How to Choose a Fund

There are thousands of funds available on the Canadian market: bond funds, share funds, sectoral funds, specialized funds, regional funds, balanced funds… the list goes on and on. This can make choosing and evaluating the quality of a fund appear quite difficult.

Five Tips for Purchasing a Fund

1. Meet with your financial planner or adviser. He or she will help you determine your investor profile to make it easier to choose the investment solution or fund that’s right for you.
   
   
2. Respect your investor profile: align your investments with your goals, your investment horizon, and your risk tolerance for a strategy that’s tailored to your tastes.
   
   
3. Make sure the fund’s goals match your own. Some funds aim for capital growth, while others aim to produce a steady income or are more conservative—and still others carry greater risk. There are even funds that prioritize socially responsible investments. The fund prospectus you receive from your adviser contains information on this subject.
   
   
4. Examine the fund’s performance based on your investment horizon. If you are investing for retirement, you’ll want to look at the returns over a three, five, or ten year period.
   
   
5. Read the prospectus and carefully compare the funds.

You can also visit the Investment Funds Institute of Canada website, , which contains information on investment fund companies, and the website of Autorité des marchés financiers (AMF), whose mission is to protect investors.