15 Best Mutual Funds in Canada for April 2024

Are you looking to invest your money but don’t want to bother with picking stocks and doing market research?

A mutual fund may be a good approach for you.

By the end of April 2022, mutual fund assets in Canada had totalled just north of $2.0 trillion.

We will cover some of the best mutual funds in Canada below and go over some of their features. 

Pros and Cons of Mutual Funds

Mutual funds come with their pros and cons, especially when compared with ETFs:

If you are buying a mutual fund through a discount brokerage, make sure to always purchase the F series to avoid paying any unnecessary fees.

Key Factors to Consider When Choosing Mutual Funds

Selecting the right mutual fund can feel overwhelming, given the myriad of choices available. Beyond just returns, it’s essential to weigh in on several other factors:

• Performance History: Past performance provides insights into a fund’s potential stability. Analyze the fund’s returns over different market conditions, such as bullish or bearish periods, to understand its resilience.
• Management Expense Ratio (MER): MER is the cost of investing in the fund. If the cost is too high, it will eat into your returns over the long run.
• Investment Strategy: Does the fund focus primarily on aggressive growth or more conservative, steady returns? Does it emphasize domestic investments, or does it have a global reach? Aligning the fund’s strategy with your objectives is crucial.
• Fund Size: A fund’s assets under management (AUM) can influence its agility. Extremely large funds might find it challenging to pivot their strategy, while smaller funds might not have the same level of resources.
• Manager Tenure and Expertise: The fund manager’s experience and past track record can be a significant determinant of the fund’s future performance. Familiarize yourself with their investment philosophy and how they’ve handled market downturns.

---

Best Mutual Funds in Canada

The main criterion for selecting our top mutual funds is each fund’s five-year annualized return figure. Since mutual funds aim for outperformance and come with higher fees than ETFs, it becomes more important to judge funds based on longer-term performance than on MERs.

• Mackenzie Canadian Equity F Series (MFC4153)
• Scotia Canadian Equity F Series (BNS550)
• RBC Canadian Equity Income Fund F Series (RBF646)
• RBC Vision Global Equity Fund F Series (RBF653)
• NBI Global Equity Fund F Series (NBC767)
• Canoe Global Equity F Series (GOC1043)
• Beutel Goodman Core Plus Bond Fund F Series (BTG11)
• Fidelity Canadian Short-Term Bond Fund F Series (FID685)
• TD Canadian Corporate Bond Fund F Series (TDB3205)
• PIMCO Monthly Income Fund F Series (PMO205)
• NEI Global Total Return Bond Fund F Series (NWT595)
• Desjardins Global Tactical Bond Fund F Series (DJT03944)
• Lysander-Canso Balanced Fund F Series (LYZ800F)
• Manulife Fundamental Balanced Class F Series (MMF8644)
• Invesco Select Balanced Fund F Series (AIM1577)

Best Canadian Equity Mutual Funds

Our first category focuses on mutual funds on the Canadian shelf, which invest in Canadian stocks.

1. Mackenzie Canadian Equity F Series

Mackenzie is a non-bank asset manager in Canada that runs a great Canadian equity mutual fund.

The fund’s long-term performance has been exceptional, especially when compared to other Canadian equity peers. It comes with a long performance track record and is a large fund by assets under management.

The mutual fund focuses on large Canadian stocks and combines both value and growth stocks. It is considered to be a medium-risk fund.

2. Scotia Canadian Equity F Series

Scotiabank’s Canadian equity mutual fund is a great choice to consider for adding Canadian exposure to your portfolio. 

The fund’s long-term performance has been great, and it comes with an extremely long performance track record. In terms of size, it is a large fund by assets under management.

The mutual fund focuses on large Canadian stocks across both value and growth styles. It is considered to be a medium-risk fund.

3. RBC Canadian Equity Income Fund F Series

RBC’s Canadian equity income fund is a good option to consider if you want to invest in Canadian stocks and also own a fund that is focused on paying out income to investors.

The fund’s long-term performance is excellent. RBF646 has a very long performance track record and is massive in terms of assets under management.

The mutual fund focuses on large Canadian stocks within the value style of investing. It is considered to be a medium-risk fund.

[Back to Top]

Best Global Equity Mutual Funds

The global equity category is next, which contains funds that invest in both North America as well as internationally.

4. RBC Vision Global Equity Fund F Series

RBC’s Vision global equity fund is a top choice for global stock exposure within your portfolio.

