Which Are the Best Mutual Funds in Canada for You in 2022?

Mutual funds are an extremely beneficial and useful investment tool. They are especially good for beginner investors because of their innate diversification. Even seasoned investors should try and diversify their portfolio by investing a little in mutual funds at least. If you are looking to invest in the best mutual funds in Canada, you have come to the right place. In this post, we will take a look at the best mutual funds in Canada to invest in. We will take a look at the best mutual funds across all categories. Aside from that, we will also look at some of the basic and important facts that you must know about mutual funds. Let’s get started,

Best Mutual Funds in Canada: All You Need to Know

What Is a Mutual Fund?

Mutual funds are often described as professionally managed investment schemes that collect money from various investors then invest it in diversified holdings. Mutual funds invest within a wide selection of securities like stocks, bonds, debt instruments and far more. Each scheme features a defined NAV (Net Asset Value) which springs after dividing the entire investment of the mutual fund by the number of investors. The value of the mutual company determines the performance of the assets bought.

Investors earn returns from mutual funds in three ways. They are:


Investors are paid a token as a reward for their investment in a mutual fund’s portfolio. Investors can get the money or reinvest that into more shares.

Capital Gains

This is achieved when mutual funds sell assets that have increased in price. Investors gain money from selling their mutual fund at a higher price than what they actually bought them for.

Sale Of Fund Shares

When a fund’s holdings see a price rise, but the fund manager doesn’t sell, the fund share’s price increases. Investors can then sell their mutual funds and book some nice profit.

When did Mutual funds start in Canada?

In 1932, the first Canadian fund, Canadian Investment Fund Ltd. (CIF), was created. By 1951, its assets had risen to $51 million. In 1996, Canadian Investment Fund Ltd. changed its name to Spectrum United Canadian Investment Fund. In 2002, it was changed once again to Canadian Investment Fund.

Investments were democratized in Canada so that average people could use it.

The 1990s experienced the largest influx into mutual funds in Canada when double-digit interest rates attracted Canadian savers into GIC fell, and investors moved into investments with the prospect of higher returns.

During the housing market collapse and the ensuing recession of 2008, Canada did much better than a lot of the world’s largest economies. Canada’s regulated banking system and stricter mortgage rules were two big reasons behind that. The Canadian mutual funds managed to sail through the turbulent waters of the recession and have continued being a great investment and saving option for Canadians.

What are the different types of mutual funds? 

Money Market

These investments have higher quality but are short-term. These mutual funds give the lowest returns.

Fixed Income Funds

These funds focus on having a regular cash flow into the fund through interest earned by the fund.

Equity Funds

These investments have a higher risk of losing money since they aim to grow faster than money market or fixed-income funds.

Balanced Funds

These investments focus on achieving higher returns and minimizing the risk of losing money.

Index Funds

Rather than using experts to track the value of mutual funds, these funds make use of software that matches the stocks in the market.

Best Mutual Funds In Canada

A mutual fund’s value is determined by the money inside a mutual fund, also known as asset under management (AUM). Before selecting the best mutual funds in Canada, you should always be mindful of your risk appetite. Just like other types of investments, high reward mutual funds also come with higher risk. Depending on your risk appetite and your investment preferences, you can choose from the following mutual funds.

Best mutual funds in Canada: Fixed income mutual funds

1. RBC Bond Fund O

  • Description= Canada Fixed Income
  • Net asset= $19 billion 
  • 1 year return= 8.21%
  • 3 years return= 4.71%
  • 5 years return= 4.41%

2. TD Canadian Bond Fund – O

  • Description= Canada Fixed Income
  • Net asset= $13 billion 
  • 1 year return= 7.15%
  • 3 years return= 4.45%
  • 5 years return= 3.90%

3. RBC Global Corporate Bond Fond O

  • Description= Global Fixed Income
  • Net asset= $11.5 billion 
  • 1 year return= 5.94%
  • 3 years return= 4.08%
  • 5 years return= 4.31%

Best mutual funds in Canada: Conservative risk level mutual funds

1. RBC Select Very Conservative Portfolio A

  • Risk level= conservative 
  • Net asset= $11 billion
  • 1 return= 4.03%
  • 3 years return= 2.67%
  • 5 years return= 2.91%
  • Management fee= 1.45%

2. RBC Select Conservative Portfolio A

  • Risk level= conservative 
  • Net asset= $24 billion
  • 1 return= 3.55%
  • 3 years return= 2.71%
  • 5 years return= 3.23%
  • Management fee= 1.59%

3. RBC Select Balanced Portfolio

  • Risk level= balanced 
  • Net asset= $27.5 billion
  • 1 return= 3.22%
  • 3 years return= 3.16%
  • 5 years return= 3.91%
  • Management fee= 1.67%

Best mutual funds in Canada: Large cap mutual funds

1. RBC European Equity Fund O

  • Description= Europe Equity Large Cap
  • Net assets= $7 billion 
  • 1 year return= 6.36%
  • 3 years return= 2.29%
  • 5 years return= 4.01%

