10 Best Mutual Funds in Canada for 2024 (2024)

For many Canadians, mutual funds are one of the first investment assets we are introduced to. They are easy to understand while providing instant diversification for your portfolio.

With over 5,000 different mutual funds in Canada, it can be overwhelming to choose one to invest in. This list of the 10 best mutual funds in Canada for 2024 can provide a starting point for the vast world of Canadian mutual funds.

Top Canadian Mutual Funds for 2024

RBC Canadian Equity Income Fund F Series

The RBC Canadian Equity Income Fund F Series is one of the most popular all-equity mutual funds from RBC. It focuses on holding large-cap, high-dividend paying Canadian stocks and pays out distributions on a monthly basis with a 4.1% distribution yield.

This fund’s top three holdings are Royal Bank of Canada (RY.TO), Toronto Dominion Bank (TD.TO), and Enbridge Inc (ENB.TO).

As of April 30, 2023, RBF646 holds 106 different stocks with a 34% sector allocation to Financials and a 17.6% allocation to energy stocks.

RBF646 is great for investors seeking modest capital growth, portfolio stability, and high monthly distributions.

Canoe Global Equity Fund Series F

Canoe Financial is a Calgary-based independent financial management company that offers a number of different funds and ETFs for Canadian investors. GOC1043 is one of its best-performing mutual funds, with a 10-year CAGR of 13.4%.

This fund provides Canadian investors with global exposure. It has a 70.1% weighted allocation to US-listed stocks and 29.5% allocated to foreign stocks.

Its largest holdings are Microsoft (MSFT), Mastercard (MA), and Nestle SA (NESN).

Mackenzie Canadian Equity F Series

Mackenzie Investments is another private financial management company that was established in 1967. MFC1453 has long been popular with Canadian investors for its stellar record of returns, reasonable MER, and steady distribution history.

This fund focuses on large-cap Canadian equities with a total of 63 holdings. It has a 31.2% sector allocation to Financial stocks, with Royal Bank (RY.TO) and Toronto Dominion (TD.TO) as its largest holdings.

RBC Canadian Dividend Fund A

The RBC Canadian Dividend Fund A is one of the best mutual funds to invest in Canada. It has a long record of strong distributions that can be reinvested to grow your investment.

As its name suggests, this mutual fund has a strong focus on dividend-paying stocks and offers a 3.8% distribution yield that pays out on a quarterly basis.

RBF266 holds 64 different large-cap, dividend-paying Canadian stocks with a 42.2% concentration in the Financial sector. With over $19.5 billion in assets managed, this RBC dividend mutual fund is certainly among the best RRSP mutual funds to hold into retirement.

NBI Global Equity Fund Series F

NBI or the National Bank Investments Global Equity Fund Series F, is another excellent mutual fund for those seeking exposure to global equities with the potential for high growth.

This fund has a 5-year average annualized return of 13.01%, which far outperforms any of the major indices.

A total of 66.8% of the allocation in NBC767 F is to US-listed stocks. The rest of the holdings are split between the European Union, Asia, and Canada.

The largest sector allocation is to consumer goods, with a 24.23% weighting and a 19.91% allocation to technology stocks. Microsoft Corp (MSFT) is far and away the largest holding, with a 7.76% weighting in this fund.

Invesco Select Balanced Fund F Series

The Invesco Select Balanced Fund F Series is for those investors who are seeking a stable, all-in-one portfolio in one asset. This mutual fund holds a 20% allocation to corporate bonds and a 3.81% allocation to government bonds.

AIM1577 has a total of 211 holdings which consist of Canadian and US-listed equities and bonds. It doesn’t have the track record of growth that other funds on this list have, but with a lower MER and a higher margin of safety, this is one of the best-balanced mutual funds in Canada.

TD Canadian Bond Fund A

The TD Canadian Bond Fund A is our first fixed-income mutual fund on this list. As one of the best bond mutual funds in Canada, TDB306 has provided a rare combination of capital appreciation and a steady distribution.

This fund holds a 95% allocation to domestic Canadian bonds and seeks to track the performance of the FTSE Canada Universe Bond Index.

As with most fixed-income funds in Canada, TDB306 pays out a monthly distribution making this a good fund for investors seeking safety and income.

Mackenzie US Small-Mid Cap Growth Fund F

The second Mackenzie mutual fund on this list focuses on small-mid cap US stocks and tracks the Russell 2500 index as its benchmark. This fund has a history of stellar growth with a 10-year average annual return of 12.5%.

