Are you looking for the best mutual funds Canada has to offer? The search for the right mutual fund can be overwhelming, but fear not!
In this blog post, we’ve got you covered. We’ll reveal the top-performing Mutual Funds in Canada with a track record of delivering consistent returns and explain why they’re worth investing in.
Mutual funds are a popular investment option among Canadians, offering diversification, professional management, and the potential for good returns.
But with so many options available, knowing which mutual funds are the best can be challenging. That’s why we’ve compiled a comprehensive list of the 15 best mutual funds in Canada and why they stand out from the rest.
In this article, you will also learn the basics of mutual funds, their pros and cons, and most importantly, the best mutual funds available in Canada. We’ll share our expert insights and guide you toward making a well-informed decision to achieve your investment goals.
Let’s get started and discover the Best Mutual Funds in Canada that could take your investment game to the next level.
Editor’s Choice of 7 Best Mutual Funds for Canadians in 2024
- Best Growth-Oriented Mutual Fund: Scotia Canadian Equity F Series
- Best Income-Focused Mutual Fund: PIMCO Monthly Income Fund F Series
- Best Balanced Mutual Fund: Manulife Fundamental Balanced Class F Series
- Best Precious Metal Mutual Fund: TD Precious Metal Funds F Series
- Best Real Estate Mutual Fund: RBC Canadian Core Real Estate Fund
- Best Emerging Markets Mutual Fund: Fidelity Emerging Markets Fund
- Best Technology Mutual Fund: TD Science & Technology Fund F Series
What are Mutual Funds?
A mutual fund is a popular investment vehicle that allows investors to pool their money together to invest in a diverse portfolio of securities, such as stocks, bonds, and other assets.
These funds are managed by professional money managers who use their expertise to make investment decisions on behalf of the fund’s investors. Investors do not have to make investment decisions independently, as the fund manager takes care of this on their behalf.
The fund managers analyse market trends and make investment decisions based on their expertise and the fund’s objectives, which can minimise the time and effort required to invest.
Investing in mutual funds is relatively easy, as investors can invest directly through a bank, a brokerage or a robo-advisor. A financial advisor can help guide those who need assistance towards the best funds for their needs.
However, it is important to note that mutual funds come with fees and expenses, which can impact the overall return on investment. These fees include management fees, operating expenses, and sales charges.
Overall, mutual funds are popular with many investors due to their diversification, professional management, and affordability. However, it is important to do your due diligence and carefully research a mutual fund before investing to ensure it aligns with your investment goals and risk tolerance.
Pros Cons
How We Chose The Best Mutual Funds in Canada
Mutual funds are an excellent option if you want to invest in the stock market without worrying about individual stocks’ volatility. However, with so many mutual funds available in Canada, choosing the best one for your investment goals can be challenging. That’s where we can help.
We have spent considerable time researching and analysing mutual funds to identify the 15 best mutual funds in Canada that can help you achieve your long-term investment objectives. Here are some of the critical factors we considered while selecting the best mutual funds in Canada:
- Investment Objective: Different mutual funds have varying objectives, such as long-term growth, income, or capital preservation. As investors, selecting a fund that aligns with your investment goals and risk tolerance is essential. We considered different investment objectives for different investors in Canada and picked the best mutual funds that align with any investment goal.
- Fund Type/Diversification: Diversification is essential for minimising risk in an investment portfolio. Mutual funds that are well-diversified across multiple sectors and geographic regions offer investors a more stable investment option. We selected the best mutual funds that offered a balanced mix of holdings.
- Historical Performance: Past performance does not guarantee future results, but it’s essential to consider when choosing mutual funds. The mutual funds’ historical performance is essential when selecting the best mutual funds. We analysed the mutual funds’ returns over the past five to ten years to identify consistent performers.
- Management Expense Ratio (MER) and Other Fees: Mutual funds come with various fees, including management fees, administration fees, and trading costs. High fees can significantly affect an investor’s returns, making low-cost funds more attractive. We selected the best mutual funds with considerable MER and other fees.
- Fund Manager Expertise and Experience: The fund manager’s experience and track record are crucial in determining the mutual fund’s success. We considered each fund manager’s tenure and performance track record while choosing the best mutual funds.
