Quote:
Originally Posted by darklord700
Can someone explain Seg Fund more please? To me, it's an insurance product that promises no less than 75% of your principle back. The downside is reduced return. My company only allows me to contribute to registered seg funds so I do to get the matching.
But giving me another choice, I would rather buy ETF or mutual funds for higher potential returns.
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You have the basics there; you receive some guarantees (such as capital guarantees at a certain date, or a guaranteed income stream and death benefits) and pay a higher fee for that. You still have upside depending on the investment mandate but you pay more in a Segregated fund than you would for the same mandate in say a mutual fund.
Generally speaking these can be useful for people in certain situations, such as people who need/want that guarateed stream of income or have estate planning needs.