Best Mutual Funds In Canada | Expert Guide

Investments are always volatile and unpredictable, and because of this reason a lot of people get scared to invest their money in securities.

This remains the story of many who have extra cash, but the investment market’s uncertainty keeps them from investing. Well, if you are in Canada, this piece compiles a list of the best mutual funds in Canada.

Mutual Funds offer you the opportunity to diversify risk, especially if you’re a new investor or have little capital. Mutual Funds are a very popular investment option in Canada. 

All you need to know about top-performing Canada mutual funds in 2023 is explained in detail.

However, this article is not financial advice to intending investors. Never invest in something you have little knowledge of. Therefore, you should seek the advice of a professional mutual funds manager or firm before making any investment decisions.

The table of contents above highlights everything discussed in this piece.

What is a Mutual Fund?

A mutual fund is an open-end, professionally managed investment fund that pools money from many investors to purchase securities. Wikipedia.

Mutual funds are investments where resources are gathered from various investors and invested in securities such as bonds, stocks, or assets. Shares in each portfolio are held by each investor, which all represent a part of a portfolio.

Mutual funds are one of the best options for new investors in the market who wouldn’t want to lose their money or make a bad decision but would rather trust an expert to handle their finances for them.

History of Canadian Mutual Funds

The pioneers of Canadian mutual funds the first mutual fund company was the Canadian Investment Funds Limited (CIF), established in 1932. The company’s assets rose to $51m in 1951, then it changed its name to Spectrum United Canadian Investment Fund in 1996 and back to CIF in 2002.

The industry wasn’t making it until the 1960s when low-interest rates and increased interest in getting back into the securities market had investors finding other ways for non-cash investing options. 

Canada experienced the most extensive entry of mutual funds in 1990 when the double digits interest rates that attracted Canadian savers to Guaranteed Investment Certificate (GIC) fell, and they moved into investments hoping to receive higher returns. Mutual funds assets rose from $25 billion in December 1990 to $426 billion in December 2001 and even more to $800 billion in 2013.

As at the time of the big housing market collapse and the recession of 2008, Canada excelled better than the world’s biggest economies, and this was greatly influenced by the country’s regulated banking system and strict mortgage rules.

How Does Mutual Funds Work?

Mutual funds work by pooling your financial resources with many other investors and investing the accumulated amount in securities. 

A mutual fund grants you the privilege of investing in portfolios you can’t afford alone by bringing together other investors. You can select one fund containing diverse securities, thereby diversifying the risk associated with individual securities.

Expert financial managers manage these mutual funds; they distribute their assets and try to make capital gains for the investors. Mutual funds managers charge annual fees known as expenses ratio for their services, usually including commissions.

The best mutual funds to buy in Canada

How Does Mutual Funds Pay?

A mutual fund is an investment platform and a company; the only difference between a mutual funds company and other companies is that mutual funds deal with investments alone, while the others deal with goods and services.

Just like every other investor in a company, mutual funds investors buy and have part ownership of the mutual fund’s company. Investors in a mutual funds company get their returns through the following:

#1. Capital gains

When the funds sell securities or assets that have increased in value, there’s a return in the form of capital gains distributed to investors.

#2. Sales of holdings

When the securities appreciate but are not sold out by the managers, each investor’s share price increases and they can sell it in the market for profit.

#3. Dividends

Interests are earned on bonds and income from dividends on stock held in the mutual fund’s portfolio, which is paid to investors in the form of distribution; the investors can decide to either put it back in the company and receive extra shares or get a check for distribution.

Can you buy mutual funds directly?

Mutual Funds can be bought from a mutual funds company, brokerage firm or bank, but you should have an account with any of these institutions before making a purchase.

Can you lose money in mutual funds?

Investments usually risk making losses; no expert can accurately predict how the security market works. You can permanently lose some or all of your investment in a mutual fund because the market is volatile and unpredictable.

The only thing mutual funds do is reduce the risk associated with you investing solely on your own because it pools income from different investors and diversifies the risk. The best solution when investing is to seek the assistance of professional mutual funds managers before making a decision.

Advantages and Disadvantages of mutual funds

The advantages of mutual funds include liquidity, diversification, dividend reinvestment and convenience.

While the disadvantages are high fee charges, management abuse, tax inefficiency, and poor trade execution.

Types of mutual funds

There are different types of mutual funds you can select from, and each of these mutual funds comes with its advantages and disadvantages. You can select based on varying factors like the risk involved, sectors, geographic location of the investment, etc. The following are the different types of mutual funds:

#1. Equity funds

These are mutual funds primarily invested in stocks, it could either be actively or passively managed. Equity or stock funds are characterized according to the holdings’ geographical location, company size, and investment style.

