Once we make our mind to invest some of our money, we wonder which option will offer us the best bang for our spondulicks. Both mutual funds and segregated funds are the most popular and hold a diverse range of financial assets. Even though both strategies have their pros and cons and one needs to be careful considering both funds before making any investment. Both mutual funds and segregated funds are a similar type of investment pool. Despite both have units of funds that can be bought or sold, segregated funds generally offer a degree of protection against investment losses in comparison to mutual funds. Segregated funds provide a maturity benefit guarantee, death benefit guarantee, reset options, and provide deposit protection. Mutual funds let investors pool their money together in a fund but potentially limit the exposure to market fluctuations. For many people, it’s a very attractive investment, but Segregated funds guarantee potential increased returns. Segregated Funds are Creditor Protected within the province of designation, Mutual Fund is not Creditor Protected in case of a Bankruptcy or Professional Liability. Only life insurance companies can provide segregated funds and have different risks and benefits when compared to mutual funds. Mutual funds and Segregated funds should be chosen after evaluating the risks and objectives of the insured. Where mutual funds are a simple and relatively inexpensive method for investment, Segregated funds are more lucrative. Segregated funds are very important if you are Self-Employed. For a more clear picture, investors need to go through the differences and similarities between mutual funds and segregated funds. Segregated Funds and Mutual Funds often have many of the same benefits, such as:
· Both are managed by investment professionals.
- It can hold both mutual and segregated funds in the set-up as Single or Spousal RRSP’s, RRIF’s, RESP, LIRA’s, LIF’s, TFSA’s, or Non-Registered Money.
- Both are bundled investments.
- Both are diversity investments.
- Both have market exposure.
- Both are capital growth potential.
- Both can have equity and fixed-income investments.
- Both can go up and go down in value.
- Both give you access to greater diversification.
- Both will allow you to make monthly or annual contributions.
- Redeem investments at any time.
In spite of their consummate advantages, segregated funds have disadvantages. Accordance with the highest standards segregated funds fees is higher. Due to all the extra bells and whistles that impeccable investment, it’s worth paying extra and choosing Segregated Fund than a regular mutual fund. There is no one perfect investment plan or a good one or the bad one, it really depends on the purpose behind the investment. Both a mutual and Segregated fund will provide valuable protection and helps you achieve short- and long-term goals. At Retirement Shield Canada Insurance, we have a Segregated Fund option available that can protect assets and guarantee the retirement income for life. Please contact us for more information 416-613-9535, 416-900-6052, 866-517-0606 or visit our website “https://www.rshield.ca/“.