Segregated funds did exactly what they’re supposed to do in 2025 — protect on the downside and deliver solid returns. Investors still headed for the exits, however.
Strong sales did not translate into asset retention, as the category recorded another year of net outflows in 2025. Investors are using seg funds primarily in specific circumstances — for decumulation and creditor protection.
By year-end, seg fund investors had enjoyed strong double-digit returns. Gold also surged, climbing to $4,339.65 per ounce.
“Gold and Canadian equity exposure became much bigger drivers of segregated fund performance dispersion,” said Kimberly Hart, director of manager research at Morningstar. “In a market where gold surged and the benchmark had meaningful gold exposure, funds and providers that were underweight gold were at a noticeable disadvantage.”
CDSPI, a not-for-profit organization that provides dentists with financial advice, insurance and investments, topped last year’s performance list, with 90.2% of its assets under management ranking in the first and second quartiles, according to Morningstar Direct. That’s up from 89% in 2024.
RBC was close behind, with 85.9% of assets ranking in that same range. BMO ranked third, with 72.4% of assets in the first or second quartile.
In terms of assets under management, iA Financial Group ranked first with $39.9 billion. Manulife followed with $32.9 billion and Canada Life with $19 billion.
Here’s what some of the largest segregated fund providers had to say:
CDSPI
Steven Moscone, vice-president, advisory services, said 2025 “highlighted the value of diversification, with non-U.S. equities, emerging market bonds, gold and the TSX leading.”
“As we enter 2026, geopolitical uncertainty reinforces our focus on risk management and consistency.”
Last year “marked our third consecutive year of top-quartile performance,” Moscone added.
iA Financial Group
“With the major intergenerational transfer, where more than $1.4 trillion will be exchanged from one generation to another, segregated funds play a central role,” said Pierre Vincent, principal vice-president, individual insurance, savings and retirement. “Especially in estate planning, an area where their potential remains underutilized in Canada.”
iA Financial Group generated more than $3 billion in net segregated fund inflows during the year, on gross sales of about $7 billion.
CI Global Asset Management
CI Global Asset Management’s performance was driven by its managed solutions (funds of funds) and standalone balanced mandates, according to Marc-André Lewis, president and chief investment officer.
“In Canada, materials and gold were major contributors to market strength, pushing the TSX to new highs. Compared with peers, our more sector-neutral Canadian equity approach … proved advantageous in a year when many active managers remained structurally underweight gold. This positioning gap across most Canadian equity peers contributed to the weakest median Canadian equity fund active return in nearly two decades.”
There was significant debate during the year about AI equity valuations and whether they were beginning to resemble dot-com stocks in the late 1990s. Lewis sees it differently.
“Today’s AI-exposed companies are supported by real revenues, customers and cash flow,” he said. “This allows us to position client portfolios toward long-term secular themes … without compromising risk discipline or overcommitting to a theme.”
RBC Insurance
“One of the themes impacting markets in 2025 was AI. There was accelerated capital raising to spend on infrastructure with the goal of building and training AI models,” said Farzana Damji, senior director, product development.
“Some sectors expected to see increased profitability as a result of AI adoption are banking, insurance, health care and legal and tax.”
Empire Life Investments Inc.
Paul Holba, president and chief investment officer, said 2025 “saw a broadening of the market, with resource and financial sectors strengthening. High-quality global and U.S. equities also produced top-tier performance versus other asset classes.”
He added: “Our strategy continues to focus on high-quality companies and investment opportunities … as well as identifying and adding external investment managers to our segregated fund platform. Within our own funds, our decision to increase exposure to Japan proved to be a major performance driver in 2025 and remains a high-conviction theme as the region enters a new inflationary era in 2026.”
Sun Life
“Over the past year, segregated funds have continued to attract strong inflows, supported by capital market performance in 2025,” said Bryan Vanderleeuw, assistant vice-president, insured wealth product development and initiatives.
“Looking ahead to 2026 and beyond, Canada’s aging population is placing greater emphasis on protecting savings and making wealth transfer simpler, faster and more private. As those needs become more immediate, we expect demand for segregated funds to remain strong.”