The fund’s long-term performance has been stellar over multiple time frames and it comes with a long performance track record. In terms of size, it is a large fund by assets under management.

The mutual fund focuses on large global stocks across the growth style. It is considered to be a medium-risk fund.

5. NBI Global Equity Fund F Series

National Bank’s global equity fund is another excellent choice as a global stock mutual fund to consider adding to your portfolio.

The fund’s performance has been great and it comes with a medium-length performance track record. In terms of size, it is a massive fund by assets under management.

This mutual fund also focuses on large global stocks across the growth style. It is labelled as medium risk, which is fairly standard for global equity funds.

6. Canoe Global Equity F Series

Although a relatively smaller Canadian investment manager, Canoe offers an excellent global equity mutual fund to Canadians. 

The fund’s performance has been excellent across several time frames, and it comes with a medium-length performance track record. In terms of size, it is a very large fund by assets under management.

This mutual fund’s mandate invests in large global stocks across the growth style. Canoe labels the mutual fund as being medium risk. Canoe’s fund does come at a relatively higher MER than its peers. 

[Back to Top]

Best Canadian Fixed-Income Funds

The Canadian fixed-income category refers to mutual funds that invest exclusively in Canadian bonds. 

7. Beutel Goodman Core Plus Bond Fund F Series

Beutel Goodman, a well-known name in Canada, offers a great fixed-income strategy through their core plus bond fund.

The fund’s performance has been great over a longer period of time and the mandate comes with a long-term performance track record. In terms of size, it is a fairly large fund by assets under management.

This mutual fund’s mandate invests in Canadian bonds with a focus on performance. The strategy exposes investors to interest rate shifts and invests in average-quality bonds.

Beutel Goodman labels their core plus bond fund as being low risk. 

8. Fidelity Canadian Short-Term Bond Fund F Series

Fidelity is a massive investment manager globally and offers a great fixed-income mutual fund here in Canada.

FID685’s long-term performance has been excellent and the fund has a very long performance track record. In terms of size, it is a very large Canadian mutual fund by assets under management.

This mutual fund’s mandate invests in Canadian short-term bonds. The strategy aims to reduce as much interest rate exposure as possible for investors and invests in average-quality bonds.

The Fidelity Canadian short-term bond fund is a low-risk fund.

9. TD Canadian Corporate Bond Fund F Series

TD has a great Canadian corporate bond fund on its product shelf. The fund focuses on bonds issued by Canadian companies.

The TD Canadian corporate bond fund comes with good performance and a medium-length performance track record. In terms of size, it is a massive Canadian mutual fund by assets under management.

The strategy is somewhat sensitive to changes in interest rates and invests in average-quality bonds.

The fund is categorized as low risk.

[Back to Top]

Best Global Fixed-Income Funds

This category focuses on bonds from all across the world, including North America.

10. PIMCO Monthly Income Fund F Series

PIMCO’s monthly income fund is one of the most well-known bond funds in Canada. It is a staple in most investment advisors’ models on the fixed-income side.

 PIMCO monthly income comes with excellent performance and a long performance track record. In terms of size, it is one of the largest Canadian mutual funds by assets under management.

The strategy is somewhat sensitive to changes in interest rates and invests in average-quality bonds.

The fund is categorized as low risk. Note that this fund also comes in an ETF form (ticker is PMIF.TO) which currently trades at around $17.97.

11. NEI Global Total Return Bond Fund F Series

NEI is a Canadian investment manager focusing mainly on responsible investment strategies. Although their global total return bond fund is not an ESG fund, it remains a great option as a global fixed-income mutual fund.

NWT595 has great performance over different time frames and a long track record. In terms of size, it is a large mutual fund by assets under management in the global bond category within Canada.

The strategy is very sensitive to changes in interest rates and invests in high-quality bonds.

The fund is categorized as low risk.

12. Desjardins Global Tactical Bond Fund F Series

Desjardins is a very popular investment manager in the province of Quebec. Their global tactical bond fund is an excellent option to consider for global fixed-income exposure in your portfolio.

The fund has great performance over time and a long track record. In terms of size, it is a large mutual fund by assets under management in the global bond category within Canada.

The strategy is modestly impacted by changes in interest rates and invests in average-quality bonds.

The fund is categorized as low-to-medium risk.

[Back to Top]

Best Balanced Mutual Funds

The balanced fund category includes funds which are close to an equal allocation between both stocks and bonds.

