Segregated Funds
An investment fund with an insurance-backed guarantee that protects a portion of what you put in.
The basics
A segregated fund is an investment contract offered by an insurance company rather than a mutual fund company. Your money is invested in market-linked funds, stocks, bonds, balanced portfolios, much like a mutual fund, but wrapped inside an insurance policy.
That insurance wrapper adds a guarantee: typically 75 to 100% of the premiums you have paid in, net of any withdrawals, are protected at maturity or on death, no matter how the underlying investments perform in between. Because of that added protection, segregated funds generally carry higher fees than comparable mutual funds.
They can also offer potential creditor protection and let you name a beneficiary directly, which may allow the proceeds to bypass probate, a feature standard mutual funds do not have.
Step by step
- You start by choosing a guarantee level. This is the percentage of your deposits protected at maturity and on death. Equitable's current lineup offers an Estate Class (75% maturity guarantee, 100% death benefit guarantee) and a Protection Class (100% on both). The higher the guarantee, the higher the fee that pays for it.
- Underwriting for a segregated fund contract is light compared to life insurance. Since the contract insures your investment, not your health, most applications are approved with basic identification and suitability questions rather than a medical exam.
- Once the contract is issued, you choose which underlying funds to hold, from money market through equity. You can switch between them without triggering the guarantee to reset on its own.
- A reset is a request you make, usually once per calendar year, to lock in investment gains as your new guaranteed death benefit. If the market has gone up since you opened the contract, resetting raises your permanent floor. Equitable processes reset requests within five valuation dates and allows them until the annuitant turns 80.
- At maturity, typically a date you set decades out, or on death, the insurer pays out the greater of the contract's market value or the guaranteed amount. Naming a beneficiary directly on the contract means that payout goes to them outside your estate, skipping probate entirely.
What drives the cost
- Guarantee level chosen (75/75, 75/100, or 100/100), the single biggest driver of the fee
- Underlying fund selected, equity funds generally carry higher management fees than fixed income
- Whether resets are used, since some guarantee classes charge slightly more for reset flexibility
- Deposit amount and timing, since fees are charged as a percentage (the MER) rather than a flat dollar figure
Segregated funds vs. mutual funds
| Segregated funds | Mutual funds | What the difference buys you | |
|---|---|---|---|
| Maturity / death guarantee | 75–100% of premiums (net of withdrawals) | None | A contractual floor. Your account cannot be worth less than the guarantee, no matter what the market does. |
| Annual resets | Available, locks in gains as the new guarantee, to age 80 | Not applicable | Every reset raises your floor permanently. A good year becomes a permanent gain, not just a paper one. |
| Creditor protection | Potentially available | Not available | Meaningful for business owners, incorporated professionals, and the self-employed. |
| Beneficiary designation | Yes, may bypass probate | No, goes through estate | Faster payout to your family and lower estate costs. See the worked example below. |
| Fees | Generally higher (pays for the guarantee) | Generally lower | You are pricing insurance, not just fund management. The comparison below shows what that price buys. |
The fee difference is real, and it is right there in the fund table above. It buys four things a mutual fund or ETF structurally cannot offer: a contractual floor on your principal, the ability to reset that floor higher every year markets cooperate (until age 80), potential creditor protection, and a named-beneficiary payout that bypasses your estate.
That last point has a concrete dollar value in Ontario. Estate Administration Tax runs roughly 1.5% on estate value above $50,000. On a $500,000 portfolio passing through probate, that is about $6,750, plus a settlement process that commonly takes months rather than the weeks a directly-paid beneficiary designation takes.
There is also a behavioural benefit that does not show up in any fee table. The single largest destroyer of retail investment returns is selling at the bottom of a downturn. A contractual floor is one of the few things that reliably keeps an anxious investor holding their allocation through a bad quarter instead of locking in losses.
None of this means a segregated fund is the right fit for every dollar. Money you can afford to leave fully exposed to the market, with no need for creditor protection or probate bypass, is often better served by a lower-fee mutual fund or ETF. This is exactly the kind of decision worth making with an independent advisor rather than defaulting to whatever a single bank branch happens to sell.
How the mechanism works
Is this a fit?
- Investors who want market exposure but can’t stomach the idea of losing their principal
- Business owners or professionals who value potential creditor protection
- Anyone who wants to name a beneficiary directly and potentially bypass probate
Things to keep an eye on
- Fee drag on long, flat markets: the guarantee costs the same whether markets are up or down, so it delivers the most value during volatility and less during a long, calm bull run
- Reset timing: resetting locks in gains but can reset the maturity clock, so check the new maturity date before requesting one
- Beneficiary designation errors: an outdated or missing beneficiary can send the payout through your estate anyway, defeating the probate-bypass benefit entirely
- Contract wording varies by insurer and by guarantee class: confirm the exact guarantee percentage, reset rules, and age-80 cutoff on your specific contract
FAQs
Are segregated funds cheaper than a mutual fund or ETF?
