cash and Other Net Assets (Liabilities) 3.93% 2.98%Total 100.00% 100.00%



(in $000's)

Fair Value HierarchyThe following is a summary of the Fund's use of quoted market prices (Level 1), internal models using observable market information as inputs (Level 2), and internal models without observable market information (Level 3) in the valuation of the Fund’s securities. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Quoted Prices in Active Markets

for Identical Assets

Significant Other

Observable Inputs

(Level 1) (Level 2) Total*

June 30, 2020Foreign Equities $ 34,107 $ 240,193 $ 274,300Financial Derivative Instruments –

Assets 5 1,494 1,499Financial Derivative Instruments –

Liabilities - (855) (855)Total $ 34,112 $ 240,832 $ 274,944

December 31, 2019Foreign Equities $ 278,509 $ - $ 278,509Financial Derivative Instruments –

Assets 11 1,441 1,452Financial Derivative Instruments –

Liabilities - (841) (841)Total $ 278,520 $ 600 $ 279,120

*The Fund does not hold any Level 3 investments.

For the period from January 1, 2020 to June 30, 2020, equity investments of approximately $233,075 were transferred from Level 1 to Level 2. For the period from January 1, 2019 to December 31, 2019, equity investments of approximately $228,727 were transferred from Level 2 to Level 1. Transfers are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements


Notes to Financial StatementsFor 6 months ended June 30, 2020 and 2019

1. Name and formation of the FundsESTABLISHMENT OF THE FUNDS

The MD Family of Mutual Funds (individually a “Fund” and collectively the “Funds”) are unincorporated mutual fund trusts formed under the laws of the province of Ontario pursuant to the Declarations of Trust, and the creation dates are as follows:

Series A Series I Series D Series F2 Series F

MD Precision Canadian Balanced Growth Fund (Formerly MD Balanced Fund) September 9, 1992 October 30, 2009 March 19, 2018 May 10, 2017

MD Bond Fund April 6, 1988 October 30, 2009 March 19, 2018 May 10, 2017

MD Short-Term Bond Fund September 19, 1995 October 30, 2009 March 19, 2018 May 10, 2017

MD Precision Canadian Moderate Growth Fund (Formerly MD Dividend Income Fund) September 9, 1992 October 30, 2009 March 19, 2018 May 10, 2017

MD Equity Fund March 1, 1966 October 30, 2009 March 19, 2018 May 10, 2017

MD Dividend Growth Fund January 4, 2007 October 30, 2009 March 19, 2018 May 10, 2017

MD International Growth Fund July 19, 2000 October 30, 2009 March 19, 2018 May 10, 2017

MD International Value Fund January 5, 2004 October 30, 2009 March 19, 2018 May 10, 2017

MD Money Fund July 12,1983 March 19, 2018 May 24, 2017

MD Canadian Equity Fund (Formerly MD Select Fund) October 29, 1993 October 30, 2009 March 19, 2018 May 10, 2017

MD American Growth Fund September 9, 1992 October 30, 2009 March 19, 2018 May 10, 2017

MD American Value Fund July 10, 2000 October 30, 2009 March 19, 2018 May 10, 2017

MD Strategic Yield Fund January 30, 2014 January 30, 2014 March 19, 2018 May 10, 2017

MD Strategic Opportunities Fund January 30, 2014 January 30, 2014 March 19, 2018 May 10, 2017

MD Precision Conservative Portfolio January 6, 2010 March 19, 2018 May 24, 2017 May 10, 2017

MD Precision Balanced Income Portfolio March 27, 2012 March 19, 2018 May 24, 2017 May 10, 2017

MD Precision Moderate Balanced Portfolio January 6, 2010 March 19, 2018 May 24, 2017 May 10, 2017

MD Precision Moderate Growth Portfolio March 27, 2012 March 19, 2018 May 24, 2017 May 10, 2017

MD Precision Balanced Growth Portfolio January 6, 2010 March 19, 2018 May 24, 2017 May 10, 2017

MD Precision Maximum Growth Portfolio January 6, 2010 March 19, 2018 May 24, 2017 May 10, 2017

MD Fossil Fuel Free Bond Fund May 11, 2016 May 11, 2016 March 19, 2018 May 10, 2017

MD Fossil Fuel Free Equity Fund May 11, 2016 May 11, 2016 March 19, 2018 May 10, 2017

MD Precision Conservative Index Portfolio January 2, 2019

MD Precision Moderate Balanced Index Portfolio January 2, 2019

MD Precision Balanced Growth Index Portfolio January 2, 2019

MD Precision Maximum Growth Index Portfolio January 2, 2019

On June 1, 2018, the name of MD Balanced Fund was changed to MD Precision Canadian Balanced Growth Fund and the name of MD Dividend Income Fund was changed to MD Precision Canadian Moderate Growth Fund. On June 14, 2019, the name of MD Select Fund was changed to MD Canadian Equity Fund.



