32 Best Mutual Funds In Canada (May 2022)

January 24, 2022
Blog

If you’re looking to increase the diversification of your portfolio, investing in mutual funds, index funds, or ETFs is a reasonable idea. Funds provide an easy way to gain exposure to different sectors in one place – but make sure to watch out for the management fees.

To start investing in some of these funds, all you need is a brokerage account – or better yet, a robo advisor. In terms of robo advisors, Wealthsimple is the one we can’t recommend enough: with its no-minimum starting investment, highly-rated app, low fees, and open access to financial advisors on-demand, it’s no wonder Wealthsimple remains Canada’s best robo-advisor.

What Are Mutual Funds?

Mutual funds are a type of fund that collects money from many investors to invest in financial instruments like bonds, stocks, or other securities.

Mutual funds are professionally managed: fund managers select and invest in equities that match the investors’ varied investment objectives and risk tolerances.

Should You Invest In Mutual Funds

Due to the expense and drawbacks of a professional portfolio manager, most investors agree exchange-traded funds (ETFs) and robo advisors are more cost-effective alternatives to mutual funds.

ETFs track indexes and are passively managed and don’t try to outperform the market; instead, they keep the same basket of stocks as the index they’re following. The objective is to match the benchmark result.

On the other hand, mutual fund managers try to beat the market, and in the long run, it isn’t sustainable. Currently, there are over 5,000 mutual funds in Canada, and if you’re going to invest in mutual funds, you must choose the best.

Without further ado, here are the best mutual funds Canada has to offer

The Best 6 Conservative Mutual Funds In Canada

Conservative mutual funds have very low-risk portfolios, comprising a mix of debt and equity instruments. A typical allocation for a conservative fund is between 20% to 40% of portfolio assets in equities and 60% to 80% split between bonds and cash.

A conservative portfolio is designed for an investor with a low tolerance for risk and a time horizon of three years or more.

#1 RBC Select Very Conservative Portfolio

SymbolRBF461
Minimum Investment$500
Management Fee (MER)1.84%
Net Assets (AUM)24 billion
12 Month Yield3.55%

#2 RBC Select Very Conservative Port A

SymbolRBF209
Minimum Investment$500
Management Fee (MER)1.59%
Net Assets (AUM)$11 billion
12 Month Yield3.55%

#3 RBC Select Balanced Portfolio A

SymbolRBF460
Minimum Investment$500
Management Fee (MER)1.67%
Net Assets (AUM)$28 billion
12 Month Yield3.22%

#4 TD Comfort Balanced Port – I

SymbolTDAM
Minimum Investment$100
Management Fee (MER)1.60%
Net Assets (AUM)$8 billion
12 Month Yield2.03%

#5 RBC Select Growth Portfolio A

SymbolRBF459
Minimum Investment$500
Management Fee (MER)1.76%
Net Assets (AUM)$8 billion
12 Month Yield2.87%

#6 Scotia Partners Growth Portfolio

SymbolBNS348
Minimum Investment$500
Management Fee (MER)2.05%
Net Assets (AUM)$3 billion
12 Month Yield2.28%

The Best 6 Fixed Income Mutual Funds

Fixed-income mutual funds are among the most common type of conservative low-risk funds. They’re ideal for people seeking a consistent stream of income rather than growth. Beware, however, because bond yields have dropped to historic lows and inflation has risen, coupled with the fund’s management fees, may make fixed-income funds less than ideal investments.

#7 RBC Bond Fund O

SymbolRBF270
Minimum Investment$500
Management Fee (MER)1.09%
Net Assets (AUM)$19 billion
12 Month Yield8.21%

#8 TD Canadian Bond Fund – O

SymbolTDAM
Minimum Investment$500
Management Fee (MER)1.10%
Net Assets (AUM)$13 billion
12 Month Yield7.15%

#9 RBC Global Corporate Bond Fund O

SymbolRBF580
Minimum Investment$500
Management Fee (MER)1.72%
Net Assets (AUM)$12 billion
12 Month Yield5.94%

#10 TD Canadian Core Plus Bond – O

SymbolTDB778
Minimum Investment$100
Management Fee (MER)1.36%
Net Assets (AUM)$12 billion
12 Month Yield6.29%

#11 PH&N Bond Fund O

SymbolRBF5110
Minimum Investment$500
Management Fee (MER)0.40%
Net Assets (AUM)$10 billion
12 Month Yield8.35%

#12 CI Global Energy Corporate Class F

Symbol
Minimum Investment$500
Management Fee (MER)1.25%
Net Assets (AUM)$81 million
12 Month Yield9.50%

The Best 5 Large-Cap Mutual Funds

Large-cap mutual funds invest in established companies with a solid track record of growth. However, because they are already well-known, future growth prospects may be limited.

Large-cap stocks can also generate a great deal of passive income since most large companies pay out dividends. Which fund is appropriate for you depends on how much exposure outside of Canada you want. Because most large-cap Canadian firms are concentrated in the energy, utilities, and financial sectors, it’s a good idea to invest outside Canada in the United States, Europe, or Asia to increase diversification. We recommend checking our list of the best China exchange-traded funds available in Canada.

