FCP c. FNB: What you need to know to choose the placement that suits you

The choice of investment between the two depends on your financial objectives. Consequently, your risk tolerance and your investment horizon, according to Tony Salgado, president and founder of AMS Wealth.

“The real question is: what is the objective of your financial planning?”, He said.

FNBs are generally less expensive and easier to negotiate for many investors, adds Salgado. Moreover, Robots advisers with automatic investment functions have become popular with young investors, which has contributed to the development of FNB.

The common funds, on the other hand, are portfolios managed by professionals and tend to include higher costs.

In recent years, investments in the FNB have flocked, while FCP has slowed down.

Data from the Institute of Investment Funds in Canada indicate that net common funding sales totaled $ 15.2 billion in 2024, the first year fcp c. fnb: what you of positive net sales since 2021. For example, FNB net sales have reached $ 75 billion in 2024. Similarly, the highest total ever recorded and higher than that of the previous two years combined.

A diverse investment strategy

However, the two have value, according to Matthew Ardrey, financial planner at Tridelta Private Wealth.

“It is a question of finding the ideal solution for the customer and what he is looking for,” he adds.

If an investor has a portfolio of $ 100,000, Mr. For example, Ardrey explains that FNB will probably be more effective, offering extensive diversification and reduced costs. Similarly, As heritage increases. investors can start to diversify their investment strategy and invest in common management funds or other financial products.

“This does not mean that the FNB disappears. but this is where it is possible to use products that are managed more actively,” concludes Mr. Ardrey. Some FNBs fcp c. fnb: what you are also actively managed and can nevertheless prove to be profitable.

“Often. I call on a combination of fund managers and FNB to try to offer the customer an increased yield and good diversification,” he said.

However, adds Salgado, an FNB can potentially harm an investor if market volatility frightens it.

“It is not because it is inexpensive that it will gain value,” he says.

For example. a young investor has many years ahead of him to invest and does not need this short -term money; He could turn to an FNB of action, explains Mr. Salgado. On the other hand. an older investor who wishes to protect each dollar gained while benefiting from a more complete financial planning could opt for a common investment fund or adopt a more cautious approach, he adds.

According to Mr. Ardrey. whatever the path chosen by investors, they must first take the time fcp c. fnb: what you to understand precisely in which they invest and the costs of each product. It cannot be simply because they heard that it was a good idea.

“One of the main differences between an FNB. a common investment fund lies in their method of negotiation,” he recalls.

The FNB are constantly negotiating throughout the day. as an action, while a common investment fund is negotiated at a fixed price at the end of the day. If the markets are very volatile, two identical strategies could be negotiated at very different prices, he says.

“Investors should take the time to carefully examine what they buy,” concludes Mr. Ardrey.