MD Growth Investments Limited ("MD Growth) is a mutual fund corporation incorporated under the laws of Ontario pursuant to the Letters Patent and the series creation dates are as follows:

Series A Series I Series D Series F

MD Growth Investments Limited July 18, 1969 October 30, 2009 May 16, 2018 May 10, 2017

MD Financial Management Inc. (“the Manager”) is the Manager and Trustee of the Funds. As of October 3, 2018, the Manager is a wholly-owned subsidiary of The Bank of Nova Scotia (“Scotiabank”). The address of the Funds’ registered office is 40 King Street West, 8th Floor, Toronto, Ontario.

Throughout these Notes to the Financial Statements, the shares of MD Growth Investments Limited have been referred to as “units” to simplify the presentation.

The financial statements of the Funds include the Statement of Financial Position as of June 30, 2020 and December 31, 2019, as applicable, and the Statement of Comprehensive Income, the Statement of Changes in Net Assets Attributable to Holders of Redeemable Units and the Statement of Cash Flows for the periods ended June 30, 2020 and 2019, except for Funds established during either period, in which case the information provided relates to the period from creation date to June 30, 2020 or 2019. The Schedule of Investment Portfolio for each of the Funds is at June 30, 2020.

These financial statements were authorized for issue by the Manager on August 6, 2020.

SERIES OF UNITS

“Series A” units are available to all MD Management Ltd. clients who are qualified eligible investors.

"Series D" units are available to all MD Management Ltd. clients who are qualified eligible investors and who have an MD Direct Trade™ account with MD Management Ltd.

"Series F" units are available to all MD Management Ltd. clients who are qualified eligible investors and who have a fee-based account with MD Management Ltd. Series F units of MD Money Fund was terminated May 24, 2018.

"Series F2" units are available only to qualified eligible investors who open an MD ExO® Direct account with MD Management Ltd.

“Series I” units were established to support the MD Precision Conservative Portfolio, the MD Precision Moderate Balanced Portfolio, the MD Precision Balanced Growth Portfolio, the MD Precision Maximum Growth Portfolio, the MD Precision Balanced Income Portfolio and the MD Precision Moderate Growth Portfolio. These units are only available to the six Funds listed above and certain institutional investors, and are not charged management fees.

2. Basis of presentationThese financial statements have been prepared in compliance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB). The preparation of these financial statements in accordance with IFRS requires the use of judgment in applying accounting policies and to make estimates and assumptions concerning the future. Significant accounting judgments and estimates made by the Manager are disclosed in Note 7.

3. Significant accounting policiesFUNCTIONAL AND PRESENTATION CURRENCY

The financial statements are presented in Canadian dollars, which is the Funds’ functional currency. Cash, investments and other assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rate of exchange prevailing on each valuation date. Transactions during the year in currencies other than Canadian dollars are translated into Canadian dollars at the rate of exchange prevailing on the trade date of the transaction. The difference in the foreign exchange rate between trade date and settlement date of a transaction is recognized in income on the Statement of Comprehensive Income. Foreign exchange gains and losses relating to cash are presented as “Foreign exchange gain (loss) on cash” and those relating to other financial assets and liabilities are presented within net gains or losses on the sale of investments or derivatives.

All financial information is presented in Canadian dollars and has been rounded to the nearest thousand, unless otherwise stated.

FINANCIAL INSTRUMENTS

The Funds classify and measure financial instruments in accordance with IFRS 9 "Financial Instruments" (IFRS 9). All financial assets and liabilities are recognized in the Statement of Financial Position when the Funds become party to the contractual requirements of the instrument. Financial instruments are derecognized when the right to receive cash flows from the instrument has expired or the Funds have transferred substantially all the risks and rewards of ownership. As such, investment purchase and sale transactions are recorded as of the trade date.

