Protect your investments from dips in the market with segregated funds

Freedom 55 Financial - Oct 15, 2020
A segregated fund is one way to help grow your wealth while also protecting your savings.
Older couple financial planning their future with their advisor

What is a segregated fund?

A segregated fund is one way to help grow your wealth while also protecting your savings. Each segregated fund is a professionally managed pool of money spread across several different investments (like a mutual fund), which helps diversify your savings and protect your money from dips in the market. Segregated funds also provide protection for you and your beneficiaries. It’s like investing with a safety net.

What does that mean?

Try to think of a segregated fund as an insurance policy. There are customizable guarantees that help protect your initial investment and preserve the money you’ve worked hard to save.

If your investment is worth less than its guaranteed value when the policy matures or if you die, the insurance protection will top you up. You can choose to be topped up to a guaranteed value that is either 75% or 100% of the original value (proportionately reduced by any withdrawals).

This graphic shows how a segregated fund can protect your investment where a mutual fund can’t.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above example is for illustrative purposes only. Situations will vary according to specific circumstances. 

*All costs above are estimates provided for this particular example and we do not guarantee their accuracy or completeness. Estate taxes vary across Canada and in this example are based on Ontario. Legal and accounting fees will vary based on the complexity of the estate settlement. Executor fees vary and may be waived. 

If you’ve invested in a mutual fund or other securities, your investment is subject to fees and taxes when the policy matures or if you die, leaving less for your beneficiaries. But if you’ve invested in a segregated fund, the guaranteed value of your investment gets paid out to your beneficiaries.  

What segregated funds should you invest in?

Canada Life™ segregated funds are managed by experienced portfolio managers who have a long track record of success. They rely on their insight and experience to carefully select securities and actively manage each portfolio. The portfolios they create don’t resemble the benchmark – and that’s the point. Pathways managers strive to out-perform their benchmark at every stage in the market cycle, meaning potentially higher returns for you.

Should you invest in segregated funds?

Everybody’s financial goals are as unique as their fingerprint. Whatever milestones you’re saving for – be it a house, furthering your education, travel or retirement, you want your investments to grow so that you can achieve those goals. Segregated funds may be a strong fit towards that.

 

I’d be happy to chat with you more about segregated funds and determine if they are suitable to your needs.