What’s The Difference Between a Segregated Fund and a Mutual Fund?
Segregated funds combine the growth potential of a mutual fund with the security of a principal guarantee.
Here’s a quick summary of the added features that can make segregated funds an excellent alternative to mutual funds.
Segregated funds vs. mutual funds
Features
Segregated funds¹
Mutual funds
Professional portfolio management
Diversification among asset classes and management styles
Grow a portfolio while diversifying risk
Liquidity: easy access to your money through daily price valuations
Ability to bypass probate and keep financial affairs private
Occasionally³
Potential creditor protection for registered accounts
Potential creditor protection for non-registered accounts
A guarantee of the principal (or a specified percentage) at maturity²
A guarantee of the principal (or a specified percentage) at death²
Lock in market gains using resets
¹ Segregated fund fees are higher than mutual funds, as they include a management fee and an insurance fee component.
² Withdrawals reduce guarantees proportionately. Guarantees end at age 100.
³ Non-registered accounts with joint ownership and right survivorship only (all provinces except Quebec). Registered accounts can bypass probate when a beneficiary is named.
