(NC)—Most financial analysts agree that financial markets follow natural high and low cycles. However, this latest market downturn has left many Canadian investors reeling, particular those who are looking forward to retirement in the next few years. Although there is always an element of risk when investing in market traded instruments, there is a product that offers investors with excellent growth potential while protecting capital.
Guaranteed Investment Funds
A guaranteed investment fund (GIF) works like a mutual fund. Deposits are divided across a number of funds to provide low-risk, well-balanced growth potential.
"One of the attractive features of this type of investment instrument is that your deposits are protected against market downturns," said Michael Aziz, regional vice president of investment product sales at Desjardins Financial Security. "Another excellent feature is that your beneficiaries are guaranteed to receive the full value of your investment in case of your premature death."
Funding a predictable retirement
Guaranteed investments funds can also include an option called the guaranteed minimum withdrawal benefit (GMWB). Investors who add the GMWB feature receive guaranteed and predictable retirement income over a set period of time. For example, an investor may choose to receive predetermined payments over 15 years. So, for the first 14 years, the investor will receive seven per cent of their deposit then two per cent in year 15. The payment amount remains constant regardless of market downturns. If the market experiences an upturn, investors will benefit by receiving extra payments.
"The GMWB feature is attractive because it provides predictable retirement income," said Aziz. "And, it adapts well to an investor's changing needs. Having peace of mind is truly a precious commodity these days."
More information is available online at www.dfs.ca/helios.
Source: www.newscanada.com
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