Twenty of Canada’s Best-Performing Mutual Funds for 2022
Mutual funds are one of Canada’s most popular investment instruments.
There are numerous types of mutual funds available, including money market and index funds.
Mutual funds are more expensive than exchange-traded funds (ETFs), therefore you must exercise prudence while investing in them.
This explains why so many Canadian investors seek the best mutual funds in Canada in order to limit risk and increase returns.
In addition, it is essential to search for the best mutual funds in Canada, where there are over 5,000,000 mutual funds.
What are Investing Funds?
When speaking of mutual funds in Canada, we are referring to monies pooled from multiple investors and invested in bonds, equities, or other securities.
These funds are managed by professional portfolio managers that select and invest in 0 securities that correspond to the various investment objectives and risk aversions.
Most investors view ETFs and Robo-advisors as cost-effective alternatives to mutual funds due to the expense and deficiencies of a professional portfolio manager.
A Look at Canadian Mutual Funds
The origin of mutual funds in Canada can be traced back to 1932, when Canadian Investment Fund Ltd was founded as the country’s first mutual fund.
However, Canadians did not take mutual funds seriously until the early 1990s, when the reduction in double-digit interest rates prompted investors to seek out stronger returns.
As a result, active management or mutual funds were viewed as the most effective means of “beating the market.”
Since then, mutual funds have continued to expand, resulting in the existence of over 100 mutual funds management firms today.
Types of Canadian Mutual Funds
To comprehend the top mutual funds in Canada, it is vital to be familiar with the various mutual fund types available.
Here are Canada’s five primary mutual fund categories:
1. Cash Market
This is the highest quality short-term mutual fund with the lowest dividends.
2. Fixed-Income Mutual Funds
Using the interest earned, fixed-income funds invest capital in the portfolio on a regular basis.
3. Stock Funds
The growth rate of equity funds is high, but they are riskier than fixed-income and money market funds.
4. Balanced Investment Funds
Balanced funds, as their name implies, attempt to limit risk while maximizing returns
5. Index Funds
Rather than employing a portfolio manager, index funds track the components of market indices using software. In contrast to other mutual funds, index funds offer low returns and low risk.
How Do I Select a Canadian Mutual Fund?
As previously said, Canada is home to over 5,000 mutual funds. However, not every option is suitable for you.
Consequently, you must select a mutual fund that corresponds to your investment objective and risk tolerance.
Consider the following factors while selecting the top mutual funds in Canada:
1. Risk Tolerance Level
Identifying your risk tolerance is the initial step in selecting the optimal investment vehicle.
Generally speaking, greater risk implies greater rewards in investing. Alternatively, low risk equals low profits.
2. Investment Purpose
Consider your investment objective to determine which mutual fund can assist you reach your objectives.
Whether you’re planning for retirement, debt repayment, house repair, etc., there is an appropriate mutual fund for you.
3. The Volatility of a Fund
A fund with a high level of volatility is associated with a high level of risk. If things don’t go as planned, there is a great likelihood of losing a lot of money.
Therefore, a low-volatility fund is excellent for short-term needs. However, if you intend to invest for the long term, a highly volatile fund may be ideal.
4. Fund’s Size
The size of a mutual fund has little effect on its ability to achieve investment objectives.
However, it will be more difficult for the portfolio manager to handle a huge fund.
Thus, the fund’s performance may suffer as a result of the need to modify its investing strategy to accommodate the massive investment inflows.
5. Returns
Examine a fund’s historical performance to determine how it will perform in both good and bad markets.
Despite the fact that the fund’s past performance may not provide a precise forecast, it will provide an indication of the fund’s volatility, allowing you to assess the risk associated with investing in that particular fund.
6. Costs and Charges
Mutual fund companies make revenue through fee collection. As previously stated, mutual fund expenses are relatively greater than those of ETFs and Robo-advisors.
However, mutual fund companies charge different fees. It is crucial to select the one with the lowest management fees and management Expense ratio (MER).
Are Mutual Funds Safe?
Mutual funds, like any other investment, are not entirely risk-free.
Mutual funds may be deemed secure because they are managed by skilled portfolio managers and controlled by prestigious organizations. Nevertheless, the portfolio in which you invest may impact the success of your investment.
Therefore, you should only invest in a portfolio that aligns with your investment goals and risk tolerance.
Canada’s premier conservative mutual funds
The low-risk portfolios of conservative mutual funds consist of debt and equity products. The most cautious allocation of mutual funds is to debt securities, with only a tiny allocation to equity securities.