The Funds classify investments, including derivatives, as fair value through profit or loss (FVTPL). Investment classification is based on both the Funds' business model for managing those investments and their contractual cash flow characteristics. The portfolio of investments is managed and performance is evaluatied on a fair value basis in accordance with the Funds’ investment strategy. The Funds are primarily focused on fair value information and use that information to assess performance and to make decisions. The contracual cash flows of the Funds' debt securities are generally principal and interest, however, the collection of contractual cash flows is only incidental to achieving the Funds' business model's objective. Consequently, all investments are measured at FVTPL. Subsequent to initial recognition, investments, including derivatives, are measured at FVTPL. Gains and losses arising from changes in the fair value are included in the Statement of Comprehensive Income for the periods in which they arise.

The Funds' obligation for net assets attributable to holders of redeemable units is measured at FVTPL, with fair value being the redemption amount at the reporting date.

Cash is measured at fair value upon recognition and subsequently at amortized cost.



Other financial assets and liabilities, such as accrued interest and dividends receivable, accounts receivable for investment transactions, subscriptions receivable, amounts receivable for securities lending transactions, distributions payable, accounts payable for investment transactions and redemptions payable are recognized initially at fair value, net of transaction costs, and subsequently stated at amortized cost using the effective interest rate method. Under this method, these financial assets and liabilities reflect the amount required to be received or paid, discounted, when appropriate, at the contracts' effective interest rate.

NET ASSETS VERSUS NET ASSET VALUE

The Funds’ accounting policies for measuring the fair value of their investments and derivatives are identical to those used in measuring the net asset value (NAV) for transactions with unitholders in accordance with Part 14 of National Instruments 81-106 Investment Funds for Continuous Disclosure ("NI 81-106").

INCOME RECOGNITION

Gains and losses arising from changes in fair value of non-derivative financial assets are shown in the Statements of Comprehensive Income as "Change in unrealized appreciation (depreciation) of investments" and as "Net realized gain (loss) on sale of investments" when positions are sold.

Gains and losses arising from changes in fair value of derivatives are shown in the Statement of Comprehensive Income as "Change in unrealized appreciation (depreciation) on derivative instruments" and as Net realized gain (loss) on derivative instruments" when positions are closed out or have expired, where applicable.

The interest for distribution purposes shown on the Statement of Comprehensive Income represents the coupon interest received by the Funds, accounted for on an accrual basis. Dividend income and distributions to unitholders are recorded on the ex-dividend date. Distributions from underlying funds out of interest, foreign income and related withholding taxes, Canadian dividends and net realized capital gains are recognized when declared. Realized gains or losses from investment transactions and the unrealized appreciation or depreciation of investments are computed on an average cost basis, which exclude brokerage commissions and other trading expenses. Brokerage commissions and other trading expenses are charged to income as incurred.

OFFSETTING FINANCIAL INSTRUMENTS

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when the Funds currently have a legally enforceable right to set-off the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. In the normal course of business, the Funds may enter into various master netting agreements or similar agreements that do not meet the criteria for offsetting in the statement of financial position but still allow for the related amounts to be set off in certain circumstances, such as bankruptcy or termination of the contracts. Financial assets and liabilities that are subject to master netting or comparable agreements and the related potential effect of offsetting are disclosed in the respective Fund's "Supplementary Schedules".

Transactions with counterparties are governed by separate master netting agreements. Each agreement allows for net settlement of certain open contracts where the Fund and respective counterparty both elect to settle on a net basis. In the absence of such an election, contracts will be settled on a gross basis. However, each party to the master netting agreement will have the option to settle all open contracts on a net basis in the event of default of the other party.

FAIR VALUE MEASUREMENT

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments are categorized as FVTPL and are recorded at fair value. In the case of securities traded in an active market, fair value is based on quoted market prices at the close of trading on the reporting date as provided by independent pricing services. The Funds use the last traded market price for both financial assets and financial liabilities where the last traded price falls within the day’s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. In the case of investments not traded in an active market, or for those securities for which the Manager feels the latest market prices are not reliable, fair value is estimated based on valuation techniques established by the Manager. Valuation techniques established by the Manager are based on observable market data except in situations where there is no relevant or reliable market data. The value of securities estimated using valuation techniques not based on observable market data, if any, is disclosed in the Financial Instruments Risks section of the financial statements.

