Like mutual funds, segregated funds invest in various types of securities, such as equities, bonds, real estate, mortgages and money market instruments. Segregated funds are an insurance contract that provides you with investment management plus protection.
There are several differences between mutual funds and segregated funds. The primary differences are the principal guarantee on maturity and on death plus the ability to protect segregated funds from creditors going forward. For a segregated fund, most guarantees range from 75 to 100 percent of your original investment. In other words, the contract guarantees to pay on maturity at least 75 percent of the value of the money put into it, less withdrawals.
There are other benefits to segregated funds:
- As with mutual funds, segregated funds are run by EFG's experienced and skilled financial advisors.
- Segregated funds allow you to diversify your investment portfolios, so you lower your portfolio’s overall risk and enhance your returns in the long term.
- Proceeds from your fund are paid directly to your beneficiaries, avoiding the time and expense of probate. This also ensures that upon your death, your personal financial information remains private.