- Fund Size and Assets Under Management (AUM): AUM refers to the total value of all the assets a mutual fund manages on behalf of its investors. The size of a mutual fund’s AUM can provide an indication of its popularity, the level of trust that investors have in the fund, and the fund’s liquidity. We selected the best mutual funds with high assets under management.
Our Exclusive List of the 15 Best-Performing Mutual Funds in Canada
1. Mackenzie Canadian Equity F Series
- Inception Date: May 15, 2006
- Management Expense Ratio (MER): 0.99%
- Assets Under Management: $553 million
- Investment Style: Large-cap blend
The Mackenzie Canadian Equity Fund is a non-bank asset manager in Canada that offers a medium-risk Canadian equity mutual fund focused on large Canadian stocks. With a long performance track record, it has outperformed most of its competitors and manages many assets.
With a mix of Canadian stocks, bonds, and international investments, this fund is a top pick for investors seeking strong long-term performance and a diversified portfolio.
Combining value and growth stocks, this medium-risk mutual fund focuses on large Canadian companies, making it an excellent option for investors seeking exposure to the country’s top-performing stocks.
Although it is owned by IGM Financial, the parent group of IG Wealth Management, investors should look past the company’s poor reputation for selling underperforming funds with high fees.
Mackenzie invests in a mix of Canadian bonds and international assets, providing a well-diversified portfolio for investors.
2. PIMCO Monthly Income Fund F Series
- Inception Date: January 20, 2011
- Management Expense Ratio (MER): 1.39%
- Assets under Management: $22.7 Billion
- Investment Style: Medium Credit Quality, Medium Interest Rate Sensitivity
The Pimco Monthly Income Fund is a highly regarded bond fund in Canada, and it’s easy to see why. The fund has excellent performance and a long track record and has been a mainstay in many investment advisor models on the fixed-income side.
It invests in average-quality bonds while remaining sensitive to interest rate changes, contributing to its success.
The PIMCO Monthly Income Fund is one of the largest mutual funds in Canada by assets under management and is considered a low-risk investment, making it a suitable option for conservative investors.
3. TD Canadian Corporate Bond Fund F Series
- Inception Date: March 1, 2016
- Management Expense Ratio (MER): 0.68%
- Assets under Management: $3.27 Billion
- Investment Style: Medium Credit Quality and Medium Interest Rate Sensitivity
The TD Canadian Corporate Bond Fund is an excellent choice for investors looking to invest in bonds issued by Canadian companies. This mutual fund focuses on bonds issued by Canadian companies and boasts a medium-length performance track record with solid returns to back it up.
The fund has a medium-length track record of good performance and is considered one of the largest Canadian mutual funds in terms of assets under management.
However, investors should note that the strategy is sensitive to changes in interest rates and only invests in average-quality bonds.
Nonetheless, its overall low-risk classification makes it an attractive option for those seeking a steady, dependable source of income.
4. Scotia Canadian Equity F Series
- Inception Date: December 31, 1986
- Management Expense Ratio (MER): 1.05%
- Assets under Management: $306.47 Million
- Investment Style: Large-cap Blend
Scotia Canadian Equity Fund is a great investment option for Canadian investors looking to add Canadian exposure to their portfolio. With excellent long-term returns and a vast performance track record, this fund is a reliable option for investors.
As one of the larger funds in Canada by assets under management, it focuses on the stocks of larger Canadian companies across both value and growth styles, providing investors with exposure to a diverse range of assets.
Scotiabank’s Canadian Equity mutual fund is a great choice for investors looking to add Canadian stocks to their portfolio while balancing their overall risk level.
5. TD Precious Metal Funds F Series
- Inception Date: September 5, 2006
- Management Expense Ratio (MER): 1.11%
- Assets under Management: $132.45 Million
- Investment Style: Large-cap Growth
TD Precious Metal Fund is a mutual fund focusing on gold and silver mining companies and related securities. It is managed by TD Asset Management Inc. and aims to provide long-term capital growth and diversification.