FINANCIAL DERIVATIVES INSTRUMENTS

A derivative is a financial contract between two parties, the value of which is derived from the value of an underlying asset such as equity, bond, commodity, interest rate or currency. Certain Funds may use derivatives, such as options, futures, forward contracts, swap contracts, and other similar instruments, in a manner considered appropriate to achieving the Fund’s investment objectives. Derivatives may be used to protect a security price, currency exchange rate or interest rate from negative changes (hedging) or to provide exposure to securities, indices, or currencies without investing in them directly (non-hedging). Derivatives contain various risks including the potential inability for the counterparty to fulfil their obligations under the terms of the contract, the potential for illiquid markets and the potential price risk which may expose the Funds to gains and/or losses in excess of the amounts shown on the Statement of Financial Position. Derivatives with unrealized gains are reported as financial derivative instruments under current assets and derivatives with unrealized losses are reported as financial derivative instruments under current liabilities.

Forward Currency Contracts

Certain Funds may enter into forward currency contracts for either hedging or non-hedging purposes where such activity is consistent with their investment objectives and as permitted by the Canadian securities regulatory authorities. A forward currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. Investments in forward currency contracts are entered into with approved counterparties and are recorded at fair value. The fair value of a forward currency contract fluctuates with changes in foreign currency exchange rates. The fair value of forward currency contracts is reported as financial derivative instruments in the Statement of Financial Position. Forward currency contracts are marked to market daily and the changes in fair value of forward currency contracts are recorded in “Change in unrealized appreciation (depreciation) of derivative instruments”. Upon closing of the contracts, the accumulated gains or losses are reported in “Net realized gain (loss) on sale of derivative instruments”. The contractual amounts of open contracts are disclosed in the Schedule of Investment Portfolio in the Schedule of Derivative Instruments.



Futures Contracts

Futures contracts are valued on each valuation day using the closing market price posted on the related public exchange. The fair value of future contracts is reported as “Financial Derivative Instruments” in the Statement of Financial Position. All gains or losses arising from futures contracts are recorded as part of “Change in unrealized appreciation (depreciation) of derivative instruments” in the Statement of Comprehensive Income until the contracts are closed out or expire, at which time the gains or losses are realized and reported as “Net realized gain (loss) on derivative instruments”.

Credit Default Swaps

Certain Funds may enter into credit default swap contracts, primarily to manage and/or gain exposure to credit risk where such activity is consistent with their investment objectives and as permitted by the Canadian securities regulatory authorities. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, or a tranche of a credit index. The credit risk exposure of a Fund to the referenced asset is comparable to the exposure that would have resulted if the Fund were invested directly in the referenced debt obligation. If the Funds are buyers of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Funds will either (i) receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation or (ii) receive a net settlement amount equal to the notional amount of the credit default swap contract less the recovery amount of value of the referenced debt obligation. If the Funds are sellers of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Funds will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. The maximum credit risk to the Fund as a seller of protection is the notional amount of the contract.

Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments paid or received are accrued daily and are included in the Statement of Comprehensive Income in Net Interest Income (Expense) from Swap Contracts. Credit Default Swaps are disclosed in the Schedule of Derivative Instruments. The change in value of a credit default swap contract and any upfront premium paid or received is included in the Statement of Financial Position as Financial Derivative Instruments. When the credit default swap contracts are closed out, gains or losses, including upfront premiums, are realized and included in the Statement of Comprehensive Income in “Net realized gain (loss) on derivative instruments”. Pursuant to the terms of the credit default swap contract, cash or securities may be required to be deposited as collateral.

Interest Rate Swaps

Certain Funds may enter into interest rate swap contracts, primarily to manage and/or gain exposure to fluctuations in interest rates. An interest rate swap is an agreement between the Fund and a counterparty whereby the parties agree to exchange a fixed payment for a floating payment that is linked to an interest rate and an agreed upon notional amount.

Over the term of the contract, each party will pay to the other party a periodic stream of payments. Such periodic payments paid or received are accrued daily and are included in the Statement of Comprehensive Income in Net Interest Income (Expense) from Swap Contracts. Interest Rate Swaps are disclosed in the Schedule of Derivative Instruments. The change in value of an interest rate swap contract and any upfront premium paid or received is included in the Statement of Financial Position as Financial Derivative Instruments. When the interest rate swap contracts are closed out, gains or losses, as well as any upfront premiums, are realized and included in the Statements of Comprehensive Income in Net realized gain (loss) on derivative instruments.

Total Return Swaps

Certain Funds may enter into total return swap contracts primarily to manage and/or gain exposure to the underlying reference asset. An total return swap is an agreement between the Fund and a counterparty where single or multiple cash flows are exchanged based on the price of an underlying reference asset and based on a fixed or variable rate.