#13 RBC European Equity Fund O

SymbolRBF457
Minimum Investment$500
Management Fee (MER)2.11%
Net Assets (AUM)$7 billion
12 Month Yield6.36%

#14 RBC Canadian Dividend Fund A

SymbolRBF266
Minimum Investment$500
Management Fee (MER)1.76%
Net Assets (AUM)$7 billion
12 Month Yield-11.50%

#15 PH&N US Multi-Style All-Cap Equity Fd O

SymbolRBF7380
Minimum Investment$500
Management Fee (MER)1.02%
Net Assets (AUM)$6 billion
12 Month Yield10.59%

#16 RBC Canadian Dividend Fund O

SymbolRBF266
Minimum Investment$500
Management Fee (MER)1.88%
Net Assets (AUM)$6 billion
12 Month Yield-10.60%

#17 Mawer International Equity Series O

SymbolMAW102
Minimum Investment$500
Management Fee (MER)1.40%
Net Assets (AUM)$5 billion
12 Month Yield6.80%

The Best 5 Mid/Small Cap Mutual Funds 

Mid and small-cap mutual funds offer more growth potential than large-cap companies – but it comes at a price. Since these companies are not fully established yet, they could easily fail. This type of mutual fund is for investors with a fairly high-risk tolerance.

#18 EdgePoint Global Portfolio Series F

SymbolEDG580
Minimum Investment$500
Management Fee (MER)2.12%
Net Assets (AUM)$3 billion
12 Month Yield-11.50%

#19 EdgePoint Global Portfolio Series A

SymbolEDG100
Minimum Investment$500
Management Fee (MER)2.12%
Net Assets (AUM)$2 billion
12 Month Yield-12.60%

#20 Mawer Global Small Cap Series O

SymbolMAW250
Minimum Investment$500
Management Fee (MER)1.76%
Net Assets (AUM)$2 billion
12 Month Yield9.60%

#21 Mackenzie US Mid Cap Growth Cl F

SymbolMFC8113
Minimum Investment$500
Management Fee (MER)1.04%
Net Assets (AUM)$1 billion
12 Month Yield3.40%

#22 Mawer New Canada Series 

SymbolMAW207
Minimum Investment$500
Management Fee (MER)1.35%
Net Assets (AUM)$2 billion
12 Month Yield5.30%

The Best 5 Real Estate Mutual Funds

Real estate mutual funds benefit from being a tangible asset class, distinct from stocks and bonds. Real estate funds offer a layer of diversification that equities and bonds do not. Real estate may provide exposure to the infrastructure and financial markets while also having potential for income generation and growth.

#23 Signature Global REIT A

SymbolCIG5020
Minimum Investment$500
Management Fee (MER)2.32%
Net Assets (AUM)$851 million
12 Month Yield3.60%

#24 Russell Inv Global Real Estate Pool O

SymbolFRC128
Minimum Investment$500
Management Fee (MER)1.20%
Net Assets (AUM)$424 million
12 Month Yield3.98%

#25 Scotia Private Real Estate Income Pool

SymbolBNS655
Minimum Investment$500
Management Fee (MER)1.90%
Net Assets (AUM)$8 billion
12 Month Yield30.68%

#26 CIBC Canadian Real Estate Fund

SymbolCIB506
Minimum Investment$500
Net Assets (AUM)$54 billion
12 Month Yield22%

#27 Middlefield Real Estate Class A

SymbolMID600
Minimum Investment$500
Management Fee (MER)2.25%
Net Assets (AUM)$33 million
12 Month Yield17%

Best 5 Emerging Market Mutual Funds

Emerging market mutual funds are one of the top-performing mutual funds. They have a high-profit potential, but they also come with many risks because they invest in developing countries still in the process of building infrastructure and financial systems. They provide big upside potential and significant danger – some popular emerging markets are Brazil, Russia, India, and China. 

These are very long-term holds; you must accept a certain level of volatility – and if you’re investing in mutual funds, you can expect the management fees to start chipping at your profits. It might be worth looking instead at emerging market ETFs. You have the same exposure to emerging markets but skip on the high fees from mutual funds.

#28 RBC Emerging Markets Equity Fund

SymbolRBF499
Minimum Investment$500
Management Fee (MER)1.85%
Net Assets (AUM)$7 billion
12 Month Yield-4.60%

#29 BlueBay Emerging Markets Corp Bd O

SymbolRBF491
Minimum Investment$500
Management Fee (MER)1.75%
Net Assets (AUM)$1 billion
12 Month Yield-1.30%

#30 Fidelity Emerging Markets Portfolio Sr O

SymbolFID275
Minimum Investment$500
Management Fee (MER)2.29%
Net Assets (AUM)$4 billion
12 Month Yield-41.19

#31 CIBC Emerging Markets Fund

SymbolCIB519
Minimum Investment$500
Management Fee (MER)1.00%
Net Assets (AUM)$160 million
12 Month Yield1.20%

#32 TD Emerging Markets Fund – I

SymbolTDB638
Minimum Investment$100
Management Fee (MER)2.87%
Net Assets (AUM)$279 million
12 Month Yield9.87%

Pros And Cons Of Mutual Funds 

Before deciding whether mutual funds are the right type of fund for you, here are the pros and cons of Canadian mutual funds.

