Segregated Fund

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.

RELATED TERMS
  1. Segregation

    Segregation is the separation of an individual or group of individuals ...
  2. Maturity Guarantee

    The dollar amount of a contract (such as a life insurance policy ...
  3. Irrevocable Beneficiary

    A beneficiary in a life insurance policy or segregated fund contract ...
  4. Segregated Disclosures

    A series of lender declarations that are required by law to be ...
  5. Protected Fund

    A type of mutual fund that guarantees an investor at least the ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. ETFs & Mutual Funds

    Segregated Funds: Investment Protection For Canadian Citizens

    These funds contain the best of all worlds, providing opportunities for market growth with a no-loss guarantee.
  2. Investing

    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. ETFs & Mutual Funds

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
  4. ETFs & Mutual Funds

    A Mutual Funds Guide for Young Investors

    Learn how mutual funds work, why they are so popular and how younger investors can get started by putting mutual funds in their IRAs or 401(k)s.
  5. ETFs & Mutual Funds

    Trading Mutual Funds For Beginners

    Learn about the basics of trading and investing in mutual funds. Understand how the fees charged by mutual funds can impact the performance of an investment.
  6. ETFs & Mutual Funds

    Mutual Funds

    What mutual funds are: Professionally managed pools of stocks, bonds and/or other instruments that are divided into shares and sold to investors. Pros: Diversification; liquidity; simplicity; ...
  7. Managing Wealth

    Mutual Funds: Different Types Of Funds

    No matter what type of investor you are, there is bound to be a mutual fund that fits your style. According to the last count there are more than 10,000 mutual funds in North America! That means ...
  8. ETFs & Mutual Funds

    Pooled Funds Minimize Risk and Reward

    Pooled funds combine money from many individuals to invest in vehicles like a mutual fund or a pension fund.
  9. ETFs & Mutual Funds

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  10. ETFs & Mutual Funds

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
RELATED FAQS
  1. How do segregated funds differ from mutual funds?

    Mutual funds are investment vehicles that many investors have embraced as a simple and relatively inexpensive method for ... Read Answer >>
  2. Under the Uniform Securities Act, a registrant who holds custody of client funds ...

    The correct answer is d). A registrant is required to segregate client funds, send notice whenever funds have been moved ... Read Answer >>
  3. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
  4. Why is it that when investors realize returns on a mutual fund, its price tends to ...

    Mutual funds have been in existence since 1924, when the first open-ended mutual fund was created. Since then, the market ... Read Answer >>
  5. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  6. Do mutual funds pay dividends or interest?

    Learn how and why mutual funds pay interest or dividends, including the different funds and which types generate each type ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center