Over the past five years, TD Precious Metal Funds F Series has outperformed the benchmark S&P/TSX Global Gold Index, with an average annual return of 12.69%. However, the fund’s performance can be volatile due to fluctuations in commodity prices and the concentration of its investments in the precious metals sector.
The expense ratio of TD Precious Metal Fund is higher than some passive index funds, with a management fee of 1.11% for the F series. It provides daily liquidity, but investors should know the liquidity risk associated with investments in smaller mining companies.
The fund’s holdings are concentrated in the precious metals sector, increasing the risk of investing in a single industry.
6. Canoe Global Equity F Series
- Inception Date: December 24, 2013
- Management Expense Ratio (MER): 1.25%
- Assets under Management: $912.65 Million
- Investment Style: Large-cap Growth
The Canoe Global Equity Fund offers an excellent option for Canadians wanting global equities exposure. The fund invests in large global stocks across the growth style and is considered a medium-risk investment.
The fund has a strong track record of performance across multiple time frames and is considered medium risk.
Although the fund has a medium-length performance track record, it is relatively large in size and has a significant amount of assets under management.
However, the fund has a relatively higher management expense ratio (MER) than its peers, which investors should consider when evaluating.
7. RBC Canadian Core Real Estate Fund
- Inception Date: October 30, 2019
- Management Expense Ratio (MER): 0.77%
- Assets under Management: $2.96 Billion
- Investment Style: Large-cap Value
The RBC Canadian Core Real Estate Fund is a mutual fund that invests in income-producing Canadian real estate assets.
Managed by RBC Global Asset Management, it aims to provide stable income and long-term capital growth. Over the past five years, the fund has outperformed its benchmark, delivering an average annual return of 6.26%.
The fund’s holdings are diversified across various real estate sub-sectors, including retail, office, industrial, and residential properties, which helps reduce risk.
The RBC Canadian Core Real Estate Fund is a suitable investment for those comfortable with the risks of real estate investing.
8. RBC Canadian Equity Income Fund F Series
- Inception Date: August 28, 2006
- Management Expense Ratio (MER): 0.76%
- Assets under Management: $3.14 Billion
- Investment Style: Large-cap Value
The RBC Canadian Equity Income Fund is one of the best Canadian equity mutual funds that pay out regular income to investors. As a medium-risk investment, the fund focuses on large Canadian stocks in the value style of investing.
Investing in the RBC Canadian Equity Income Fund is a smart choice for those looking to gain exposure to Canadian stocks while receiving regular income payments. Its long-term performance is excellent, making it a strong option for investors seeking reliable income payments and solid returns.
With its outstanding long-term performance record spanning many years, this fund has amassed significant assets under management.
By choosing this fund, you can benefit from the potential for long-term capital growth and enjoy a reliable mutual fund that prioritises capital growth and regular income.
9. Fidelity Emerging Markets Fund
- Inception Date: December 8, 1994
- Management Expense Ratio (MER): 2.23%
- Assets under Management: $4.386B
- Investment Style: Large-cap Blend
The Fidelity Emerging Markets Fund is a mutual fund that invests in companies in emerging markets like Brazil, China, and India. It is managed by Fidelity Investments and aims to achieve long-term capital growth through investing in companies that demonstrate strong growth potential and profitability.
Over the past five years, the fund has delivered an average annual return of 12.24%, outperforming the MSCI Emerging Markets Index by more than 1% annually.
The fund has daily liquidity, allowing investors to buy and sell units on any business day. The holdings are diversified across various emerging market sectors, including financials, consumer goods, and healthcare, reducing the risk of investing in a single stock or industry.
10. TD Science & Technology Fund F Series
- Inception Date: October 31, 2000
- Management Expense Ratio (MER): 1.38%
- Assets under Management: $124.7 million
- Investment Style: Large-cap Blend
The TD Science & Technology Fund is a well-managed mutual fund that primarily invests in the technology sector managed by TD Asset Management Inc.
It aims to achieve long-term capital growth through investments in companies with innovative technologies, superior products, and strong growth potential.
The fund has a good track record, delivering an average annual return of 24.45% over the past five years, outperforming its benchmark and the broader Canadian equity market.