Over the term of the contract, the Funds will pay to the counterparty a periodic stream of payments based on fixed or variable rate. Such periodic payments paid are accrued daily and are included in the Statement of Comprehensive Income in Net Interest Income (Expense) from Swap Contracts. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference asset less a financing rate, if any. As a receiver, the Funds would receive payments based on any net positive total return and would owe payments in the event of a net negative total return. Total return swaps are disclosed in the Schedule of Derivative Instruments. The change in value of an total return swap contract is included in the Statement of Financial Position as Financial Derivative Instruments. When the total return swap contracts are closed out, gains or losses are realized and included in the Statements of Comprehensive Income in Net realized gain (loss) on derivative instruments.

Cross Currency Swaps

Certain Funds may enter into cross currency swap contracts, primarily to manage and/or gain exposure to currency risk. A cross currency swap is an agreement between the Fund and a counterparty whereby the parties agree to exchange interest payments and principal on loans denominated in two different currencies.

Over the term of the contract, each party will pay to the other party a periodic stream of payments. Such periodic payments paid or received are accrued daily and are included in the Statement of Comprehensive Income in Net Interest Income (Expense) from Swap Contracts. Cross currency swaps are disclosed in the Schedule of Derivative Instruments. The change in value of a cross currency swap contract and any upfront premium paid or received is included in the Statement of Financial Position as Financial Derivative Instruments. When the cross currency swap contracts are closed out, gains or losses, as well as any upfront premiums, are realized and included in the Statements of Comprehensive Income in Net realized gain (loss) on derivative instruments.

Foreign Currency Option Contracts

Certain Funds may purchase foreign currency options. Purchasing foreign currency options gives the Fund the right, but not the obligation to buy or sell the currency and will specify the amount of currency and a rate of exchange that may be exercised by a specified date. These options may be used as a hedge against possible variations in foreign exchange rates or to gain exposure to foreign currencies.



Foreign currency option contracts are disclosed in the Schedule of Derivative Instruments. The change in value of a foreign currency option contract and any premiums paid are included in the Statement of Financial Position as Financial Derivative Instruments. When the foreign currency option contracts are closed out, gains or losses, as well as any premiums paid, are realized and included in the Statements of Comprehensive Income in Net realized gain (loss) on derivative instruments.

CAPITAL RISK MANAGEMENT

Units issued and outstanding are considered to be the capital of the Funds. The Funds do not have any specific capital requirements on the subscription and redemption of units, other than certain minimum subscription. The Funds’ units are offered for sale on any business day and may be redeemed or issued at the Net Asset Value (NAV) per unit for the respective series on that business day. A business day refers to any day the Toronto Stock Exchange is open for business. The NAV for each series is computed daily by calculating the value of that series’ proportionate share of net assets and liabilities of the Fund common to all series less liabilities attributable to that series. Expenses directly attributable to a series are charged to that series. Assets, common liabilities, revenues and other expenses are allocated proportionately to each series based upon the relative NAVs of each series. The NAV per unit is determined by dividing the NAV of each series of a Fund by the total number of units of that series outstanding.

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS PER UNIT

“Increase (decrease) in net assets attributable to holders of redeemable units per unit” in the Statement of Comprehensive Income represents the increase or decrease in net assets attributable to holders of redeemable units attributable to each series of units for the period, divided by the weighted average units outstanding in that series during the period.

SECURITIES LENDING TRANSACTIONS

A Fund may lend portfolio securities to earn additional income through a securities lending agreement with its custodian. The aggregate market value of all securities loaned by the Fund cannot exceed 50% of the assets of the Fund. The Fund receives collateral in the form of securities deemed acceptable under National Instrument 81-102, “Mutual Funds” (“NI81-102”) of at least 102% of the fair value of securities on loan. Collateral held is typically government and corporate bonds.

Income from securities lending is recorded as “Securities lending” on a monthly basis when it is receivable. Securities lending details are listed in Securities on Loan included in the supplementary schedules to the financial statements. The securities lending agent earns 20% of the gross income generated through any securities lending transactions in the Funds.

REDEEMABLE UNITS

Certain Funds issue different series of redeemable units, which are redeemable at the holder’s option and do not have identical rights. Such units are classified as financial liabilities. Redeemable units can be put back to the Funds at any date for cash equal to a proportionate share of the Funds’ net asset value attributable to the series. The redeemable units are carried at the redemption amount that is payable at the Statement of Financial Position date if the holder exercises the right to put the unit back to the Funds. Funds with only one series do not meet the criteria to be classified as equity as they impose on the Fund the obligation to deliver cash other than on redemption. Each such Fund must distribute its taxable income to unitholders annually and has provided unitholders the option to receive such distributions in cash.

