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A mutual fund is a collection of investments, such as stocks, bonds and other funds owned by a group of investors and managed by a professional money manager. Mutual funds fees, such as management expense ratios (MERs), are outlined in its Fund Facts. Learn more about mutual funds.

Segregated (or seg) funds are an investment product sold by life insurance companies. They are individual insurance contracts that invest in one or more underlying assets, such as a mutual fund. Unlike mutual funds, segregated funds provide a guarantee to protect part of the money you invest (75% to 100%). Even if the underlying fund loses money, you are guaranteed to get back some or all of your principal investment. But you have to hold your investment for a certain length of time (usually 10 years) to benefit from the guarantee. Learn more about segregated funds.

Segregated funds usually have higher management expense ratios (MERs) than mutual funds. This is to cover the cost of the insurance features. Carefully consider your need for these features before you buy, and speak to a financial advisor to determine what may be right for you. Not all advisors are able to sell both mutual funds and segregated funds.