What Are the Best Mutual Funds to Invest in Canada?
Most Canadian investors choose expensive funds that underperform – learn which lesser-known mutual funds actually deliver 9.93% returns and reliable income streams.
Canada’s top-performing mutual funds include AGF Global Select Series F for exceptional growth potential, Mawer Global Equity Fund offering stability with strong returns, and Canadian Balanced Private Pool delivering 3.65% yield alongside 9.93% annual performance. Manulife’s Monthly High Income Fund provides reliable 3.58% yield returns, while sector-specific options like RBC Life Science and Technology Series F target emerging trends. These professionally managed funds offer diversification, expert oversight, and regulatory compliance that helps investors navigate market complexities while building wealth through strategic portfolio allocation and all-encompassing risk management strategies.
While traversing Canada’s investment landscape can feel overwhelming, particularly for investors seeking reliable growth opportunities, mutual funds continue to represent one of the most accessible pathways to building diversified portfolios that balance risk management with capital appreciation potential. The current market environment showcases impressive performance metrics, with Canadian equity funds delivering 23.57% returns over the past twelve months and maintaining robust annualized returns of 13.54% over three years and 13.96% over five years.
Leading the performance rankings, AGF Global Select Series F demonstrates exceptional growth potential with its large-cap growth strategy and medium risk profile, managing $2.3 billion in assets while providing investors with global exposure. Mawer Global Equity Fund stands out for its stability and exceptional returns, offering diversified international equity exposure that effectively complements domestic holdings.
For income-focused investors, Manulife’s fund offerings present compelling opportunities, particularly the Monthly High Income Fund, which delivers a 3.58% yield alongside a 9.8% annual return as of mid-2025. The Canadian Balanced Private Pool provides enhanced diversification with a 3.65% yield and 9.93% return, demonstrating how balanced strategies can effectively serve investors seeking both income generation and capital appreciation.
Canadian equity specialists should consider CI Canadian Dividend Funds Series F for consistent dividend-focused performance, while technology enthusiasts might explore RBC Life Science and Technology Series F, which targets specialized sectors with significant growth potential. These sector-specific options allow investors to capitalize on emerging trends while maintaining professional management oversight. Many investors enhance their returns through dividend reinvestment plans that automatically reinvest distributions to harness the power of compound growth over time.
Exchange-traded fund alternatives, such as iShares Core Equity Portfolio, offer cost-effective solutions with 0.22% management fees and $6.71 billion in assets under management, delivering 24.08% three-year returns through extensive global exposure. The performance benchmark established by the Morningstar Canada Index, which returned 27.5% over the past year, provides context for evaluating fund performance against market standards. Mutual funds provide significant advantages including expert management by professionals, diversification to protect against risk, and lower costs through pooled resources. The DFA Canadian Vector Equity Fund has demonstrated strong five-year performance with 20.12% returns, making it a standout option among Canadian equity strategies.
Asset management leaders including CI Investments, RBC, Vanguard, Manulife, and BMO maintain high parent ratings for management quality, ensuring investors access professionally managed portfolios that meet stringent regulatory requirements while delivering consistent risk-adjusted returns across various market conditions.
Frequently Asked Questions
What Is the Minimum Investment Amount Required for Canadian Mutual Funds?
Canadian mutual funds typically require a minimum initial investment of $500 across major providers like RBC, Fidelity, and NEI Investments, making them accessible to retail investors.
However, specialized funds demand considerably higher minimums, ranging from $5,000 for certain Fidelity series to $150,000 for private investment pools, while subsequent contributions often require only $25-$50, enabling regular investment strategies.
How Are Mutual Fund Gains Taxed in Canada?
Mutual fund gains in Canada are taxed differently based on type and account holding. Capital gains from selling units are taxed at 50% inclusion rate for gains up to $250,000 annually, rising to 66.67% beyond that threshold starting 2026.
Distributions including dividends, interest, and capital gains are taxable when received in non-registered accounts, while registered accounts like RRSPs and TFSAs provide tax deferral or exemption benefits.
Can I Invest in Mutual Funds Through My RRSP or TFSA?
Investors can hold mutual funds within both RRSP and TFSA accounts, accessing tax-deferred growth in RRSPs with immediate contribution deductions, or tax-free growth and withdrawals through TFSAs.
Most Canadian mutual funds from major financial institutions qualify as eligible investments, allowing diversification across equity, fixed income, and balanced funds while maximizing compound growth through tax sheltering within these registered accounts.
What Fees Should I Expect When Investing in Mutual Funds?
Investors should expect Management Expense Ratios averaging 1.64% annually in Canada, which include management fees, administrative costs, and trailing commissions paid to advisors.
Additional fees may include front-end or back-end sales charges, transaction costs, and account administration fees depending on the fund provider and brokerage platform chosen, making all-inclusive fee comparison essential for long-term investment success.
How Often Can I Buy or Sell Mutual Fund Units?
Investors can buy or sell mutual fund units daily without regulatory frequency restrictions, though transactions settle on a T+1 basis in Canada.
While no maximum trading limits exist, excessive short-term trading may trigger regulatory scrutiny for market manipulation or, within TFSAs, potential tax consequences if the Canada Revenue Agency deems activity business-like rather than passive investing behavior.
What’s next?
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. Full details of coverage, including limitations and exclusions that apply, are set out in the certificate of insurance provided on enrollment.
This article is meant to provide general information only. It’s not professional medical advice, or a substitute for that advice.
Saphira Financial Group does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