Pros

  • Hands-Off Investment: Once you find a suitable mutual fund, you are pretty much done. The fund manager – or in the case of Index funds and ETFs, the benchmark index – will take care of all the investing.
  • Professionally Managed: The fund manager’s job is to make judgment calls about purchasing and selling assets in the fund. These are professional investors with years of experience under their belt.
  • Liquidity: Mutual funds have a high trading volume, which means they’re traded often and are much easier to sell than other assets, such as individual equities.
  • Diversification: Mutual funds allow you to participate in a portfolio of diversified assets without having to worry about managing or purchasing numerous assets yourself.

Cons

  • Minimum Investment: In general, a Canadian investment fund requires a minimum deposit of $100 to $3,000. For ETFs, it is as low as the price of a single share
  • Fees: The major disadvantage of mutual funds is that you may be charged whether the fund performs well or poorly. 

Conclusion

If you’re looking to increase the diversification of your portfolio, investing in mutual funds, index funds, or ETFs is a reasonable idea. Funds provide an easy way to gain exposure to different sectors in one place – but make sure to watch out for the management fees.

To start investing in some of these funds, all you need is a brokerage account – or better yet, a robo advisor. In terms of robo advisors, Wealthsimple is the one we can’t recommend enough: with its no-minimum starting investment, highly-rated app, low fees, and open access to financial advisors on-demand, it’s no wonder Wealthsimple remains Canada’s best robo-advisor.

FAQ

What Is The Minimum You Can Invest In A Mutual Funds

Mutual funds are often expensive for investors to get into; most retail mutual funds need a minimum initial investment of $100 to $5,000.

How To Invest In Canadian Mutual Funds

After identifying the mutual fund that matches your investment objective and risk tolerance, the next step is to invest in that fund.

Determine how much money you want to invest in assets, and keep in mind that a well-balanced mutual fund portfolio includes debt and equity securities.

After deciding how much to invest, you can use a robo advisor like Wealthsimple to start investing. Wealthsimple makes it very easy to invest, you can sign up for free, and there are no hidden fees or investment management fees.

You can also visit the site of the mutual fund company you want to invest in and initiate your application. After you’ve registered, make sure you diversify your portfolio and follow up on it to stay top of your investments.

Types Of Mutual Funds In Canada

It’s essential to know the different types of mutual funds available.

Here are the five major types of mutual funds in Canada to choose the best option for you. Here are the most common types of mutual funds.

  • Money Market: Money market mutual funds are fixed-income mutual funds that invest in high-quality, short-term debt from governments, banks, and corporations. These funds hold instruments, certificates of deposits and commercial paper.
  • Bond funds: The most frequent fixed-income mutual funds are called bond funds, where investors get a certain return on their original investment. Rather than investing in equities, bond funds invest in government and corporate bonds. Bond funds have a very conservative portfolio and are considered a safer investment than stocks – but they don’t offer much growth.
  • Equity Funds: Equity mutual funds invest in the stocks of various public companies. The majority of mutual funds available are equity investments. There is a greater chance for growth and a higher risk of loss with equity funds. Financial planners advocate that the younger you are, the more equity funds in your portfolio.
  • Balanced Funds: These funds, often known as asset allocation funds, combine equities and long-term bonds in a fixed proportion of 60% stocks and 40% bonds.

Are Mutual Funds Taxable

Yes. Mutual funds are structured in a way that incurs higher capital gains taxes than other types of funds. Mutual funds are actively managed, and the assets in a mutual fund are often sold and bought more frequently. The capital gains taxes are passed to everyone who owns shares in the fund.

Because of how they’re structured, ETFs are usually more tax-efficient than mutual funds. When an investor acquires a share of an ETF, they won’t have to pay capital gains taxes unless the shares are sold for a profit.

Are Mutual Funds A Good Investment Canada?

In Canada, mutual funds are an okay investment. The first mutual fund in Canada can be traced to 1932, and it was called the Canadian Investment Fund Ltd. Since then, things have changed. Mutual funds are more expensive than ETFs and can put your money to very bad use if you pick the wrong portfolio or have poor management by a portfolio manager. That’s why we recommend investing in ETFs instead.

Can You Lose Money In Mutual Funds?

Yes. As with any investment, there’s the risk of losing money. Diversification is a risk with any investment, and you may lose money by investing in a mutual fund. However, diversification is frequently built into mutual funds, which means that if you invest in one, you’ll be spreading your risk across many companies or sectors.

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