Segregated funds performed well in 2024. Even those reporting below-average results managed solid returns as equities soared, with the S&P 500 up 23%. Fixed income also delivered decent returns after years of low interest rates.<\/p>\n
Among seg families with $500 million in assets under management (AUM), CDSPI had the best investment performance \u2014 88.9% of its AUM were in funds ranked in the first or second quartile by Morningstar Direct. It was the second year that the small dental not-for-profit (with $797.7 million in AUM) was at the top, by a wide margin.<\/p>\n
Investors Group ranked second, with 72.2% in first- or second-quartile assets. It was followed by RBC Insurance at 69.7%.<\/strong> Four others were between 62.2% and 65.3%, including Industrial Alliance Investment Management, which had AUM of $29.7 billion at Dec. 31, 2024.<\/p>\n
The other two big families, Manulife Investment Management (AUM of $36.5 billion) and the three Canada Life brands ($29.8 billion) \u2014 Canada Life, Great-West Life (GWL) and London Life \u2014 fared less well. Only 40.1% or less of AUM were in above-average performing funds.<\/p>\n
Equity gains were dominated by the Magnificent Seven technology companies \u2014 Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Nvidia Corp., Meta Platforms Inc. and Tesla Inc. If you didn\u2019t have healthy exposure to them, as was the case for Manulife, Canada Life\u2019s three brands and value stock picker Empire Life, you were likely to underperform.<\/p>\n
These seg families have a focus on risk management. \u201cDiversification is key to minimizing downside risk,\u201d said Sanjiv Juthani, head of product management at Manulife.<\/p>\n
Not all seg funds are open to new investors. GWL, London Life and Ivari funds will only continue for the length of their funds\u2019 current contracts.<\/p>\n