INVOLVEMENT IN UNCONSOLIDATED STRUCTURED ENTITIES

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.

Certain Funds’ investment strategy entails trading in other funds on a regular basis. The Funds consider all of their investments in other funds (“Investee Funds”) to be investments in unconsolidated structured entities. The Funds invest in Investee Funds whose objectives range from conserving principal to maximizing dividend income to long-term capital growth and whose investment strategies do not include leverage. The Investee Funds finance their operations by issuing redeemable units which are puttable at the holder’s option and entitle the holder to a proportionate stake in the respective Investee Fund’s net assets. The Funds hold redeemable units in each of their Investee Funds and the Funds have the right to request redemption of their investment in Investee Funds daily. The Funds’ investments in Investee Funds are subject to the terms and conditions of the respective Investee Fund’s offering documentation. The change in fair value of each Investee Fund is included in the Statement of Comprehensive Income in “Change in unrealized appreciation (depreciation) of investments”. The Funds’ maximum exposure to loss from their interest in Investee Funds is equal to the fair value of their investments in Investee Funds. Once a Fund has disposed of its shares in an Investee Fund the Fund ceases to be exposed to any risk from that investee fund.

Certain Funds invest in Exchange Traded Funds (“ETFs”) which are disclosed on the Schedule of Investment Portfolio and these Funds have determined that their investments in such ETFs are deemed unconsolidated structured entities. These ETFs replicate, to the extent possible, the performance of the applicable benchmark indices, or seek to provide long-term capital growth or income, as applicable, by investing primarily in and holding the constituent securities of the applicable benchmark indices in substantially the same proportion as they are reflected in the applicable benchmark indices or seek to track the investment results of applicable benchmark indices. The ETFs finance their operations by issuing redeemable shares which are puttable at the holder’s option and entitle the holder to a proportional stake in the respective ETF’s net asset value. The underlying ETFs are listed on a recognized public stock exchange.



Certain Funds invest in mortgage-related and other asset-backed securities (“MBS”). These securities include mortgage pass-through securities, collateralized mortgage obligations, commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and other securities that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property. The debt and equity securities issued by these securities may include tranches with varying levels of subordination. These securities may provide a monthly payment which consists of both interest and principal payments. Mortgage-related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. Asset-backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans. The Funds’ maximum exposure to loss from their interest in MBS is equal to the fair value of their investments in such securities as disclosed on the Schedule of Investment Portfolio.

A table has been included in the “Supplementary Schedules” section of the financial statements which describes the types of structured entities that the Funds do not consolidate but in which they hold an interest.

4. ExpensesMANAGEMENT FEES

The Funds pay the Manager management fees for each series of units, other than Series I. Management fees for Series I units are paid directly by investors. The management fees cover the cost of managing the Funds, arranging for investment analysis, recommendations and investment decision making for the Funds, arranging for distribution of the Funds, marketing and promotoion of the Funds and providing or arranging for others services for the Funds. The management fee is an annualized rate based on the net asset value of each series of the Funds. The management fees paid by the Funds are calculated and accrued daily and payable weekly.

There is no duplication of management fees between the Funds and the Underlying Funds held directly by them, if any. Effective June 13, 2019, the Manager is entitiled to an annual management fee, exclusive of sales taxes, as follows:

Fund Series A Series D Series F Series F2

MD Precision Canadian Balanced Growth Fund (Formerly MD Balanced Fund) 1.24% 0.89% 0.29% -

MD Bond Fund 0.84% 0.50% 0.04% -

MD Short-Term Bond Fund 0.84% 0.45% 0.04% -

MD Growth Investments Limited 1.24% 0.84% 0.29% -

MD Precision Canadian Moderate Growth Fund (Formerly MD Dividend Income Fund) 1.24% 0.89% 0.29% -

