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
| Fund Code | RBF646 |
| Inception Date | August 28, 2006 |
| Type of Fund | Large-Cap Canadian Stocks |
| Net Assets Invested | $3.03 billion |
| MER | 0.76% |
| 10-year Annualized Returns | 7.7% |
| 10-year Benchmark Returns | 8.4% |
| Risk Level | Medium |
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 4.3% 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 December 2023, RBF646 held 107 different stocks with a 35.5% sector allocation to Financials and a 17.2% 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
| Fund Code | GOC1043 |
| Inception Date | November 2011 |
| Type of Fund | Global Equities |
| Net Assets Invested | $1.16 billion |
| MER | 1.25% |
| 10-year Annualized Returns | 12.4% |
| Risk Level | Moderate |
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 14.1%.
This fund provides Canadian investors with global exposure. It has a 68.6% weighted allocation to US-listed stocks and 31% allocated to foreign stocks.
Its largest holdings are Microsoft (MSFT), Alphabet (GOOG), and Moody’s Corp (MCO)
Mackenzie Canadian Equity F Series
| Fund Code | MFC1453 |
| Inception Date | May 15, 2006 |
| Type of Fund | Equities |
| Net Assets Invested | $557 million |
| MER | 0.99% |
| 10-year Annualized Returns | 7.9% |
| Risk Level | Moderate |
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 33.2% sector allocation to Financial stocks, with Royal Bank (RY.TO) and Toronto Dominion (TD.TO) as its largest holdings.
RBC Global Technology Fund
| Fund Code | RBF620 |
| Inception Date | July 7, 2002 |
| Type of Fund | Global Technology Stocks |
| Net Assets Invested | 964.61 Million |
| MER | 0.99 |
| 10-year Annualized Returns | 18.6% |
| Risk Level | Medium |
The RBC Global Technology fund is an excellent long-term investment with a solid track record of returns dating back to 2002. The fund is weighted towards U.S. equities, with 89.6% of holdings consisting of U.S.-based technology companies
Investors will find familiar names at the top of the holdings list, with companies such as Alphabet, Microsoft, and NVIDIA accounting for over 30% of holdings.
Since its inception in 2002, the fund has returned an average of 11% annually. While year-to-year performance may see swings due to broader economic conditions, long-term investors should be confident about the long-term outlook of this fund.
NBI Global Equity Fund Series F
| Fund Code | NBC767 F |
| Inception Date | December 24, 2013 |
| Type of Fund | Global Equities |
| Net Assets Invested | $1.69 billion |
| MER | 1.04% |
| 5-year Annualized Returns | 13.75% |
| Risk Level | Medium |
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 13.75%, which far outperforms any of the major indices.
A total of 66.07% 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 21.78% weighting and a 21.38% allocation to technology stocks. Microsoft Corp (MSFT) is far and away the largest holding, with a 7.78% weighting in this fund.
Invesco Select Balanced Fund F Series
| Fund Code | AIM1577 |
| Inception Date | February 11, 2000 |
| Type of Fund | Balanced Portfolio |
| Net Assets Invested | $620.87 million |
| MER | 0.88% |
| 10-year Annualized Returns | 7.74% |
| Risk Level | Low to Medium |
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 20.56% allocation to corporate bonds and a 9.86% allocation to government bonds.
AIM1577 has a total of 238 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
| Fund Code | TDB306 |
| Inception Date | October 31, 2000 |
| Type of Fund | Canadian Bonds |
| Net Assets Invested | $5.263 billion |
| MER | 1.12% |
| 10-year Annualized Returns | 0.92% |
| Risk Level | Low |
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 91.6% 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
| Fund Code | MFC8625.CF |
| Inception Date | February 2003 |
| Type of Fund | US Small-Mid Cap Equities |
| Net Assets Invested | $2.95 billion |
| MER | 1.05% |
| 10-year Annualized Returns | 10.2% |
| Risk Level | Medium |
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 10.2%.
MFC8625.CF holds 32 different stocks with a 28.8% allocation to Information Technology, 25.3% allocation to Healthcare, and a 25% allocation to the Industrial 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.
TD Dividend Income Fund – H8
| Fund Code | TD Dividend Income Fund – H8 |
| Inception Date | Sept 2006 |
| Type of Fund | Canadian Dividend Equities |
| Net Assets Invested | $4.2 billion |
| MER | 2.00% |
| 10-year Annualized Returns | 5.59% |
| Risk Level | Low |
Despite having one of the highest MERs on the list, TD Dividend Income Fund – H8 is still a great option for those looking for consistent portfolio growth through dividends.
With top holdings consisting of dividend aristocrats like Royal Bank (7.5%) and Toronto-Dominion Bank (5.3%), investors in this fund can rest assured that dividend growth will be relatively safe.
The fund consists of 85% Canadian holdings, with a heavy weight towards the financial sector.
Pimco Monthly Income Fund F Series
| Fund Code | PMO205 |
| Inception Date | January 20, 2011 |
| Type of Fund | Fixed-Income |
| Net Assets Invested | $24.3 billion |
| MER | 1.42% |
| 10-year Annualized Returns | 3.12% |
| Risk Level | Low |
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 trading fees include CIBC Investor’s Edge and Qtrade.
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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?
- RBC Global Asset Management
- TD Asset Management
- CI Global Asset Management
- Mackenzie Investments
- Pimco Investment Management
- BMO Global Asset Management
- Fidelity Investments
- ScotiaFunds
- Manulife Investment Management
- 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
We mentioned two dividend mutual funds in our list of the best mutual funds in Canada. These are the RBC Canadian Dividend Fund A and the CI Canadian Dividend Fund Series F.
When looking at mutual funds for your RRSP, you will want to consider a lower-risk profile. This means choosing a balanced mutual fund like the Invesco Select Balanced Fund Series F, which provides a safe investment with both stocks and bonds.
It’s hard to go against RBC Global Asset Management, which owns the largest mutual fund in Canada by net assets in the RBC Canadian Dividend Fund A.
The RBC Global Energy Fund Series F was the best energy mutual fund and one of the best overall performing mutual funds in Canada in 2022.
The RBC Canadian Dividend Fund A is the largest mutual fund in Canada by net assets. The RBC Canadian Equity Income Fund Series F is also a popular choice among Canadian investors.
For TD Asset Management, the best mutual funds are the TD Dividend Growth Fund which has over $9 billion in net assets and the TD Retirement Conservative Portfolio, which has over $5 billion invested.
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