Segregated Funds in Canada: What You Need to Know
If you’re looking for an investment that offers growth potential and a layer of protection, segregated funds might be the right choice. Sold exclusively through life insurance companies, these investments combine the growth potential of mutual funds with the added security of insurance guarantees.
As a licensed financial security advisor affiliated with Experior Financial Group, I help Canadians diversify their portfolio while protecting what matters most. Here’s how segregated funds work—and why they could be a valuable part of your financial plan.
How Do Segregated Funds Work?
Segregated funds are investment products offered by insurance companies. They work similarly to mutual funds: your money is pooled with that of other investors and managed by professional fund managers who invest in stocks, bonds, or other assets.
But what sets them apart is their insurance protection.
Segregated funds offer:
- Death benefit guarantees (75% to 100% of your investment)
- Maturity guarantees (you get back 75% to 100% of your original deposit after a set period—usually 10 years)
- Creditor protection (especially valuable for business owners or professionals)
- Beneficiary designation (bypasses probate fees when passed to heirs)
This means that even if the markets drop, you won’t necessarily lose everything—you’re guaranteed to recover at least a portion of your initial investment.
Mutual Funds vs. Segregated Funds: What’s the Difference?
| Feature | Mutual Funds | Segregated Funds |
|---|---|---|
| Offered by | Investment firms | Insurance companies |
| Insurance guarantees | ❌ No | ✅ Yes (death/maturity guarantees) |
| Probate bypass via beneficiary | ❌ Not always | ✅ Yes |
| Creditor protection | ❌ Rare | ✅ Often available |
| Fees | Lower | Higher (due to guarantees) |
| Risk | Higher volatility | Lower risk due to guarantees |
hose looking to minimize risk, especially near or during retirement.
Are Segregated Funds Safe?
Compared to equity mutual funds, segregated funds are designed to be more secure. They are backed by life insurance companies like Manulife, Empire Life, and iA Financial Group, and include guarantees that can shield your capital in down markets.
That said, like all investments, they are not risk-free. Their underlying assets can rise or fall in value—but the guarantees help reduce the downside risk, especially over the long term.
Long-Term Investing: Don’t Panic
Markets fluctuate, and that’s normal. The key is to stay calm and stay invested.
“Buy low, sell high” still applies.
Segregated funds are meant for long-term investors. If you’re unsure whether to make changes to your portfolio, talk to your advisor before making any moves. Timing the market rarely works—strategy and guidance do.
Why Work With an Experior Associate?
At Experior Financial Group, we believe in personalized advice and complete financial strategies. As your advisor, I can help you:
- Analyze your financial goals and risk tolerance
- Choose the right segregated fund from top Canadian providers
- Coordinate your investments with your life insurance and estate planning
- Help you secure creditor protection and tax efficiency
- Ensure your portfolio evolves with your needs
💡 We don’t charge you any fees for our advice. Our goal is to make sure you’re protected, informed, and on track for a confident retirement.
Is a Segregated Fund Right for You?
These products are especially well-suited for:
- Business owners and professionals seeking creditor protection
- Near-retirees who want guarantees
- Estate planners looking to bypass probate
- Conservative investors who want security without sacrificing growth
👉 Click here to calculate your retirement needs and explore how segregated funds can fit into your long-term plan.
📞 Let’s talk. I’ll help you compare fund options from Canada’s top insurers, understand your guarantees, and build a balanced investment strategy that reflects your goals.