Guaranteed Investing With Segregated Funds

The word investment, when it comes to currency specifically, is the action or process of investing money for profit or material result. There is the inherent hope that the investment will be profitable or useful in the future, but generally speaking, the “chance” of loss is a considerable factor in most investments. Enter Segregated Funds, a popular method of guaranteed investing.

Segregated Funds:

A segregated fund is an investment vehicle that represents a collective pool of funds that investors pay into while a fund manager makes the actual decisions regarding how the assets of the fund will be invested. Safety investors, or investors who want guarantees on their investment regularly choose to invest in segregated funds because they offer a degree of protection against investment losses. Usually this guaranteed protection is around 75 – 100% of premiums paid or your initial investment.

Things To Keep In Mind:

It’s important to remember that while segregated funds offer guarantees, these guarantees are only applicable under certain circumstances. In almost every instance, a segregated fund product honors the principal capital guarantee on maturity or death, regardless of what happens to the markets, economies, or interest rates. The maturity is the stated full investment period which is usually 7 to 10 years. As segregated funds are also tied to insurance and regulated by the insurance act, they come with a beneficiary designation. If an investor dies, even prior to the maturity period, the named beneficiary would receive the guaranteed principal amount as well, regardless of possibly negative market performance. Hence, maturity and death.

It is also important to remember that guarantees are not always free and in some cases may be quite expensive. To get a more detailed understanding of your guaranteed investment options, contact me directly and I will guide you through the process of choosing the right product for your needs and goals.