Segregated Fund

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DEFINITION of 'Segregated Fund'

A type of pool investment that is similar to a mutual fund, but is considered an insurance product. Proceeds received by the insurance company are used to purchase underlying assets, and then shares of the segregated funds are sold to investors.

BREAKING DOWN 'Segregated Fund'

Segregated funds may guarantee a specific return over the life of the investment or upon maturation of the fund. Although there may be a guarantee to the investor of a segregated fund, there will also likely be penalties if the investor sells shares of the fund before their maturity. These guarantees come with costs to the investor - in this case, opportunity costs.

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    The Securities and Exchange Commission (SEC) may take action to impose greater regulation on how 12b-1 fees are used, or ... Read Full Answer >>
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    A reasonable 12b-1 fee is generally considered to be 0.25% of the assets of the mutual fund. The maximum amount allowed for ... Read Full Answer >>
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    There are a number of mutual funds that give exposure to the retail sector. Three of the most popular funds are the Fidelity ... Read Full Answer >>
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