While the expense ratio is higher than some passive index funds, active management provides the potential for higher returns. It has daily liquidity and diversified holdings across various technology sub-sectors, reducing investment risks.
Overall, the TD Science & Technology Fund is a suitable addition to a portfolio for those comfortable with equity investing.
11. Fidelity Canadian Short-Term Bond Fund F Series
- Inception Date: October 10, 2000
- Management Expense Ratio (MER): 0.60%
- Assets under Management: $540.2 Million
- Investment Style: Medium Credit Quality and Low-Interest Rate
The Fidelity Canadian Short-term Bond Fund from Fidelity, a globally recognised investment manager, provides an excellent fixed-income mutual fund for investors in Canada.
The fund has an impressive long-term performance, an extensive performance track record, and massive assets under management.
It focuses on investing in Canadian short-term bonds to reduce exposure to interest rates for investors by investing in average-quality bonds and maintaining average bond quality. This strategy makes it a low-risk fund, perfect for conservative investors.
With a strong reputation in the industry, The Fidelity Canadian Short-term Bond Fund has established itself as a reliable choice for investors seeking long-term returns.
12. NBI Global Equity Fund F Series
- Inception Date: December 24, 2013
- Management Expense Ratio (MER): 1.11%
- Assets under Management: $1.66 Billion
- Investment Style: Large-cap Growth
The NBI Global Equity Fund F Series is a mutual fund that invests in large global stocks across the growth style.
With a medium-length performance track record, this fund is an excellent choice to add to your portfolio if you want a growth-style option.
The fund’s performance has been consistently great, and it is one of the larger funds by assets under management. The fund’s risk level is labelled as a medium, which is standard for global equity funds.
Investors looking to diversify their portfolio with a globally focused mutual fund may consider National Bank’s Global Equity Fund.
13. Manulife Fundamental Balanced Class F Series
- Inception Date: March 21, 2012
- Management Expense Ratio (MER): 1.12%
- Assets under Management: $122.71 Billion
- Investment Style: Large-cap Growth
Manulife is a well-known insurance company offering various investment options in Canada. One such option is the Manulife Fundamental Balanced Class Fund, which invests in Canadian stocks and bonds.
This mutual fund’s long and impressive performance history makes it an attractive choice for investors. With a sizable asset under management, it is a significant player in the market.
The Manulife Fundamental Balanced Class is another investment option focusing on large, growth-oriented stocks. For bonds, the fund targets medium-quality issues sensitive to interest rate changes.
14. RBC Vision Global Equity Fund F Series
- Inception Date: July 3, 2007
- Management Expense Ratio (MER): 0.99%
- Assets under Management: $1.39 Billion
- Investment Style: Large-cap Growth
The RBC Vision Global Equity Fund is a mutual fund that offers exposure to global stocks, making it a top choice for investors seeking international diversification.
With a proven track record of strong long-term performance across multiple time frames, this large fund has amassed significant assets under management.
The fund focuses on large global stocks that align with a growth style, making it a medium-risk option.
Overall, the RBC Vision Global Equity Fund is an excellent investment choice for those seeking global equity exposure with a history of solid returns.
15. Beutel Goodman Core Plus Bond Fund F Series
- Inception Date: October 4, 2010
- Management Expense Ratio (MER): 0.63%
- Assets under Management: $3.989 Million
- Investment Style: Medium Credit Quality, High-Interest Rate Sensitivity
The Beutel Goodman Core Plus Bond Fund is a well-regarded fixed-income strategy in Canada that aims to provide investors with solid returns over the long term. This mutual fund has a strong track record and manages many assets.
The fund primarily invests in Canadian bonds, maximising performance while keeping risk minimal. This strategy does expose investors to potential interest rate changes, and the fund invests in bonds of average quality.
Despite these factors, Beutel Goodman considers the Core Plus Bond Fund to be a low-risk option. Overall, this mutual fund can be an excellent choice for those seeking reliable fixed-income returns and willing to tolerate a modest level of risk.
RELATED:Best Canadian ETFs: 22 Top-Performing Funds for 2024
Why Mutual Funds Are A Good Investment in Canada
Despite higher fees than ETFs, mutual funds are a popular investment choice in Canada. They offer active management potential, with select funds outperforming their benchmarks.
