DEFINITION of 'Guaranteed Investment Fund - GIF'

A type of investment product offered by insurance companies that allows its client to invest in an equity, bond and/or index fund while providing a promise that some predefined minimum value of the fund (usually, the initial investment amount) will be available at the fund's maturity or when the client dies. Insurance companies usually charge up to 1% of the investment amount per year for this service.

BREAKING DOWN 'Guaranteed Investment Fund - GIF'

Some guaranteed investment funds also give people the opportunity to "reset" the guaranteed amount during specific periods of time. This allows investors to lock in greater sums in the event that they incur a large capital gain.

For example, suppose an investor near retirement age had invested $500,000 into this fund and after a incredible bull run, his investment grows to $585,000 in a year. By resetting the guarantee at this point in time, the investor has now guaranteed that he will at the very least receive $585,000.

RELATED TERMS
  1. Protected Fund

    A type of mutual fund that guarantees an investor at least the ...
  2. Capital Guarantee Fund

    An investment in which the investor's principal is shielded from ...
  3. Investment Fund

    A supply of capital belonging to numerous investors that is used ...
  4. Equity Fund

    A mutual fund that invests principally in stocks. It can be actively ...
  5. Segregated Fund

    A type of pool investment that is similar to a mutual fund, but ...
  6. Central Guarantee Fund

    A fund set aside by state insurance regulators to pay out claims ...
Related Articles
  1. Investing

    How to Sell Mutual Funds to Your Clients

    Learn about the various talking points you should cover when discussing mutual funds with clients and how explaining their benefits can help you close the sale.
  2. Financial Advisor

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  3. Investing

    Make Sure You Avoid Adding These Mutual Funds to Your 401(k)

    Find out which five types of mutual funds you should avoid in your 401(k), including why buying this year's hottest fund is likely a losing bet.
  4. Financial Advisor

    When Are Mutual Funds Right for Your Client?

    Find out what factors determine whether mutual funds are right for your client, including risk tolerance, investment goals and tax implications.
  5. Managing Wealth

    Should Balanced Funds Be Part Of Your Portfolio?

    Find out why you should include balanced funds in your portfolio, including the importance of customizability, diversification and professional management.
  6. Investing

    Investing in High-Yield Corporate Bond Funds

    High-yield corporate bond funds provide an interesting investment option, particularly for private investors chasing returns and a broad diversification.
  7. Financial Advisor

    Protect Mutual Funds From a Volatile Market

    Learn about the best ways to invest in mutual funds, including which types of funds are safest, while still protecting your investment from market volatility.
  8. Financial Advisor

    Stable Value Funds: Risk Less And Earn More

    Stable value funds can provide higher yields and lower risk.
  9. Investing

    Satisfy Your Investment Objectives With Income Funds

    Discover the various categories of income funds and the types of investors for whom they are appropriate.
RELATED FAQS
  1. What is the minimum amount of money that I can invest in a mutual fund?

    Learn about investing in mutual funds even with a smaller initial investment; there are many funds available to investors ... Read Answer >>
  2. Where does a hedge fund get its money?

    Learn how a hedge fund is structured and how the managing partner of the fund goes about the process of finding and soliciting ... Read Answer >>
  3. Can mutual funds only hold stocks?

    Learn about which types of mutual funds consist of only stocks, which may include stocks in addition to other assets and ... Read Answer >>
Hot Definitions
  1. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  2. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  4. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Blind Trust

    A trust in which the trustees have full discretion over the assets, and the trust beneficiaries have no knowledge of the ...
Trading Center