Here are Canada’s most conservative mutual funds:
RBC Select Very Conservative Portfolio A
- Net asset: $11B
- Risk level: Conservative
- Management fee: 1.45%
- One-year return: 4.03%
- Three-year return: 2.67%
- Five-year return: 2.91%
RBC Select Conservative Portfolio A
- Net asset: $24B
- Risk level: conservative
- Management fee: 1.59%
- One-year return: 3.55%
- Three-year return: 2.71%
- Five-year return: 3.23%
RBC Select Balanced Portfolio
- Net asset: $27.5B
- Risk level: balanced
- Management fee: 1.67%
- One-year return: 3.22%
- Three-year return: 3.16%
- Five years return: 3.91%
Best Performing Fixed Income Mutual Funds in Canada
These refer to low-risk and conservative portfolios suitable for investors looking for stable income.
Here are the best fixed-income mutual funds in Canada:
RBC Global Corporate Bond Fond O
- Net asset: $11.5B
- One-year return: 5.94%
- Three-year return: 4.08%
- Five-year return: 4.31%
- Description: Global Fixed Income
RBC Bond Fund O
- Net asset: $19B
- One-year return: 8.21%
- Three-year return: 4.71%
- Five-year return: 4.41%
- Description: Canada Fixed Income
PH&N Bond Fund O
- Net Asset: $10B
- One-year return: 8.35%
- Three-year return: 4.58%
- Five-year return: 4.12%
- Description: Canada Fixed Income
TD Canadian Bond Fund – O
- Net asset: $13B
- One-year return: 7.15%
- Three-year return: 4.45%
- Five-year return: 3.90%
- Description: Canada Fixed Income
TD Canadian Core Plus Bond – O
- Net Asset: $11.5B
- One-year return: 6.29%
- Three-year return: 4.09%
- Five-year return: 3.85%
- Description: Canada Fixed Income
Top Large Market Cap Mutual Funds in Canada
As the name implies, large-cap mutual funds track large companies. These companies are usually profitable with excellent track records.
However, these large-cap mutual funds tend to have mid-high risk because big companies’ future potential is limited and they’re liable to fail.
Here are the best large-cap mutual funds in Canada:
RBC Canadian Dividend Fund A
- Net assets: $7B
- One-year return: -10.95%
- Three-year return: -0.84%
- Five-year return: 1.88%
- Description: Canadian Equity Large Cap
RBC European Equity Fund O
- Net assets: $7B
- One-year return: 6.36%
- Three-year return: 2.29%
- Five-year return: 4.01%
- Description: Europe Equity Large Cap
RBC Canadian Dividend Fund O
- Net assets: $6B
- One-year return: -9.38%
- Three-year return: 0.90%
- Five-year return: 3.66%
- Description: Canadian Equity Large Cap
PH&N US Multi-Style All-Cap Equity Fund O
- Net assets: $6.5B
- One-year return: 10.48%
- Three-year return: 9.07%
- Five-year return: 10.3%
- Description: US Equity Large Cap Blend
Mawer International Equity Series O
- Net assets: $5.5B
- One-year return: 5.89%
- Three-year return: 4.82%
- Description: Global Equity Large Cap
Best Mid/Small Market Cap Mutual funds in Canada
Mid/small-cap mutual funds refer to funds invested in companies that are not yet established.
However, while these funds have high growth potential, your risk tolerance level must be high to be comfortable with them.
Here are the best mid/small-cap mutual funds in Canada:
EdgePoint Global Portfolio Series A
- Net assets: $2.5B
- One-year return: -11.79%
- Three-year return: -0.11%
- Five-year return: 3.64%
- Description: Global Equity Mid/Small Cap
EdgePoint Global Portfolio Series F
- Net assets: $3B
- One-year return: -10.78%
- Three-year return: 1.03%
- Five-year return: 4.83%
- Description: Global Equity Mid/Small Cap
Mackenzie US Mid Cap Growth Cl F
- Net assets: $1B
- One-year return: 1.59%
- Three-year return: 9.27%
- Five-year return: 10.60%
- Description: US Equity Mid Cap
Mawer Global Small Cap Series O
- Net assets: $2B
- One-year return: 8.96%
- Three-year return: 9.90%
- Five-year return: 11.07%
- Description: Global Equity Mid/Small Cap
Will I Lose Money in Mutual Funds?
Yes and no. Like other investments, you can lose money in a mutual fund that doesn’t match your investment objective and risk tolerance or when a portfolio manager mismanaged your investment.
On the other hand, you may earn high returns when you choose the perfect portfolio handled by an expert portfolio manager.
The first step towards moving to Canada is to get an assessment of your specific situation. Call us today at +1 613.222.7154 for an assessment to see if you are eligible to move to Canada, or fill out our online assessment form.
