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  • A mutual fund is a simpler way for you to invest in the market when you are looking for something other than the traditional investment products.
  • A mutual fund is the pooling of assets of many investors, which is then invested in different types of securities, from low risk such as treasury bills and government bonds to higher risk securities such as stocks. When you buy a mutual fund, you are buying a number of units of the larger pool of assets.
  • Unlike traditional investment products such as guaranteed investment certificates, the return on a mutual fund is not guaranteed as it is subject to market fluctuations and therefore cannot be known with certainty. The principal investment in a mutual fund is also not guaranteed and could be at risk of loss should the market performance fall.

The types of mutual funds depend on the types of securities held by the fund. The most common types of mutual funds are:

  • Fixed Income Fund: An income mutual fund holds a variety of government, municipal and corporate debt obligations, preferred stock, money market instruments and dividend-paying stocks. An income mutual fund is geared towards investors interested in generating current income, either on a monthly or quarterly basis, as opposed to capital appreciation.
  • Equity Fund: Also known as a “stock fund”, an equity mutual fund invests principally in stocks. Stock mutual funds are principally categorized according to company size, the investment style of the holdings in the portfolio and geography.

Among the different options available for mutual funds, the most common options are:

  • Non-Registered: A mutual fund can be held as a regular investment. The earnings are taxable as per Canada Revenue Agency regulations.
  • Registered: A mutual fund can be held in a registered investment account for retirement savings purposes. The earnings will not be taxed while the mutual fund is registered as a RRSP or RRIF.
  • TFSA: A mutual fund can be held within a Tax Free Savings Account. The earnings will not be taxed and the withdrawals from the TFSA will not be taxed.
  • You must be 18 years or older to invest in a mutual fund.
  • The return on a mutual fund depends on the fund selected, the type of investments held in the fund, the fund manager and the time invested in the fund.
  • The return can be interest earned on money market instruments, interest received from bonds or the earnings from stocks, among others.
  • The return on a mutual fund will vary depending on the type of fund and the performance of the investments within the fund.
  • The return on a mutual fund is not guaranteed.
  • The return on a mutual fund is not guaranteed as it is dependent on the performance of the investments in the fund which can fluctuate.
  • The principal invested in a mutual fund is not guaranteed and can be at risk of loss if the fund value falls below the original amount invested.
  • Yes you can use a mutual fund to save for your retirement. Investors who prefer mutual funds find that it is a simple way to invest in the market when trying to increase their return on investment or diversify their portfolio.
  • A mutual fund can be held in a registered investment account for retirement savings purposes. The earnings will not be taxed while the mutual fund is held in the RRSP or RRIF.
  • Contact an Investment Specialist to review all the investment options for your retirement plan in order to ensure that you are accumulating the required amount and minimizing taxes.
  • A mutual fund will charge fees for the management of the fund (MER). Fees vary among the different mutual funds. Fees are deducted from the return generated by the mutual fund.
  • Other fees and charges may apply to mutual fund investments.
  • Contact an Investment Specialist to review your financial situation, time horizon, goals and risk tolerance and to develop an investment plan that is suitable for you, with or without mutual funds.
  • There are so many options of mutual funds and mutual fund companies to choose from that it can be mind boggling. The Investment Specialists can help you determine your goals and the mutual funds that are best for you.
  • There are no limits to the amount you can invest in a mutual fund or to the number of mutual funds you can have. However, minimum investment amounts may apply depending on the type of fund selected.
  • Contact an Investment Specialist to review your investment options.