About Royal Bank of Canada Mutual Funds
The Royal Bank of Canada offers nearly 50 mutual funds in a variety of industries and investment vehicles. These funds let investors support and profit from the Canadian economy with moderate risk and without the need for large capital outlay. RBC Asset Management handles the funds according to an investment process defined by the bank. Because information about these mutual funds is available online, investors can keep track of their money without the need for an intermediary.
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Types
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There are three main types of Royal Bank of Canada mutual funds. These are money market funds, income funds (primarily bonds), and equity funds (primarily stocks). Within each of these categories are individual funds that focus on specific industries, geographic regions, or types of investments. Also available are funds that aim to invest only in socially and environmentally responsible companies, such as the RBC Jantzi Funds.
Function
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Each type of fund is designed to meet a specific financial goal. A Money Market Fund is a low-risk, short-term way to gain a small amount while protecting the initial capital. For those who want better returns and can tolerate more risk, Income Funds are available. Equity funds, on the other hand, are used by those looking for long-term capital growth and, in the case of the Canadian and North American Equity Funds, a way to support Canadian companies.
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Benefits
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Royal Bank of Canada mutual funds offer the benefits typical of mutual funds, such as better access to markets, lower risk and liquidity. Unlike some smaller fund management companies, RBC Funds has a large pool of staff and resources and can provide investors with expert guidance and fund management. Their "team approach" gives investors access to a variety of skills and asset management styles, which minimizes the risk of poor decisions on the part of just one fund manager. For those already banking with RBC, another benefit is that their current financial advisers will be knowledgeable about these funds.
Considerations
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All RBC mutual funds require a minimum investment of between $500 to $2,500, which means they're not the lowest minimum investment mutual funds in Canada. RBC mutual funds are managed by experienced professionals, but as with any investment, there is still risk of loss. Remember, too, that capital gained from RBC mutual funds can be taxed by Revenue Canada.
Geography
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The Royal Bank of Canada offers mutual funds specific to Canada, the U.S., North American, Europe and Asia, as well as global funds. To invest in an RBC mutual fund, in most cases you must be a citizen or legal resident of Canada or the U.S. For U.S. residents, the RBC has headquarters in Raleigh, North Carolina and branches are available throughout the South Eastern U.S. The RBC also has offices in 47 countries where staff can answer questions about mutual fund investment options for those outside North America.
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