No, and it would be misleading to say otherwise. Equitable's current GIF lineup runs roughly 1.95% to 3.81% MER, generally above a comparable mutual fund. The higher fee is the price of the guarantee, the reset feature, and the estate benefits. If none of those matter to your situation, a lower-cost fund or ETF may be the better fit.
What happens if the market crashes right before maturity?
Your guarantee still applies. If your contract guarantees 75% of deposits and the market has fallen well below that, you still receive at least 75% of what you put in, net of withdrawals, at the maturity date.
Can I lose the guarantee by switching funds?
Switching between the funds available inside your contract does not cancel the guarantee. Withdrawing money does reduce the guaranteed amount proportionally, since the guarantee is based on deposits net of withdrawals.
How does the creditor protection actually work?
When a properly designated beneficiary is in place (typically a spouse, child, grandchild, or parent, under Ontario insurance law), segregated fund assets may fall outside the reach of creditors in a bankruptcy or lawsuit. This is potential, not automatic, and depends on the circumstances and timing of the deposits, so it is worth discussing directly.
Is the death benefit guarantee the same as the maturity guarantee?
Not always. Equitable's Estate Class, for example, guarantees 75% at maturity but 100% on death. Read the specific guarantee level of your contract rather than assuming both numbers match.
What is a reset, and should I do it every year?
A reset locks in current market gains as your new permanent guarantee. It is usually worth doing after a strong year. It is not always worth doing after a flat or down year, since resetting can extend the maturity date and, on some contracts, slightly increase ongoing fees.
Do I need a medical exam to open a segregated fund contract?
Generally no. Underwriting is light since the guarantee insures your investment rather than your life, though very large deposits may prompt additional source-of-funds questions.
Equitable GIF segregated fund lineup
Data as of June 30, 2026, sourced from Equitable's public fund tool. A representative subset spanning every asset class and risk band shown here — not the full lineup of several hundred share-class variants. MER varies by the guarantee level you choose (75/75, 75/100, or 100/100) for segregated funds; the figure shown is one representative series. This covers current Equitable GIF contracts only — legacy contracts (Pivotal Select, Pivotal Solutions, Pivotal Solutions II, Personal Investment Portfolio) have a separate, closed fund lineup.
| Fund name ↑ | Category | Risk | MER | 1 yr | 3 yr | 5 yr | 10 yr | Equity / FI |
|---|---|---|---|---|---|---|---|---|
| Equitable Balanced | Global Neutral Balanced | Low to Medium | 2.45% | 14.8% | 10.8% | 5.6% | 5.0% | 50 / 50 |
| Equitable Bond | Canadian Fixed Income | Medium | 2.11% | 1.6% | 2.6% | -1.0% | 0.0% | 0 / 100 |
| Equitable Brandes Global Equity | Global Equity | Medium to High | 2.83% | 19.5% | 19.9% | 13.3% | 10.6% | 100 / 0 |
| Equitable Brandes International Equity | International Equity | Medium | 2.82% | 24.1% | 21.2% | 13.9% | 9.4% | 100 / 0 |
| Equitable Brandes U.S. Equity | U.S. Equity | Medium | 2.69% | 21.3% | 16.5% | 12.1% | 11.7% | 100 / 0 |
| Equitable Canoe Asset Allocation Portfolio | Tactical Balanced | Low | 2.63% | 10.9% | 11.2% | 8.4% | 8.5% | 55 / 45 |
| Equitable Canoe Enhanced Income | Canadian Fixed Income Balanced | Medium to High | 2.58% | 5.4% | 6.5% | 3.2% | 3.2% | 25 / 75 |
| Equitable Dynamic American | U.S. Equity | Low | 3.13% | 22.8% | 18.1% | 8.9% | 10.8% | 100 / 0 |
| Equitable Dynamic Asia Pacific Equity | Asia Pacific Equity | Medium to High | 3.71% | 21.4% | 5.4% | -8.5% | 2.8% | 100 / 0 |
| Equitable Dynamic Value Balanced | Canadian Equity Balanced | Low | 3.22% | 17.4% | 11.5% | 6.9% | 5.4% | 70 / 30 |
| Equitable Fidelity® Climate LeadershipSI | Global Equity | Low to Medium | 2.91% | 20.4% | 18.5% | 9.8% | — | 100 / 0 |
