There are two primary sources of return in an actively-managed portfolio:

1. Beta: The return that comes from being exposed to a particular market, and

2. Alpha: Any added or subtracted value that comes from being in particular securities within that market.

Portable Alpha strategies involve transferring the added value (alpha) of one portfolio to another without disrupting either portfolio. This enables investors to separate the decision of where to allocate active risk from the policy benchmark decision. TD Asset Management was among the first investment management firms to provide portable-alpha services to Canadian investors.

We believe that these types of solutions are an excellent substitute in allocations to traditional asset classes (such as bonds and U.S. equities). By offering volatility ranges that are similar to these respective asset classes, but with added value on top of the core return, these solutions can offer significant risk/reward improvements to the institutional investor.