MD Equity Fund 1.24% 0.70% 0.29% -


MD Dividend Growth Fund 1.24% 0.85% 0.29% -

MD International Growth Fund 1.59% 0.87% 0.64% -

MD International Value Fund 1.59% 0.87% 0.64% -

MD Money Fund 0.49% 0.23% 0.04% -

MD Canadian Equity Fund (Formerly MD Select Fund) 1.24% 0.70% 0.29% -

MD American Growth Fund 1.24% 0.72% 0.29% -

MD American Value Fund 1.44% 0.72% 0.49% -

MD Strategic Yield Fund* 1.39% 0.45% 0.44% -

MD Strategic Opportunities Fund* 1.64% 0.46% 0.69% -

MD Precision Conservative Portfolio 1.13% 0.52% 0.18% 0.18%

MD Precision Balanced Income Portfolio 1.18% 0.59% 0.23% 0.23%

MD Precision Moderate Balanced Portfolio 1.25% 0.68% 0.30% 0.30%

MD Precision Moderate Growth Portfolio 1.30% 0.72% 0.35% 0.35%

MD Precision Balanced Growth Portfolio 1.32% 0.80% 0.37% 0.37%

MD Precision Maximum Growth Portfolio 1.35% 0.81% 0.40% 0.40%

MD Fossil Fuel Free Bond Fund 0.84% 0.50% 0.04% -

MD Fossil Fuel Free Equity Fund 1.24% 0.87% 0.29% -

MD Precision Conservative Index Portfolio - - - 0.06%

MD Precision Moderate Balanced Index Portfolio - - - 0.12%

MD Precision Balanced Growth Index Portfolio - - - 0.13%

MD Precision Maximum Growth Index Portfolio - - - 0.14%

*The fee disclosed for Series A and Series F is the maximum management fee as disclosed in the simplified prospectus. There was a discretionary reduction in fees for these series and the Manager charged the following: MD Strategic Yield Fund Series A: 1.39% and Series F: 0.04%, MD Strategic Opportunities Fund Series A; 1.64% and Series F: 0.04%.



Prior to June 13, 2019, the Manager was entitled to an annual management, exclusive of sales taxes as follows:



MD Bond Fund 0.85% 0.51% 0.05% -




MD Equity Fund 1.25% 0.71% 0.30% -




MD Money Fund 0.50% 0.24% 0.05% -




MD Strategic Yield Fund 1.40% 0.46% 0.45% -

MD Strategic Opportunities Fund 1.65% 0.47% 0.70% -

MD Precision Conservative Portfolio 1.15% 0.57% 0.20% 0.20%

MD Precision Balanced Income Portfolio 1.20% 0.64% 0.25% 0.25%

MD Precision Moderate Balanced Portfolio 1.30% 0.73% 0.35% 0.35%

MD Precision Moderate Growth Portfolio 1.35% 0.77% 0.40% 0.40%

MD Precision Balanced Growth Portfolio 1.40% 0.88% 0.45% 0.45%

MD Precision Maximum Growth Portfolio 1.45% 0.91% 0.50% 0.50%




MD Precision Conservative Index Portfolio - - - 0.06%

MD Precision Moderate Balanced Index Portfolio - - - 0.12%

MD Precision Balanced Growth Index Portfolio - - - 0.13%

MD Precision Maximum Growth Index Portfolio - - - 0.14%

ADMINISTRATION FEES

The Manager pays certain operating expenses of the Funds in return for administration fees, calculated as a fixed annual percentage of the Funds' net asset value. These expenses include regulatory filing fees and other day-to-day operating expenses including, but not limited to, audit fees, legal fees custodial fees, all expenses related to the prospectus and to meetings of unitholders, expenses related to fund accounting, fund valuation, unitholder reporting and record keeping, IRC fees and other expenses.

The administration fee are accrued daily and paid monthly. The annual rates of the administration fee, which are a percentage of the net asset value for each series of units of each Fund, are as follows:



MD Bond Fund 0.07% 0.07% 0.07% -




MD Equity Fund 0.15% 0.15% 0.15% -




MD Money Fund 0.05% 0.05% 0.05% -




MD Strategic Yield Fund 0.10% 0.10% 0.10% -

MD Strategic Opportunities Fund 0.10% 0.10% 0.10% -




MD Precision Conservative Portfolio 0.13% 0.13% 0.13% -

MD Precision Balanced Income Portfolio 0.13% 0.13% 0.13% -

MD Precision Moderate Balanced Portfolio 0.13% 0.13% 0.13% -

MD Precision Moderate Growth Portfolio 0.13% 0.13% 0.13% -

MD Precision Balanced Growth Portfolio 0.13% 0.13% 0.13% -

MD Precision Maximum Growth Portfolio 0.13% 0.13% 0.13% -



MD Precision Conservative Index Portfolio - - - -

MD Precision Moderate Balanced Index Portfolio - - - -

MD Precision Balanced Growth Index Portfolio - - - -

MD Precision Maximum Growth Index Portfolio - - - -

5. Related Party TransactionsEffective October 3, 2018, the Manager is a wholly-owned subsidiary of The Bank of Nova Scotia ("Scotiabank"). Scotiabank also owns, directly or indirectly, 100% of Scotia Securities Inc. and Tangerine Investment Funds Limited, each a mutual fund dealer, and Scotia Capital Inc. (which includes Scotia McLeod and Scotia iTRADE), an investment dealer.

