How segregated funds differ from mutual funds and why their built-in maturity guarantees and creditor protection make them an essential tool for business owners and estate planning.
What are Segregated Funds?
Segregated funds (or "seg funds") are individual insurance contracts that invest in one or more underlying funds. Because they are insurance products, they offer unique features that traditional mutual funds cannot provide.
The Safety Net
One of the primary advantages is the principal guarantee. Most seg funds guarantee that at least 75% or 100% of your initial investment will be returned to you at maturity or upon death, regardless of market performance. This provides peace of mind for conservative investors.
Creditor Protection & Probate Bypass
For business owners and professionals in Mississauga and across Ontario, seg funds offer a layer of creditor protection in the event of bankruptcy or legal action. Furthermore, because you can name a beneficiary, these funds bypass the time-consuming and costly probate process, transferring directly to your heirs.
"In a world of market uncertainty, seg funds offer the best of both worlds: the growth potential of the stock market with the safety of an insurance contract."— Rahul Jain