Segregated Funds vs. Mutual Funds

Segregated funds and mutual funds are similar in a couple of ways. Both contain a diversified group of investments.

2Segregated Funds vs. Mutual Funds

Segregated funds and mutual funds are similar in a couple of ways. Both contain a diversified group of investments, it is easy to access your money, and they both offer professional money management.

Segregated funds have the following advantages:

  • Maturity guarantees. A segregated fund policy guarantees that the value of your investments at maturity will not be less than a specified percentage of the amount you invest.
  • Death benefit guarantees. Your beneficiary will receive the guaranteed amount or market value of your investments—whichever is higher.
  • The ability to bypass probate. Your beneficiaries get their payout faster, the privacy of your affairs is maintained, and the cost of probate fees is avoided.
  • Potential creditor protection for non-registered accounts. Your segregated fund assets may be protected from creditors in the event of a bankruptcy.
  • Resets. The ability to lock in market gains on your investment.