Funds built for different goals

When mutual fund managers build a fund, they include different quantities of the investments shown above depending on the objectives they want the fund to achieve for their investors, and how they want to balance risk and returns.

What are the main types of funds?

The ScotiaFunds line-up includes a broad range of funds that fall into five main categories - cash equivalent, income, balanced, equity, and index funds.

  • Cash Equivalent Funds

    These funds are likely to add stability to your portfolio by investing in relatively safe and short-term investments, such as treasury bills and other money market instruments. They are a good choice for short-term investment or as an alternative to a savings account.

  • Income Funds

    These funds give you potential for higher interest and income. They invest in high-quality bonds, mortgages, and dividend-paying shares. Income funds are a good choice if you want higher income in the mid- to long-term and can accept the possibility of declines in the value of your investment over the short-term, as they are more sensitive to changes in interest rates than cash equivalent funds.

  • Balanced Funds

    These funds offer a combination of equity, income-oriented investments, and cash equivalent securities in a single investment. If you prefer a simple, straightforward investment choice, a balanced fund can be considered a complete portfolio by itself. Generally, balanced funds provide more stable returns than equity funds, but present more risk than income funds.

  • Equity Funds

    Funds that invest in the stock markets of Canada, the U.S., and countries around the world offer the greatest potential for long-term growth by investing in common shares and other equity securities. These funds are a good choice for investors who are investing for the long term, who don't need regular income, and who are comfortable with the possibility of declines in the value of their investment.

  • Index Funds

    An index fund is a passive fund that replicates a market index. A market index is a basket of stocks or securities that is used as a benchmark, such as the Canadian S&P/TSX Composite Index or the New York Stock Exchange-based S&P 500 Index. Bond index funds generally provide more stable returns than index funds, and broadly diversified index funds are usually less risky than funds that focus on a narrowly defined market index.

These charts are used for illustrative purposes only, and do not represent the actual composition of specific funds.

There is no one magical investment that will deliver high income at no risk. Still, almost anyone is better off investing than not. The keys to investment success are getting the right advice, and finding the right fit for you. The first step is contacting us to arrange a face to face meeting. Let’s start building a plan that suits your current situation and your plans for the future.