| Equitable Franklin Canadian Monthly Income and Growth | Canadian Neutral Balanced | Low to Medium | 2.72% | 11.6% | 8.7% | 5.2% | 4.7% | 50 / 50 |
| Equitable Franklin ClearBridge Canadian Equity | Canadian Equity | Medium to High | 2.80% | 18.3% | 14.2% | 10.8% | 8.4% | 100 / 0 |
| Equitable Franklin ClearBridge Dividend Income | Canadian Equity Balanced | Low | 3.32% | 17.0% | 11.4% | 7.8% | 6.5% | 70 / 30 |
| Equitable Franklin Quotential Balanced Growth Portfolio | Global Neutral Balanced | Low | 2.91% | 15.7% | 11.7% | 5.8% | 5.6% | 50 / 50 |
| Equitable Franklin Quotential Balanced Income Portfolio | Global Fixed Income Balanced | Low | 2.84% | 10.8% | 8.5% | 3.4% | 3.6% | 25 / 75 |
| Equitable Franklin Quotential Diversified Equity Portfolio | Global Equity | Low | 3.12% | 25.2% | 17.6% | 9.8% | 9.4% | 100 / 0 |
| Equitable Franklin Quotential Growth Portfolio | Global Equity Balanced | Low | 2.96% | 20.7% | 15.0% | 8.3% | 7.5% | 70 / 30 |
| Equitable Growth | Global Equity Balanced | Low to Medium | 2.54% | 18.2% | 12.9% | 7.4% | 6.7% | 70 / 30 |
| Equitable Income | Canadian Neutral Balanced | Medium to High | 2.45% | 12.0% | 9.7% | 4.6% | 4.1% | 50 / 50 |
| Equitable Invesco EQV Canadian Premier Equity | Canadian Focused Equity | Low | 3.63% | 37.1% | 24.1% | 15.6% | 10.3% | 100 / 0 |
| Equitable Invesco European Equity | European Equity | Low | 3.16% | 26.4% | 14.6% | 1.9% | 5.4% | 100 / 0 |
| Equitable Invesco International Growth | International Equity | Medium | 2.86% | 11.8% | 8.0% | -2.3% | 3.6% | 100 / 0 |
| Equitable Invesco NASDAQ 100 ESG Index ETFSIINDEX | U.S. Equity | Low | 2.41% | 38.6% | 27.4% | 18.4% | 21.5% | 100 / 0 |
| Equitable Invesco S&P/TSX Composite ESG Index ETFSIINDEX | Canadian Equity | Low | 2.35% | 33.2% | 21.2% | 11.5% | 9.1% | 100 / 0 |
| Equitable Mackenzie Bluewater Canadian Growth Balanced | Canadian Equity Balanced | Medium to High | 2.84% | -2.0% | 3.9% | 2.5% | 4.5% | 70 / 30 |
| Equitable Mackenzie Emerging Markets | Emerging Markets Equity | Low to Medium | 2.86% | 48.7% | 27.4% | 10.7% | — | 100 / 0 |
| Equitable Mackenzie Income | Canadian Fixed Income Balanced | Medium to High | 2.87% | 8.1% | 7.0% | 2.5% | 2.9% | 25 / 75 |
| Equitable Mackenzie Ivy Canadian Balanced | Canadian Equity Balanced | Medium to High | 2.85% | 9.3% | 10.0% | 6.9% | — | 70 / 30 |
| Equitable MFS Balanced | Global Neutral Balanced | Medium | 2.89% | 12.8% | 11.1% | 5.6% | 6.0% | 50 / 50 |
| Equitable MFS Canadian Equity Plus | Canadian Focused Equity | Medium | 2.92% | 20.9% | 17.6% | 10.6% | 9.9% | 100 / 0 |
| Equitable MFS Low Volatility Canadian Equity | Canadian Equity | Low to Medium | 2.60% | 20.1% | 19.0% | 11.9% | 9.5% | 100 / 0 |
| Equitable Money Market | Canadian Money Market | Medium | 1.49% | 1.5% | 2.6% | 2.1% | 1.1% | 0 / 100 |
| Equitable Vanguard Canadian Aggregate Bond Index ETFINDEX | Canadian Fixed Income | Medium to High | 2.02% | 2.0% | 2.5% | -1.1% | -0.3% | 0 / 100 |
| Equitable Vanguard Global All Cap ex Canada Index ETFINDEX | Global Equity | Low | 2.48% | 30.0% | 20.4% | 11.5% | 11.2% | 100 / 0 |
| Equitable Vanguard S&P 500 Index ETFINDEX | U.S. Equity | Medium | 2.33% | 27.8% | 21.4% | 14.2% | 13.9% | 100 / 0 |
Equitable Balanced
Equitable Bond
Equitable Brandes Global Equity
Equitable Brandes International Equity
Equitable Brandes U.S. Equity
Equitable Canoe Asset Allocation Portfolio
Equitable Canoe Enhanced Income
Equitable Dynamic American
Equitable Dynamic Asia Pacific Equity
Equitable Dynamic Value Balanced
Equitable Fidelity® Climate LeadershipSI
Equitable Franklin Canadian Monthly Income and Growth
Equitable Franklin ClearBridge Canadian Equity
Equitable Franklin ClearBridge Dividend Income
Equitable Franklin Quotential Balanced Growth Portfolio
Equitable Franklin Quotential Balanced Income Portfolio
Equitable Franklin Quotential Diversified Equity Portfolio
Equitable Franklin Quotential Growth Portfolio
Equitable Growth
