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Separate funds have been developed by the insurance market to compete against mutual funds. Today, several investment firms in cooperation with insurance companies to provide separate funds for investors. Separate funds not only obvious advantages to investors of mutual funds.
Segregated funds offer the following great advantages that do not seem to be offered by the default fund.
1. Segregated funds offer a guarantee of principal at maturity or death of the fund’s investors. There is a 100% guarantee of the invested capital at maturity or death (this can vary for a number of funds), less any withdrawals and management fees – even if the market price of investments decreased. Most segregated funds have a duration of ten years if you have the initial investment.
2. Segregated funds protection of creditors. If you go bankrupt, creditors can’t access the separate management.
3. Separate funds to avoid inheritance taxes and death of the investor.
4. Separate funds have a lock option “that allows investors to capture income from capital and then to ensure their investment. This powerful strategy can be very volatile capital.

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