Quote:
Originally Posted by Slava
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.
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Been out of town, but wanted to chime in on this. I know of at least one seg fund with a minimum of $250k (relevant cause we all know CP has most of the 1%) with a certain company that has lower MER than the Mutual Fund and there may be others out there.
Also with Seg Funds you can flow through Capital Losses whereas the Mutual Fund you cannot.
I think it's a good choice for Older individuals, and more conservative individuals that want guarantees. Also, if you wanted to try VERY risky investments with principle protection.