13. Lysander-Canso Balanced Fund F Series

Lysander-Canso is another non-bank asset manager in Canada with some quality investment funds. Their balanced fund is an excellent choice to consider when looking at the balanced category within a global setting.

The fund’s performance over multiple time periods has been phenomenal and it comes with a long performance track record. It is a small mutual fund by assets but not small enough to put it at risk of closing down in the future.

LYZ800F invests in stocks that are medium-size and that are trading at cheap valuations. For bonds, they target medium-quality issues that have a low sensitivity to interest rate changes.

The fund is categorized as medium risk.

14. Manulife Fundamental Balanced Class F Series

Manulife is a firm that most people recognize for insurance. With that said, they do have some excellent investment mandates that they offer here in Canada.

MMF8644 is a great balanced fund that invests in stocks and bonds within Canada.

The fund has a long performance track record with excellent results. In terms of size, it is a fairly large mutual fund by assets under management.

Manulife fundamental balanced class invests in large, growth-oriented stocks. For bonds, they target medium-quality issues with a high sensitivity to interest rate changes.

The fund is categorized as low-to-medium risk.

15. Invesco Select Balanced Fund F Series

Invesco is another well-known name in the Canadian investment space. Their select balanced fund is a great option to consider for balanced Canadian exposure. The fund invests exclusively in Canadian stocks and bonds.

The fund also has great performance over time and a very long track record. In terms of size, it is a large mutual fund by assets. 

AIM1577 invests in both large growth and large value stocks. For bonds, they target medium-quality issues with a high sensitivity to interest rate changes.

The fund is categorized as low-to-medium risk.

[Back to Top]

Are Mutual Funds a Good Investment?

Mutual funds have recently been painted in a negative light due to their higher fees when compared to ETFs. It is important to understand the key differences between these two pooled investment vehicles.

A large share of ETFs takes a passive investment approach. This generally means that the passive ETF will track an index of securities based on certain rules (such as how big a stock is etc.). Once the rules behind the index are in place, an ETF can track an index with little involvement from a portfolio manager. 

A mutual fund, on the other hand, is actively managed most of the time. This means that a portfolio management team is actively trading to try and outperform a specific benchmark. In theory, the team should be able to add value during either bull markets or bear markets.

For a lot of mutual funds, the value of active management will not be worth the additional fees. This is because it is very difficult to outperform broad market indices.

After fees are taken into account, mutual funds vastly underperform over a 10-year period ending June 30, 2021:

• 96% of Canadian Focused Equity mutual funds underperformed the benchmark index
• 96% of U.S Equity mutual funds underperformed the benchmark index
• 95% of Global Equity mutual funds underperformed the index

With terrible stats like these, it’s no wonder more Canadians are choosing mutual funds over ETFs.

Are Mutual Funds Worth the Fees?

Mutual funds are worth their fees if they are able to outperform their benchmark consistently by more than the excess fees that they cost.

In a large portion of cases, mutual funds are not worth the additional fees that they charge investors. This is because most portfolio managers are not able to outperform the broader market (represented by a market index).

If a portfolio management team stays with a specific strategy over a longer period of time, it can become easier to assess whether a mutual fund is worth its fees. When looking at performance, a good indicator is the 10-year annualized performance figure.

As an example, a mutual fund that focuses on US large-cap stocks that substantially outperforms the S&P 500 over 10 years will likely be worth its additional fees.

Which is the Best Performing Mutual Fund in Canada?

Assessing a mutual fund’s performance over a long period of time is critical. The Canadian mutual fund with the highest 10-year annualized return is currently Fidelity’s Technology Innovators Fund (Series F).

Reasons to Not Buy a Mutual Fund

More and more Canadians are ditching mutual funds and choosing ETFs instead, mainly due to high costs and fees. Here’s a video where I explain all the reasons why I don’t invest in mutual funds in Canada:

Which Bank is Good for Mutual Funds in Canada?

There is no particular bank (among the major ones) that has any advantage when it comes to mutual funds. All of the major banks in Canada keep a fairly full mutual fund shelf that covers all asset classes.

Conclusion

The Canadian mutual fund shelf is packed with options to choose from. Investors are likely to find funds that match their investment objectives.

Whether a mutual fund is worth investing in or not depends on its long-term ability to outperform its benchmark by at least its additional cost in fees.

Before choosing a mutual fund to invest in, make sure that you have properly assessed your goals, objectives, and constraints.