Segregated Funds and GIAs

Accumulation Annuities

Investment products from life insurance companies offer unique features attractive to Canadian investors. Generally, there are two types of investment products known as accumulation annuities: segregated funds and term deposits called Guaranteed Interest Annuities (GIAs). Segregated funds and GIAs may be an important part of a financial plan as they can be held in an RRSP, allowing you to save for retirement.

Segregated funds are similar to mutual funds. They are pools of investors' money that may invest in stocks, bonds and money-market instruments, depending on the objectives of the segregated fund. These investment options are available on both a registered and non-registered basis.

Segregated funds offer two guarantees: a maturity guarantee and a death benefit guarantee. These are two unique features that may be of interest to conservative investors looking for a guarantee of protection. The maturity guarantee ensures a return of principal at a minimum percentage starting at 75% and up to 100% at some companies. The death benefit also guarantees a minimum of 75% or more of the original principal on the investor's death to be returned to the beneficiaries.

Additionally, both segregated funds and GIAs also offer investors potential creditor protection, unique to insurance company products. In certain circumstances, being creditor protected is an important consideration when planning for the future security of your family.

Insurance company products fall under different legislation than other traditional investment products you may be familiar with. As a result, they may have certain attributes like possible creditor protection, under certain conditions. Your professional legal advisor will be able to counsel you concerning your personal circumstances.

Investments like segregated funds and GIAs can be used to provide security and protection for your family. A life licensed Investment Advisor can advise you on which investments will help you to meet your goals.

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Growth & Peace of Mind With Segregated Funds

By combining the protective benefits of an insurance contract with the investment performance potential of mutual funds, segregated funds can be an effective strategy. Segregated funds are professionally managed investment funds that give investors the opportunity to build wealth while limiting their risk. While segregated funds are similar in many respects to mutual funds, they do offer investors some unique features.

Both offer virtually unlimited opportunity for growth, although segregated funds provide potential protection against severe downturns in the stock market. Many of the leading mutual fund companies and institutional investment managers have joined forces with the insurance companies to give investors the flexibility to build a highly diversified portfolio, by offering a wide variety of top performing segregated funds.

As an investor, you benefit from the ability to "lock-in" gains and reset your maturity guarantee on some funds. Segregated Funds also allow you to avoid probate fees* by naming a beneficiary if you are the named owner; potentially protect your assets from creditors and purchase in an RRSP/RRIF. If you are looking for a unique investment opportunity that combines potential for growth with peace of mind, consider segregated funds.

Use our Find An AdvisorOpens a new window in your browser. tool to locate a CIBC Wood Gundy Investment Advisor near you and take the first step to achieving the financial future you want.