The Guaranteed Investment Fund is similar to a mutual fund because investors are pooling their money with other people to invest. As a result, life insurance companies distribute segregated funds with a guarantee attached to the investment that protects the investor's principal from sudden market declines.

​

​

​

​

​

​

​

​

​

The above chart shows actual investment results  Averaging 12% per year vs the bank average in BLUE

​

You could talk to all 34 Canadian Companies and all the agents and check out the 6,000+ available products OR contact ONE source, Advisor & Co.  

 

The main difference between GIFs and mutual funds is in the ownership.  The investor has no ownership of the assets held by the investment fund. They do not receive shares or units of the fund, but rather their investment is evidenced in the form of an insurance contract.

​

History

Guaranteed Investment Fund contracts were initially offered by the Canadian insurance industry in 1961. Traditionally, guaranteed investment funds were sold and managed by insurance companies. More recently, the guaranteed funds contract has evolved to where mutual fund corporations and financial institutions offer their own versions of guaranteed funds. These are typically referred to as Guaranteed or Protected funds and they are available in registered and non-registered forms and a wide range of asset allocations. Typically, the new versions market existing mutual funds and then marry them to an insurance guarantee rather than creating a new category of mutual funds. So a guaranteed investment is just a traditional mutual fund plus an insurance wrapper.

​

Because the guaranteed funds contain insurance benefits, their management expense ratios (MERs) are a tiny bit higher than those for regular mutual funds. According to The Investment Funds Institute of Canada (IFIC) (May 12, 2010), funds offering principal or income guarantees will add a further 0.50% - 1.00% to the MER, depending upon the guarantee. According to the IFIC, in Canada the MERs for guaranteed investment funds generally range between 2.75% and 3.50%, per year.  A typical Mutual fund generally range between 1.75% and 2.50%, per year, but zero guarantees.

​

Guaranteed Investment Funds are popular with investors desiring of the potential investment gains promised by stock markets but who are concerned about preserving their investment capital. 

​

For more information on Guaranteed Investment Funds contact our Team