Segregated Funds

Segregated Funds are also known as Variable Annuity contracts. They resemble Mutual Funds with a few distinct differences.

The most often desired component of a Segregated Fund is that it may offer creditor protection. This feature is of particular interest to business owners and professionals who are concerned that they may have financial or liability obligations with their employment and want to ensure that their other assets remain protected.

Segregated funds also flow out capital gains and losses to the unit-holders unlike mutual fund which only flow out capital gains and retain capital losses to offset future gains.

Segregated Funds also offer both a death benefit and maturity benefit. This is generally for either 75% or 100% of the invested or reset value.

Consequently, as a result of the guarantees and protection, Segregated Funds often have a slightly higher cost or management feel, when compared to a similar mutual fund investment.