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Guide · Investing

Segregated funds vs. mutual funds in Canada

Both can pool your money with other investors. The insurance contract changes what you pay for and when a benefit can apply.

Compare the features side by side

FeatureSegregated fundTypical mutual fund
StructureInvestment through a life insurance contractPooled investment fund
Market riskUnit values fluctuateUnit values fluctuate
GuaranteesContract may top up maturity or death benefitsGenerally no insurance-contract maturity or death benefit
CostsCompare fund expenses and the cost of contract featuresCompare fund expenses and any account or advice fees

What would you use the guarantee for?

Check the maturity date against your plans and ask how early withdrawals change the guarantee. Compare funds with similar investments and risk, then compare total costs in dollars. A guarantee can be valuable under the right contract terms, and higher fees can reduce the amount you accumulate.