2. RBC Canadian Dividend Fund A

  • Description= Canadian Equity Large Cap
  • Net assets= $7 billion 
  • 1 year return= -10.95%
  • 3 years return= -0.84% 
  • 5 years return= 1.88%

3. PH&N US Multi-Style All-Cap Equity Fd O

  • Description= US Equity Large Cap Blend
  • Net assets= $6.5 billion 
  • 1 year return= 10.48%
  • 3 years return= 9.07%
  • 5 years return= 10.3%

Best mutual funds in Canada: Mid to small cap mutual funds

1. EdgePoint Global Portfolio Series F

  • Description= Global Equity Mid/Small Cap
  • Net assets= $3 billion 
  • 1 year return= -10.78%
  • 3 years return= 1.03% 
  • 5 years return= 4.83%

2. EdgePoint Global Portfolio Series A

  • Description= Global Equity Mid/Small Cap
  • Net assets= $2.5 billion 
  • 1 year return= -11.79%
  • 3 years return= -0.11% 
  • 5 years return= 3.64%

3. Mawer Global Small Cap

  • Description= Global Equity Mid/Small Cap
  • Net assets= $2 billion 
  • 1 year return= 8.96%
  • 3 years return= 9.90% 
  • 5 years return= 11.07%

Best mutual funds in Canada: Emerging market mutual  funds

1. RBC Emerging Markets Equity Fund 

  • Description= Global Emerging Markets Equity 
  • Net assets= $4 billion 
  • 1 year return= -3.82%
  • 3 years return= 2.09% 
  • 5 years return= 5.08%

2. Fidelity Emerging Markets Portfolio Sr O

  • Description= Global Emerging Markets Equity
  • Net assets= $2 billion 
  • 1 year return= 5.54%
  • 3 years return= 6% 
  • 5 years return= 7.93%

3. BlueBay Emerging Markets Corp Bd O

  • Description= Emerging Market Fixed Income
  • Net assets= $1.5 billion 
  • 1 year return= 5.66%
  • 3 years return= 4.47% 
  • 5 years return= 6.76%

Best Mutual Funds in Canada: FAQs

Can you buy mutual funds directly?

Mutual funds can be purchased directly from a mutual fund company, a bank, or a brokerage firm. Before you can start investing, you’ll need to have an account with one of these institutions prior to placing an order. … If you are using an investment professional to assist you, you will likely need to pay a load.

Are Mutual Funds Safe?

Many indeed find investing in mutual funds worrisome. Some of the fears are understandable, while others – not so much. Quick-money schemes promising quick and high returns for investors have ended up wrecking many financially. This is one of the problems that has made mutual funds perceived as not a safe investment option.

No investment is entirely risk-free, but mutual funds are safe as far as investments are concerned. Mutual funds companies are under the supervision of regulatory agencies. No one can run away with your hard-earned cash. You can go to bed with no worries.

Mutual funds are taxed in such a way that it doesn’t affect an investor’s returns. So this means that the longer you stay invested, the more profit you earn.

What are the advantages of mutual funds?

Professional Management

Buying a mutual fund automatically leaves the burden of decision making on your professional manager. You don’t need to bother about how to invest your money. It is now left for you to decide if you can work with the funds’ manager or make decisions for yourself.


The value of mutual funds does not drop wildly during financial emergencies when you might want to sell out in a hurry.


Mutual funds create an opportunity for you to reduce the risk to your assets by a mix of stocks from different industries and investments of different types.

Easy to Understand

Compared to other financial products, mutual funds are easier and simpler to use and understand. It requires nothing much for you to be a successful investor.

Easy to Purchase

Mutual funds are readily accessible at brokerage firms, banks, insurance companies, and even online.

Do Mutual Funds invest only in stocks?

Some investors want high returns which only stocks can deliver. Such investors can invest in Equity Mutual Funds which are among the best long-term investment options available for achieving such objectives. But these Mutual Funds have the risk of higher volatility because of their exposure to stocks of various companies. There are other types of Mutual Funds that do not invest in equity but in bonds issued by banks, companies, government bodies and money market instruments which have a lower risk but also offer lower returns compared to equity funds.

How do Mutual Funds help manage risk?

In a Mutual Fund, a typical portfolio holds many securities, thus offering “diversification”. In fact, diversification is one of the biggest benefits of investing in a Mutual Fund. It ensures that the dip in the price of one or even a few securities does not affect portfolio performance alarmingly.

Can you lose money in mutual funds?

All funds carry some level of risk. With mutual funds, you may lose some or all of the money you invest because the securities held by a fund can go down in value. Dividends or interest payments may also change as market conditions change.

So those were some of the best mutual funds in Canada for you to invest in. If you are looking to start investing your money in mutual funds, you can choose from any of those based on your personal investor profile. As it is with most kinds of investments, mutual funds are subject to market risks. Do your research, gauge your risk appetite and most importantly, read the offer document carefully before investing.

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