Mutual funds
A flexible way to invest your money
Mutual funds are a great option to help reduce your risk by spreading your money more widely than investing on your own.
Broad options
Mutual funds invest in many different companies, industries, countries and investment types, which can help reduce risk.
Cost effective
Your money is pooled with other investors making it much more affordable than buying stocks by yourself.
Expert management
You can be confident your money is being managed by a team of professionals who have training and experience.
What is a mutual fund?
A mutual fund pools your money with many other investors in a group of investments, like stocks and bonds. A professional money manager chooses the investments for each fund with a specific objective and investment type in mind. For example, a Canadian equity fund invests primarily in Canadian stocks.
Mutual funds can help you spread your money more widely than investing in individual stocks and bonds on your own.
How can you grow your money with mutual funds?
Dividend payments
You earn income from dividends on stocks and interest on bonds held in the mutual fund. You may have the choice to either receive a cheque or reinvest the earnings and get more shares.
Capital gain
When a mutual fund sells an investment that’s increased in price, this is a capital gain. Most funds deliver capital gains or losses to investors annually.
Net asset value (NAV)
If investments in a mutual fund rise in value but aren’t sold by the fund manager, the mutual fund shares increase in price. Providing the fund doesn’t decrease in value, your investment will grow in value when you decide to sell the mutual fund.
Mutual funds as unique as you are
Canada Life Mutual Funds are a relevant, competitive suite of mutual funds that can help you achieve your goals.
Advantages of mutual funds
Team of experts
Mutual funds are managed by professional portfolio managers who buy the securities in the fund. They ensure the securities are in line with the fund’s investment objective—and yours.
Putting your eggs in several baskets
By investing in one fund, you get access to a number of different opportunities, without the hassle or risk that comes with purchasing and monitoring individual investments on your own.
Achieve different investment goals
You can invest in mutual funds as part of a registered retirement savings plan (RRSP) to save for your life after work, a registered education savings plan (RESP) to help fund a child’s education, or a tax-free savings account (TFSA) to save for almost anything.
Money when you need it
Mutual fund units can be “cashed out” any time but remember the amount of money available will depend on the mutual fund's unit value on that day and any redemption fees.
Mutual fund fees explained
Mutual fund fees go towards paying for investment advice, administration and professional mutual fund management.
Advisors who sell mutual funds are required by law to disclose any fees associated with the fund you’re investing in. They’re also required to tell you about their compensation.
There are 3 types of mutual fund fees:
Management expense ratio (MER)
Management expense ratio (MER) is paid by the fund itself for costs associated with the fund like client statements and the advice you get from your advisor.
Read more about MERsSales charges
Sales charges (sometimes called front-end loads) are commissions made by advisors when you purchase some mutual funds.
Redemption fees
Redemption fees (also known as back-end loads) are fees you may pay on some mutual funds if you sell them within a certain time frame, or sell percentage of your investments with a year.
What kind of fund do you need?
Because mutual funds and segregated fund policies are in some ways similar and other ways different, here’s a chart to help you determine which choice will help you reach your investment goals.
Mutual funds | Segregated fund policies | |
|---|---|---|
| Type of investment | A pool of money spread across different investments, managed by experts. | A pool of money spread across different investments, managed by experts. |
| Guarantees | None | Insurance guarantees can protect much or even all your original investment at death and policies maturity date. |
| Fees | Less than segregated fund policies and investing in individual stocks | More than mutual funds due to paying a premium for the insurance guarantee |
| Variety of investment options | Similar | Similar |
| Estate planning | Registered mutual fund proceeds are passed on to your named beneficiaries when you die. No probate tax. | When you die, proceeds go directly to your named beneficiaries and won’t flow through your estate. No probate tax. |
| Potential creditor protection | For registered mutual funds, bankruptcy protection may apply. | Yes.Footnote 1 |
| View segregated fund policies |
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Fund Facts before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
You’ll find the detailed descriptions of the segregated fund policy in the information folder provided by your financial advisor. Any amount that is allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value.
- Footnote 1
- 1Creditor protection depends on court decisions and applicable legislation, which can be subject to change and can vary from each province; it can never be guaranteed. Talk to your lawyer to find out more about the potential for creditor protection for your specific situation. In Saskatchewan, executors must disclose all known life insurance policies owned by the deceased, including segregated fund policies. They must list the insurance company, policy number, designated beneficiaries and the value at the date of death.
