Segregated Funds

A Segregated Fund is a type of investment fund solely administered by Canadian insurance companies.

Segregated funds are similar to mutual funds in many aspects. However, one notable dissimilarity is that, unlike mutual funds, these can provide a guarantee that part of the money you invest can be recovered and refunded to you should the underlying fund lose money. On top of that, the fact that segregated funds are issued as insurance contracts allows them to provide a wider spectrum of benefits, such as many guarantees and creditor protection.

The sole disadvantage associated with having segregated funds is that you will have to usually wait for a period of 10 years to pass before taking advantage of your rightful benefits. Your funds are not permanently locked, though, as you can withdraw before the maturity date arrives, but you’ll get the current market value of your investment which can prove to be disadvantageous in some cases.