Segregated fund were initially designed by an insurance company to compete against the mutual funds. Segregated fund policy is the policy under which investor’s return are based on the return earned by insurer on a specific group of properties. Now day’s numbers of mutual fund companies are in partnership with different insurance companies to offer segregated funds to their investors.

An investor can enjoy different sole benefits under segregated mutual funds. Segregated funds offer following major benefits to their investors.

Investors get the guarantee of principle amount on the maturity of the fund term or on the death of the investor. This mean you get the 100 percent amount surely that you invest in segregated mutual funds on the maturity or in case of untimely death of the investor. They only deduct the management fees and the money withdrawal.

Segregated funds offer a credit protection means if you declare bankrupt, creditor cannot access your segregated funds. Investor’s spouse or family members need not to pay the estate probate fees in case of death of the investor.

Investor can enjoy the freeze option under the segregated funds that allow investor to lock in the investment gains and thereby increase the investment guarantee. This can be a powerful strategy during volatile capital market.

There are certain other benefits that an investor can enjoy under segregated funds and have lesser importance.

Investors get a report called T3 tax slip that shows the gains and losses with the sale and purchase of funds during a year. This can be helpful information for the tax calculations. These funds can serve as an "in trust account," which is useful if you wish to give money to minor children, but with some chain attachment.