Equity mutual funds are one of the best options for new investors with little or no idea about investments or who have little capital to invest. 

#2. Money market funds

Money mutual funds invest mainly in cash and cash equivalent securities. It is also known as money market instruments. 

They are short-term investments with high credit qualities; investments in money market funds include instruments like US Treasuries, Certificate of Deposit, Commercial paper, Repurchase agreements etc. The lowest risk and returns characterize it. 

#3. Bond funds

Bond funds are also called debt funds. They are mutual funds that invest mainly in debts and other debts instruments. They do not have a maturity date for repayment of principle, therefore, the capital invested may fluctuate from time to time.

Investors get a monthly return on investment; long-term bonds have increased interest risk than short-term bonds, though with higher returns than money market funds.

#4. Hybrid funds

Asset allocation or hybrid funds are combinations of stocks, bonds, and other assets. Many of these funds can invest in additional mutual funds. It allows diversification among two or more purchases.

Why invest in mutual funds in Canada?

Canada mutual funds made it through the recession and have since gotten more robust and better, it has continued to serve as the best investment and saving option for her citizens.

Canada is one of the countries offering the best mutual funds globally. Mutual Funds in Canada are reputable and regulated by strict standards, making them a trustworthy portfolio. It has different levels of risk to suit each investor’s risk tolerance; with the variety of options available, you can select any one you like and invest in it.

How to invest in mutual funds in Canada?

Before committing your money to any mutual funds in Canada, you’ll need to consider the following:

Timeframe and Amount

It is very crucial to map out your financial goals before making any investment decisions, have a clear view of what you want to achieve, consider the period you’d like your investment to stay, is it long term or short term and the available amount you’re willing to invest.

Select the fund you want to invest in

When making a choice on the type of mutual funds you’d like to invest in, you should put into consideration the level of risk involved, if you have a low-risk tolerance them it is better to invest in mutual funds that have very low risk to avoid damaging consequences.

Compare the fee charges and performance between companies

Before investing in mutual funds in Canada, you should carry out comprehensive research on the charges and performance level between mutual funds companies and select the one that best suits you.

Select a professional legit mutual fund company

Make purchases from registered firms and individuals to avoid issues, these firms or individuals must be registered with their provincial securities regulator. 

Fill out application forms and make your purchase

Mutual Fund companies provide application forms to their investors to fill out, these forms are called the fund facts, you’re expected to fill in your personal details, how much risk you can tolerate and what you know about investments, after which the financial experts will offer their advise where necessary.

Best Mutual Funds in Canada

Before choosing the best mutual funds in Canada, you must first carry out a market research and know the level of risk you can accommodate, however, the higher the risk, the higher the increment in profit or growth, below are 20 best mutual funds in Canada:

#1. Conservative mutual funds

These are mutual funds that have very low risk, it is a good investment choice for investors who have low risk tolerance or are about to retire. Examples of conservative mutual funds are:

RBC Select Very Conservative Portfolio A  Risk level_ conservative

  • Net Assets_ $13 Billion
  • 1 year return_ 12.1%
  • 3 year return_ 4.6%
  • 5 year return_4.0%
  • MER_ 1.70%

RBC Select Conservative Portfolio A

Risk level_ conservative

  • Net Assets_ $24 Billion
  • 1 year return_ 17.5%
  • 3 year return_ 5.6%
  • 5 year return_ 5.2%
  • MER_ 1.84%

RBC Select Balanced Portfolio

  • Risk level_ Balanced
  • Net Assets_ $28 billion
  • 1 year return_ 25.6%
  • 3 year return_ 7.1%
  • 5 year return_ 7.1%
  • MER_ 1.94%

RBC Select Growth Portfolio A

  • Risk level_ Balanced
  • Net Assets_ $13 billion
  • 1 year return_ 30.5%
  • 3 year return_ 7.9%
  • 5 year return_ 8.2%
  • MER_ 2.04%

#2. Fixed income mutual funds

Fixed-income mutual funds are also called bonds funds. These funds generate a periodic return on investment until maturity, they own fixed income portfolios such as Municipal Bonds, US Treasuries, etc. Although they are one of the mutual funds to buy in Canada, they are low risk investment and provide the investors with a steady cash flow but no growth, examples include:

RBC Bond Fund O

  • Description_ Canadian fixed income
  • Net Assets_ $19 billion
  • 1 year return_  5.2%
  • 3 year return_ 4.8%
  • 5 year return_ 3.9%

