Td Asset Management Inc rotates from mega-cap tech into energy and defensives

The biggest adds are not speculative fliers; they are high-quality, cash-generative compounds the desk clearly wants more of into volatility.

• Johnson & Johnson was pushed aggressively higher, with the position up 192.9% and an estimated +$735.0M added, turning it into a cornerstone health-care defensive at 0.91% of the book. That scale-up, alongside a small lift in Eli Lilly, says they want drug pricing power and durable earnings to sit opposite their tech cyclicality.
• In semis, they are leaning into the plumbing of AI: Lam Research nearly doubled (+94.6%, +$317.6M), even as they modestly added to NVIDIA (+3.8%, +$184.8M). Rather than chase new AI darlings, they are concentrating into the manufacturing tools most levered to wafer capacity.
• Alphabet was a notable software add on both share classes (GOOGL +9.3%, +$186.7M; GOOG +3.3%, +$40.3M), signalling they still like scaled ad and cloud platforms but prefer it over marginal names.
• On the real-asset side, Suncor (+10.7%, +$162.0M), Exxon (+17.0%, +$138.1M), and Canadian Natural Resources (+5.3%, +$97.0M) were all topped up, as were pipeline names like Enbridge and TC Energy. That is a coherent energy-income view: own integrated producers and midstream pipes as inflation-protected yield.
• They also leaned further into Costco (+24.6%, +$184.3M) and Shopify (+9.9%, +$101.8M) — a very specific expression of retail and e‑commerce resilience, rather than a broad consumer beta bet.

Funding for these adds came from a disciplined harvest of prior winners and some cooling on U.S. financial risk.

• In mega-cap tech, Microsoft (-6.3%, -$218.9M), Meta (-13.2%, -$217.5M), Apple (-3.6%, -$155.0M), and Broadcom (-6.8%, -$148.5M) were all trimmed. These names still carry large embedded gains versus average cost, so the pattern looks like classic risk management: cut into strength and free up dollars for higher-conviction entry points like Lam Research and Johnson & Johnson.
• They also took a knife to the most index-like tech exposure. Invesco QQQ was cut -7.4% (-$44.4M), even as SPY and EFA were modestly increased. The message: keep some broad U.S. and developed-market beta, but dial down concentrated Nasdaq exposure in favor of chosen single-name tech.
• On the financials side, JPMorgan (-11.3%, -$163.3M), American Express (-15.0%, -$90.6M), and Sun Life (-8.6%, -$82.6M) were notable trims. Royal Bank and Bank of Montreal were clipped at the margin, while Toronto-Dominion and Bank of Nova Scotia were quietly increased, implying a preference shift back toward core Canadian franchises.
• Smaller risk-off moves show up in Brookfield Asset Management (-15.0%, -$104.8M) and various industrials like Howmet (-11.9%, -$66.7M) and Curtiss-Wright (-8.3%, -$43.6M). None of these are thesis reversals; they read as incremental de-risking to fund the health-care, energy, and tools tilt.

The sector chart confirms a subtle but deliberate rotation rather than a wholesale style flip.

Technology still dominates at 30.47%, but with weight down from 30.9% despite big adds to Lam Research, Alphabet, NVIDIA, and Shopify. That means the net effect of cutting Microsoft, Meta, Broadcom, Apple, KLA, and Curtiss-Wright was to shift tech exposure internally from mega-cap ad/software platforms toward AI manufacturing and select growth compounders.

Finance slipped roughly 0.85 percentage points to 25.41%, reflecting trims in JPMorgan, American Express, Sun Life, and slight reductions in several Canadian banks. Yet they added to Toronto-Dominion, Bank of Nova Scotia, and Manulife — a rotation within the sleeve toward home-market and life-insurance balance sheets.

On the other side, Energy grew to 9.22% from 8.76% as they bulked up in Suncor, Exxon, Canadian Natural, and Enbridge. Health Care jumped from 4.21% to 5.05%, almost entirely on the J&J build, while Basic Materials inched up on across-the-board adds to Agnico Eagle, Wheaton, Barrick, and Cameco, reinforcing the gold-and-uranium hedge.

Consumer Discretionary eased slightly despite the Costco add because of trims in Amazon, TJX, and Brookfield Asset Management. Utilities and Real Estate — including Waste Connections and Brookfield Corp — were essentially held steady, underscoring that the rotation is about rebalancing growth versus defensives, not abandoning any pillar.

Across the book, the message is consistent: they are keeping their long-term growth engines but insisting on more ballast and better entry points after a shaky quarter.

They did not cut the AI theme; instead, they refined it. NVIDIA remains a top position at 4.12%, and they doubled down on Lam Research while trimming some higher-multiple or more index-like tech exposure. Additions to Alphabet and Shopify show they still want scalable digital franchises, just with more selectivity.

The real shift is in risk anatomy. More energy, gold, uranium, and pipelines, plus a large new commitment to J&J alongside Lilly, gives the portfolio a thicker layer of cash-yielding, inflation-aware defensives that can offset another leg of multiple compression in growth.

Within financials, they’re leaning back into Canadian banks and life insurers at the expense of U.S. card and money-center risk. And by cutting QQQ while lifting SPY and EFA, they are nudging the book away from style concentration toward broader geographic and sector diversification.

For observers, the takeaway is that this manager treats 13F drawdowns as opportunities to upgrade quality and improve the growth/defensive mix, not to chase what just worked. If volatility persists, expect more of the same: trimming crowded, extended winners to fund durable cash engines, especially in health care, energy infrastructure, and the AI supply chain.