Segregated Funds

Unlike mutual funds, a segregated fund offers insurance benefits and insurance guarantees. Your contributions are guaranteed, but they do come with higher fees and are generally less flexible than mutual funds. A segregated fund is not as volatile and comes with very low risk. Keep in mind with all investments you still have the shares, it is the value that goes up or down.  

So if the value of your fund goes down, it is important not to panic and pull out.  Buy low and sell high.  Always talk to your Experior broker to find out if moving it around is a good idea before making any moves.  Mutual funds as investments offer more potential gains but also come with the added risk of incurring losses on your investment. The most common kind of segregated fund consists of a portfolio that is managed by a life insurance company like ManulifeEmpire Life, or Industrial Alliance.

Insurance companies sell investment funds called segregated funds. In some ways, these investments are similar to mutual funds, in the way that  they are a collection of funds that a client invests in with professional fund managers minding them. 

A segregated fund offers some additional features that mutual funds do not, including a death benefit and in some cases, a guaranteed base income. If a segregated fund policy is purchased with non-registered funds, it lets you as the investor name your beneficiaries. That way, when you pass away, the money can be paid directly to your loved ones and bypass any probate fees.

Another benefit to Segregated funds is that Individual insurance contracts purchased through segregated funds are invested in underlying assets like mutual funds, helping your contract appreciate in value over time. However, there is also a chance the funds could incur losses, so these funds include a guarantee to protect part of the investment. Another benefit of segregated funds is that even if an underlying fund that your segregated investment is based on loses money, you will still return some (or even all) of your principal investment.

Yes, segregated fund investments are safe from market disruptions given their nature and guarantee. On the other hand, a mutual fund or an equity fund policy may perform better than a segregated fund or could experience fluctuations due to conditions in the market.