Quote:
Originally Posted by CarlW
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.
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True enough, but when you hit $250k and above almost every fund (if people go that route) has a reduced fee structure so its largely irrelevant.
Its a bit of a stretch on the capital losses though. The individual investor can't flow anything, its all done by the company. So while its true that you can receive losses as well as gains on a segregated fund, you have no control. I only mention this because its one of my most disliked factors about investment funds of any type; I want total control as an investor and this isn't the case in that situation.
Also, almost no seg funds let you do anything VERY risky any more. You can buy some pure equity mandates, but the small cap, emerging market kind of funds are not prevalent.
To me the major benefits of the segregated funds at this point are either those income guarantees or the estate planning benefits (which are numerous). Depending on your situation as well, the creditor protection can be excellent for a small business owner.