TD Canadian Bond Fund O

  • Description_ Canadian fixed income
  • Net asset_ $14 billion
  • 1 year return_ 10.9%
  • 3 year return_ 5.0%
  • 5 year return_ 4.9%

RBC Global Corporate Bond Fund O

  • Description_ Global fixed income
  • Net assets_ $13 billion
  • 1 year return_ 10.9%
  • 3 year return_ 5.0%
  • 5 year return_ 4.7%

PH&N Bond Fund O

  • Description_ Canada fixed income
  • Net asset_ $10 billion
  • 1-year return_ 3.2%
  • 3-year return_ 4.4%
  • 5-year return_ 3.3%

TD Canadian Core Plus Bond_ O

  • Description_ Canada fixed income
  • Net asset_ $11.5 billion
  • 1-year return_ 6.29%
  • 3-year return_ 4.09%
  • 5-year return_ 3.85%

#3. Large Cap Mutual Funds

These equity funds invest a large share of their total assets in companies with large market capitalization. They are very reputable and have the best record of generating wealth for their investors in the long run. The level of risk associated with them is medium to enormous risk. Examples include:

RBC European Equity Fund O

  • Description_ European equity large cap
  • Net asset_ $7 billion
  • 1-year return_ 33.7%
  • 3-year return_ 7.7%
  • 5-year return_ 7.6%

RBC Canadian Dividend Fund A

  • Description_ Canadian equity large cap
  • Net assets_ $18 billion
  • 1-year return_ 34.1%%
  • 3-year return_ 7.3%
  • 5-year return_ 7.4%

PH&N US Multi Style All Cap Equity Fund O

  • Description_ US equity large cap blend
  • Net assets_ $8 billion
  • 1-year return_ 40.2%
  • Three year return_13.3 %
  • 5-year return_ 14.1%

RBC Canadian Dividend Fund O

  • Description_ Canadian equity large cap
  • Net asset_ $18.6 billion
  • 1-year return_ 36.4%
  • 3-year return_ 9.2%
  • 5-year return_ 9.3%

#4. Mid and Small Cap Mutual Funds

These are mutual funds that invest in growing companies that are not fully established. They have medium to huge risk levels but higher growth potential since the companies could fail. Mid and Small Cap Mutual funds are one of the mutual funds to buy in Canada. Examples includes:

Edgepoint Global Portfolio Series F

  • Description_ Global equity mid/small cap
  • Net assets_ $3 billion
  • 1 year return_ -10.78%
  • 3-year return_ 1.03%
  • 5-year return_ 4.83%

Edgepoint Global Portfolio Series A

  • Description_ global equity mid/small cap
  • Net assets_ $2.5 billion
  • 1 year return_ -11.79%
  • 3 year return_ -0.11%
  • 5-year return_ 3.64%

Mackenzie US Mid Cap Growth CL F

  • Description_ US equity mid-cap
  • Net assets_ $1billion
  • 1-year return_ 1.59%
  • 3-year return_ 9.29%
  • 5-year return_ 10.60%

Mawer Global Small Cap Series O

  • Description_ global equity mid/small cap
  • Net asset_ $2 billion
  • 1-year return_ 8.96%
  • 3-year return_ 9.90%
  • 5-year return_ 11.07%

#5. Best Emerging Market Mutual Funds

Emerging markets invest in economies that are still developing financial markets; they have a high-risk level but a high earning potential. Investments in this market are quite volatile, so you should have fair risk tolerance. Examples include:

RBC Emerging Markets Equity Fund O

  • Description_ global emerging markets equity
  • Net assets_ $4 billion
  • 1 year return_ -3.82%
  • 3-year return_ 2.09%
  • 5-year return_ 5.08%

Fidelity Emerging Markets Portfolio Series O

  • Description_ global emerging markets equity
  • Net assets_ $2 billion
  • 1-year return_ 5.54%
  • 3-year return_ 6%
  • 5-year return_ 7.93%

BlueBay Emerging Markets Corp Bd O

  • Description_ Emerging markets fixed income
  • Net Assets_ $1.5 billion
  • 1-year return_ 5.66%
  • 3-year return_ 4.47%
  • 5-year return_ 6.76%


This article contains detailed information on the best mutual funds in Canada. However, the data used in this write-up might not be accurate since investments are quite volatile and unpredictable. 

It is not a financial advisory document, though it serves as a guide in your investment decision. You can invest in mutual funds any time you like but conduct thorough research, map out your financial goals, and consider your capital and risk tolerance before investing.

Do not carry out any financial transactions on mutual funds without the assistance of a reputable mutual funds company or expert. Ensure that the mutual fund’s company or expert you’re working with is registered with the appropriate regulatory bodies in Canada.



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