What is a Segregated Fund?

A segregated fund is an investment product offered by insurance companies. It’s structured similarly to a mutual fund, where your money is pooled with other investors and managed by professionals. However, because it’s an insurance contract, it provides additional guarantees and protections.

Why Consider Segregated Funds?

Seg funds may be ideal for:
✔ Investors who want protection from market downturns – The guarantees help safeguard a portion of your capital.
✔ Business owners or professionals concerned about creditors – Potential creditor protection can add peace of mind.
✔ Individuals looking for a smoother estate transfer – Beneficiaries receive the funds directly, avoiding probate delays.
✔ Those who want market exposure with some level of security – You can participate in market gains while having downside protection.

However, it’s important to note that seg funds often come with higher fees than mutual funds due to the insurance features. Always weigh the costs versus the benefits before investing.

How to Check If Your Portfolio Includes Seg Funds or Mutual Funds

Not sure if you own seg funds or mutual funds? Here’s how to check:

🔍 Review Your Investment Statement – Look for terms like "segregated fund," "insurance contract," or "maturity guarantee."
🔍 Check the Provider – If your investment is with an insurance company (e.g., Sun Life, Manulife, Canada Life), it’s likely a seg fund. Mutual funds, on the other hand, are typically sold by banks, investment firms, and independent fund providers.
🔍 Look for a Contract Number – Seg funds come with an insurance contract, whereas mutual funds do not.
🔍 Ask Your Advisor – If you're unsure, a financial advisor can confirm what type of funds you hold and explain the differences.

Is a Segregated Fund Right for You?

Seg funds aren’t for everyone—they often come with higher fees due to the insurance guarantees. However, if principal protection, estate planning benefits, or creditor protection are important to you, they might be worth considering.

If you’re unsure, talk to a financial advisor to see if segregated funds fit your investment goals.