Equitable Income
Equitable Invesco EQV Canadian Premier Equity
Equitable Invesco European Equity
Equitable Invesco International Growth
Equitable Invesco NASDAQ 100 ESG Index ETFSIINDEX
Equitable Invesco S&P/TSX Composite ESG Index ETFSIINDEX
Equitable Mackenzie Bluewater Canadian Growth Balanced
Equitable Mackenzie Emerging Markets
Equitable Mackenzie Income
Equitable Mackenzie Ivy Canadian Balanced
Equitable MFS Balanced
Equitable MFS Canadian Equity Plus
Equitable MFS Low Volatility Canadian Equity
Equitable Money Market
Equitable Vanguard Canadian Aggregate Bond Index ETFINDEX
Equitable Vanguard Global All Cap ex Canada Index ETFINDEX
Equitable Vanguard S&P 500 Index ETFINDEX
Equity / fixed income split is estimated from each fund's asset-class category, not a precise published allocation. Confirm exact holdings in the fund facts document before relying on it.
Past performance does not guarantee future results. Fund values fluctuate and are invested at the contract holder's risk. Read the Contract and Information Folder before investing. See the complete, current fund list ↗
Priya is 45, self-employed, and has just sold a small business interest for $50,000 she does not need for at least 15 years. She is uncomfortable with the idea of a market downturn wiping out a chunk of that money right before she needs it, and as a sole proprietor she is also thinking about creditor exposure.
She chooses an Estate Class segregated fund contract with a 75% maturity guarantee and 100% death benefit guarantee, split across a balanced fund and a Canadian equity fund. The guarantee costs more than a comparable mutual fund would, roughly 2.5% to 3% MER instead of 1.5% to 2%, but Priya decides the floor and the potential creditor protection are worth the difference for money she considers untouchable.
In year 1, her $50,000 is worth $52,000 after a decent year in the markets. She requests a reset, locking in a new guaranteed floor of $39,000 (75% of the higher value) rather than the original $37,500.
By year 10, after resetting twice more during strong years and riding out one downturn without resetting, her guaranteed floor has climbed to roughly $46,000 while her actual market value sits around $71,000.
By year 25, well past her original 15-year horizon, she has extended the contract and reset several more times. Her guaranteed floor is now $58,000, comfortably above her original deposit, and the market value has grown to roughly $118,000.
Priya never needs to rely on the guarantee, since markets cooperated. But she also never lost a night of sleep over a downturn wiping out money she had already earmarked, and on her death the full market value passes directly to her named beneficiary, outside her estate, without probate delay.
Actual rates depend on health, age, and underwriting. Contact Achyut for a personalized quote. Figures are rounded for illustration and will differ from your actual quote.
The guarantee and the estate bypass, charted
How the guarantee floor rises with resets
Market value moves with the underlying investments. Each reset after a strong year locks that year's value in as the new permanent guaranteed floor, which can never fall even if markets do.
Illustrative, following the Priya example above. Actual reset timing and resulting floor depend on your specific contract, the guarantee level chosen, and real market performance.
Ontario Estate Administration Tax: probate vs. named beneficiary
Assets passing through probate owe roughly 1.5% above the first $50,000. A segregated fund contract with a named beneficiary bypasses probate, and this tax, on that portion entirely.
Based on Ontario's Estate Administration Tax: 0% on the first $50,000, approximately 1.5% above that. Other estate costs (legal, executor fees) aren't included here.
Achyut is an independent LLQP-licensed advisor, not a branch representative tied to one company. That means comparing products across insurers for your actual situation, not selling from a single proprietary shelf.