Segregated Funds (Seg Funds) are contracts of insurance issued by life insurance companies. They have many similarities to Mutual Funds and are sometimes called no-lose funds because they have a unique guarantee of 75% to 100% of the principal amount deposited. This feature is of value if you feel you would like to participate in the stock market, but do not want the risk that goes with investing in stocks and stock based investments.

In addition to the guarantees, there are other benefits of Seg Funds. Under certain conditions your seg fund can be creditor proof. This feature is particularly important for the self-employed. Creditors in the event of bankruptcy cannot seize your money.

These unique features do come at an additional cost compared to mutual funds. Seg funds typically cost more to run and administer and these extra costs are paid by unit holders in the form of higher management fees.