MFC8625.CF holds 36 different stocks with a 26.6% allocation to Industrials, 26.1% allocation to Healthcare, and a 25.5% allocation to the Information Technology sector.

This is an excellent mutual fund for Canadian investors seeking exposure to US small-mid cap stocks with the potential for high future growth.

CI Canadian Dividend Fund Series F

The CI Canadian Dividend Fund is one of the best dividend mutual funds in Canada. It holds $1.7 billion in net assets and has provided double-digit average annual returns over the past decade.

This fund invests primarily in large-cap Canadian dividend stocks but can invest up to 30% of its assets in foreign stocks.

With a monthly distribution and a balanced portfolio of the best Canadian dividend stocks, CIG11012 is a great investment for those seeking long-term income in retirement.

Pimco Monthly Income Fund F Series

We end with one of the largest mutual funds in Canada by net assets invested. The Pimco Monthly Income Fund is another fixed-income mutual fund that provides monthly income distributions to investors.

It holds a variety of bonds from different regions, providing both security and diversification for those seeking a more conservative income portfolio.

What is a Mutual Fund?

A mutual fund is essentially a giant pool of investor funds that is used to purchase investment assets. They have actively managed funds that do not trade on any exchange and instead are offered by banks or financial management companies.

They are one of the investment assets of choice for financial advisors and are one of the most commonly invested assets among Canadian investors.

Pros and Cons of Mutual Funds

Mutual funds offer a way to diversify your portfolio without having to buy individual stocks or bonds. These funds can provide a basket of assets and less volatility for the investments.

These funds are great long-term investments, and most provide distributions that can be reinvested to grow your investment over time.

The downside to mutual funds is their higher MER and management fees. You can usually find a similar ETF at a fraction of the cost.

You are also putting your faith in an active Fund Manager, compared to just investing in a low-cost index fund ETF. Unfortunately, most beginner and casual investors do not know the difference between the two asset types.

How to Buy Mutual Funds in Canada in 2024

Although mutual funds do not trade on stock exchanges, they can be bought at most brokerages in Canada.

Remember that mutual funds already have higher fees than other assets, so use a brokerage with lower commission fees. Some brokerages with lower mutual fund fees include CIBC Investor’s Edge and Qtrade.

Are Mutual Funds a Good Investment

Mutual funds are simple and straightforward investments for those who do not wish to be active investors. Oftentimes people who go to a financial advisor or financial planner will be told to invest in mutual funds.

The fees are higher than ETFs or individual stocks, but as you can see from our best mutual funds list, many of them have impressive historical performance. If you are seeking ease of access and safety, mutual funds are a good investment for your portfolio.

What is the Best Performing Mutual Fund in Canada?

In 2022, one of the best-performing mutual funds in Canada was the RBC Global Energy Fund Series F. This fund returned 48.18% for the year and was also the best energy mutual fund in Canada.

What are the Top 10 Mutual Fund Companies in Canada?

1. RBC Global Asset Management
2. TD Asset Management
3. CI Global Asset Management
4. Mackenzie Investments
5. Pimco Investment Management
6. BMO Global Asset Management
7. Fidelity Investments
8. ScotiaFunds
9. Manulife Investment Management
10. Invesco

ETFs vs. Mutual Funds

While both of these types of funds hold a basket of assets, there are some critical differences between the two.

Mutual funds have historically been actively managed, and ETFs have been mostly passively managed. This is the main reason why mutual funds tend to have higher MERs and management fees than ETFs. These days, there are plenty of passively managed mutual funds and actively managed ETFs.

ETFs are publicly traded on stock exchanges. This means they can be traded multiple times per day and even offer the ability to short-sell or trade options. Mutual funds are offered through banks or financial management firms and are managed by the fund managers.

Mutual funds are purchased in units and can be bought in fractional increments as well. ETFs trade in shares like stocks, although some brokerages, like Wealthsimple, will allow fractional ETF investing as well.

Methodology

With over 5,000 mutual funds in Canada alone, it can be a difficult task to choose the right one to invest in. If you want to invest in mutual funds, choosing the right strategy is important, whether it is conservative, high-growth, or dividend investing.

It also helps to try and choose a lower MER so that you are not charged as much in fees over the long term.

FAQs

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