Q&A: Segregated funds
Question: I just turned 71 and must convert RRSP to a RRIF by year-end. My advisor is suggesting “segregated funds”. A total of $150,000 is being converted. I’m leaning towards just cashing out or putting the money in GICs due to jittery feelings about the market. I’ve been in mutual funds and got burned once so they’re out. Question: should I be considering “segregated” funds? – Larry V.
Gordon Pape answers: If you don’t want to put any money in mutual funds, then segregated funds are a non-starter. They’re simply insurance company mutual funds with extra bells and whistles and a higher price tag.
That said, remember that you can invest in funds (mutual or segregated) that have nothing to do with the stock market. There are many fixed-income funds out there that will likely provide a better return than GICs. Take a look at the track record of those offered by Phillips, Hager & North, for example.