Financial advisors often sell mutual funds and provide valuable services such as tax advice, financial planning, and estate preparedness, which can be paid for by trailing commissions on mutual fund investments.
Investors can see their net asset value and performance anytime, and redemption features offer liquidity for those who want to cash out at any point. Investors who prefer a do-it-yourself approach can invest directly in mutual funds through a brokerage or robo-advisor.
Overall, mutual funds can be a powerful tool for Canadian investors to build their wealth, especially with a financial advisor who can help them find the right fund for their needs.
RELATED:12 Best Dividend ETFs in Canada For 2024
How to Buy the Best Mutual Funds in Canada
Investing in mutual funds is a great way to diversify your portfolio and earn higher returns. There are several ways you can buy mutual funds in Canada.
1. Banks
Banks in Canada often have their own mutual fund products that investors can access through their investment advisors or online platforms.
To buy mutual funds from a bank, investors typically need to have an account with the bank, which may require meeting certain eligibility criteria and providing identification and other personal information.
Once an account is set up, investors can work with an investment advisor to select mutual funds that align with their investment objectives, risk tolerance, and other factors.
When buying mutual funds from a bank, carefully review the fees and expenses associated with each fund, as these can significantly impact returns over time.
RELATED:A Comprehensive Guide to The Best Banks in Canada (2024)
2. Brokerages
Brokerages offer a range of mutual funds from different fund companies, allowing investors to choose the funds that best suit their investment goals and risk tolerance.
To buy mutual funds from a brokerage, investors typically need to open a brokerage account and fund it with the desired investment amount. The brokerage may charge fees, such as trading or account maintenance fees, which vary between brokerages.
RELATED:Questrade vs Wealthsimple: Canada’s Best Investing App
Here are our two top brokerages for buying mutual funds in Canada.
9.4 Wealthsimple Trade is a great trading platform that offers commission-free buying and selling of thousands of stocks. Its user-friendly interface and mobile-optimized investing dashboard make it easy to navigate and accept various payment methods, such as bank transfers and debit cards.In addition to traditional online stock trades, Wealthsimple Trade allows you to engage in other investment activities. It supports both taxable and registered (non-taxable) accounts such as RRSP and TFSA, and there is no minimum balance requirement when opening an account, making it accessible for investors with little money. Visit Wealthsimple TradeWealthsimple Trade
EDITOR'S CHOICE Questrade is an online discount brokerage established in 1999 with a $25 billion asset under management. Its popularity in Canada lies in its low commission, low trading fees, and multiple ranges of accounts. As a result, both beginners, intermediate and seasoned investors in Canada find Questrade attractive for DIY and active management investing. Key Features
Final Thoughts on the Best Mutual Funds in Canada
Investing in mutual funds is an excellent way to diversify your investment portfolio and achieve your long-term financial goals.
Canada offers a wide range of mutual funds, and selecting the best can be overwhelming. That’s why we’ve done the hard work for you by researching and analysing the best mutual funds in Canada.
So, whether you’re a seasoned investor or just starting, these mutual funds can help you achieve your financial goals. Our list has something for everyone, from low-risk fixed-income options to high-growth equity funds.
So, take the first step towards building your financial future, explore our list of the best mutual funds in Canada, and start your investment journey today.
FAQs on the Best Mutual Funds in Canada
Which Bank is Best for Mutual Funds in Canada?
To find the banks with the best mutual funds in Canada, compare different banks and their fees, services, and selection. Consider sharing purchase plans and reading customer reviews online to make an informed decision.
What is the Best-Performing Mutual Fund in Canada?
The Mackenzie Canadian Equity Fund, a non-bank asset manager in Canada, manages a medium-risk Canadian equity mutual fund that focuses on large Canadian stocks. It has a long track record of outperforming most competitors and manages many assets.
Are Mutual Funds Worth The Fees?
If a mutual fund consistently outperforms its benchmark by more than its fees, then its fees are worth paying. Most mutual funds are not worth their extra fees as portfolio managers typically underperform the market.
