Which fund company should I choose?

Q – After reviewing my pension in Standard Life’s Ideal portfolio, I am considering transferring the locked-in contract to another company.  At this stage I do not know if I wish to stay with segregated funds and I’m weighing the pros and cons, together with the different management fee styles.  Canada Life and CI are two companies on my prospective list. 

The transfer will mean a deferred sales charge of 3%, but I am prepared to suffer the depletion, as I feel over time with better-performing  funds I would recapture the loss.

My questions are:  a) What are your thoughts on segregated or non-segregated funds for this type of transfer, and b) what company (ies) do you recommend for my prospective list? – C.M.

A – If you move out of segregated funds, you will be giving up the guarantees and  protections they offer. These include a full or partial guarantee of your principal at maturity or death and creditor protection. You have to decide how important these are to you.

If you check out Gordon Pape’s 2002 Buyer’s Guide to Mutual Funds, you will find reviews and ratings of Canada Lifand CI Funds. CI had more funds on our Recommended List. However, Canada Life offers access to a wide range of fund managers, including CI, Trimark, Bissett, AGF, Ethical, Fidelity, AIC, Templeton, and TD. So you have a broader range of choices in that sense. As a general rule, I believe that the broader the range of choice, the better.

Other good companies to consider are Phillips, Hager & North and McLean Budden. Also, keep in mind that you could simply move the money into a locked-in self-directed RRSP and choose from the entire fund universe. – G.P.