The Manager, on behalf of the Funds, may enter into transactions or arrangements with other members of Scotiabank or certain companies that are related or connected to the Manager (each a "related party"). All transactions between the Funds and the related parties are in the normal course of business and are carried out at arm's length terms.

• The Manager earns management fees for acting as trustee and manager of the Funds, as applicable and an administration fee in return for paying certain operating expenses as detailed in Note 4. The management fee and administration fee are disclosed in separate lines in the Statement of Comprehensive Income.

• Decisions about the purchase and sale of each Fund's portfolio investments are made by appointed Portfolio Managers of each Fund. Provided that the pricing, service and other terms are comparable to those offered by other dealers, a portion of the portfolio transactions may be executed for the Funds by a related party to the Funds. In such cases, the related party will receive commisions from the Funds. Brokerage fees paid to related parties for the period ended June 30, 2020 and 2019 are as follows (in $000's):

Fund June 30, 2020 June 30, 2019

MD Precision Canadian Balanced Growth Fund (Formerly MD Balanced Fund) 9 2

MD Precision Canadian Moderate Growth Fund (Formerly MD Dividend Income Fund) 28 5

MD Equity Fund 46 17

MD Dividend Growth Fund 15 6

MD Canadian Equity Fund (Formerly MD Select Fund) 11 -

MD Strategic Yield Fund 4 -

MD Strategic Opportunities Fund 3 3

• The Manager received approval from the Independent Review Committee to invest the Funds' overnight cash with Scotiabank with interest paid by Scotiabank to the Funds based on prevailing market rates. The interest earned by the Funds is included in "Interest for distribution purposes" in the Statement of Comprehensive Income.

• The Funds may invest in investment funds managed by the Manager, which are disclosed in the Schedule of Investment Portfolio for the respective Funds.

• Units held by the Manager in the Funds as at June 30, 2020 and December 31, 2019 are disclosed below:

Fund June 30, 2020December 31,

2019

MD Precision Conservative Index Portfolio—Series F2 - 10,000

MD Precision Moderate Balanced Index Portfolio—Series F2 - 10,000

MD Precision Balanced Growth Index Portfolio—Series F2 - 10,000

MD Precision Maximum Growth Index Portfolio—Series F2 - 10,000

• The Manager has received approval from the Independent Review Committee for the Funds to purchase securities of related parties, such as investments in securities of Scotiabank. Any related party securities held by the Funds are disclosed in the Schedule of Investment Portfolio for the respective Funds. The Funds are also permitted to enter into derivative transactions with Scotiabank as counterparty.

• Distributions received from related party funds are included in "Income from Underlying Funds" in the statement of comprehensive income.



INDEPENDENT REVIEW COMMITTEE

The Manager has established an Independent Review Committee (“IRC”) as required under National Instrument 81-107, “Independent Review Committee for Investment Funds” (“81-107”). The IRC reviews conflict of interest matters related to the operations of the Funds. In addition, in some circumstances, in place of obtaining unitholder approval, a Fund may be reorganized with or its assets transferred to another mutual fund managed by the Manager or an affiliate. This requires IRC approval, and that unitholders are sent a written notice at least 60 days before the effective date. The approval of the IRC is also required for a change of auditor.

The IRC is composed of five persons who are independent of the Manager, the Funds and entities related to the Manager.

The Manager pays all IRC fees on behalf of the Funds and allocates these fees equally across each Fund. The Manager recovers these costs via the administration fee charged to the Funds. For the period ended June 30, 2020, each Fund managed by the Manager paid approximaterly $1,000 in IRC Fees.

SHORT-TERM TRADING/EARLY REDEMPTION FEE

Clients who redeem or switch units or shares of an MD Fund a

md family of funds - june 2020 · 2020. 8. 26. · 1 800 267-2332, by writing to us at md financial...

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