As with all mutual funds, CIBC Mutual funds comprise a collection of investment products put together, with investors taking a portion of the mutual fund relative to their investment.
Despite being the smallest of the Big Five in terms of market share, assets, and capitalization, CIBC still punches above its weight with its mutual fund offerings, including exchange-traded funds and other investable assets.
The CIBC bank is the result of a merger between the Imperial Bank of Canada and the Canadian Bank of Commerce, founded in 1875 and 1867.
How Do CIBC Mutual Funds Work?
CIBC trades their mutual funds on the stock exchange; thus, the value is liable to fluctuate.
The fund advisor, CIBC, takes the pooled funds gathered from investors and uses that money to build a portfolio of investable assets that comprise stocks, shares, bonds, and other securities. Some of the earnings from CIBC’s mutual fund portfolio include capital gains, dividends, and interest.
Mutual funds may be designed to replicate a stock market index, while some may consist of investments such as futures, hedge funds, derivatives, and other high-risk, high-reward investments. Ergo, it’s necessary to understand the contents of the prospectus before placing your money in a mutual fund.
Moreover, mutual funds can also be actively managed, meaning the portfolio manager actively trades the investable assets, buying and selling them to meet the portfolio’s aims. Passively managed funds aren’t entirely as hands-on, with the portfolio manager tracking a stock market index to achieve similar returns.
Investors can recognize passive funds due to the “index” tag attached to their name. The significant difference between both types of funds rests solely on the fund manager’s approach. Nonetheless, both types of mutual funds still require investors to pay fees and commissions, invariably shortening the investment returns.
CIBC has more than a hundred mutual funds but below are some of the most popular:
Popular CIBC Mutual Funds
CIBC Mutual funds, as with all mutual funds, are categorized into the following: Balanced, Equity, Global, Bond/Income, Money Market, and Others like emerging markets and sector-specific funds. These funds all have different risk levels and different charges attached to them.
The higher the risk, the more returns the investor will get on his investment and vice versa. The mutual fund manager has to answer any question the investor might have before recommending a mutual fund portfolio. Below are some of the well-known CIBC mutual funds you can invest in:
CIBC Money Market Fund
The CIBC Money Market Fund focuses on short-term government securities that aim to preserve capital and provide liquidity. It has an initial entry-level investment of C$500 and further investments of C$25. It is known amongst investors as a low-risk fund.
- AUM: C$2.1 billion
- MER: 0.71%
- Three-year return: 0.44%
- Five-year return: 0.32%
CIBC Monthly Income Fund
Firstly, this fund is a low-medium risk fund that invests in top Canadian companies like the Royal Bank, Toronto-Dominion Bank, CN Railway, and Enbridge. The CIBC Monthly Income Fund focuses on capital preservation, including monthly distributions. The initial investment sum is C$500, and subsequent investments cost C$25 each.
- AUM: C$3.6 billion
- MER: 1.46%
- Three-year return: 7.9%
- Five-year return: -0.5%
CIBC Canada Equity Fund
The CIBC Canada Equity Fund is a medium-risk fund that primarily invests in top-tier Canadian equity securities, including Barrick Gold, Shopify, CN Rail, Brookfield Asset Management Inc, and Toronto-Dominion Bank. Investors are obliged to pay a minimum of C$500 initial investment and a further C$25 for additional investments.
- AUM: C$297 million
- MER: 2.2%
- Three-year return: 8.9%
- Five-year return: -7.8%
CIBC Emerging Markets Fund
The CIBC Emerging Markets Fund is a volatile fund that invests in far-flung companies in countries like Russia and Brazil, and other South Asia countries, including India and China. It is a high-risk fund that requires an entry-level investment of C$500 and an additional C$25 for subsequent investments. The fund is particularly suited for investors with an appetite for taking significant risks.
- AUM: C$351 million
- MER: 2.79%
- Three-year return: 31.2%
- Five-year return: 1.9%
CIBC Global Technology Fund
This fund is a medium to high-risk fund. It focuses on investments in top global companies that focus on the development, production, application, and distribution of science and technology-based services and products. Some of the companies in its portfolio include Tencent Holdings, Takeda Pharmaceuticals Inc, Amazon, Apple, and Microsoft. The CIBC Global Technology Fund has an entry-level investment of C$500 and further investments of C$25.
- AUM: C$216 million
- MER: 2.52%
- Three-year return 31.7%
- Five-year return: 30.4%
CIBC Funds that pay Dividends
Apart from the CIBC Mutual funds mentioned above, there are other types of funds that are known as dividend-paying funds. These funds carry less risk than a global or equity fund but may provide better ROI than a bond or money market fund. Investors who choose may reinvest their dividends to buy more units.
CIBC Dividend Income Fund
This mutual fund primarily invests in Canadian securities and equities and is tailored for investors seeking a portfolio with potential long-term growth. The CIBC Dividend Income Fund has an initial entry-level investment of C$500 and a further C$25 in additional investments. The CIBC Dividend Income Fund is considered low to medium-risk.
- AUM: C$339 million
- MER: 2.02%
- Three-year return: 2.8%
- Five-year return: -8.2%
CIBC Balanced Fund
As a low medium-risk fund, the CIBC Balanced fund collects fixed income securities and Canadian equity to help investors with income and feasibility for long-term growth. The entry-level price is C$500 and an extra C$25 for subsequent investments.
- AUM: C$313 million
- MER: 2.3%
- Three-year return: 6.6%
- Five-year return: -0.6%
CIBC Dividend Growth Fund
The CIBC Dividend Growth Fund is designed for investors who need tax-favourable treatment of dividend income, including investments with medium to long-term growth potential. The mutual fund invests in energy, financial, industrial, and communication companies. The initial entry-level to partake is C$500 and an extra C$25 for subsequent investments.
- AUM: C$585 million
- MER: 2.02%
- Three-year return: 6.8%
- Five-year return: -10.5%
How to Invest in CIBC Mutual Funds
1. Consult a Mutual fund Advisor
You must buy CIBC Mutual funds through an authorized mutual fund manager. You can purchase CIBC mutual funds through a fund advisor authorized to sell CIBC Mutual funds in your location.
Not every banker is charged to sell CIBC Mutual funds, and CIBC employees who are authorized to do so may only trade in the bank’s broad selection of mutual funds. You can verify if your fund manager can buy and sell mutual funds in Canada by checking through the Canadian Securities Administrators.
2. Map out your Investment Goals
The mutual fund manager will take your questions, discuss your investment concerns, including the amount of risk you’re willing to take before recommending a mutual fund that’s ideal for you. These funds may be an investment portfolio or a single fund tailored to meet specific investment goals. Ask as many questions as possible before investing your money.
3. Invest Your Money
Investing begins by making a single enormous contribution or setting up automatic payments to your investment account through your bank account. Most mutual funds have an entry-level amount required to buy a slice of the fund, and you must scrutinize the fund facts with your mutual fund manager.
CIBC has an online dashboard that allows investors to track their mutual funds’ performance, and the bank also provides performance statements you can receive yearly, semi-annually, or quarterly.
Investors also have the option of signing up for a self-directed investment account that allows you to create your investment portfolio. You dictate your buys and sells, and the request is processed by CIBC Asset Management Inc. Note that only a select set of funds are eligible for this offer.
4. Stay Focused
Although CIBC has some of Canada’s best mutual funds, these funds are still vulnerable to fluctuations. These stock market swings may affect your funds’ loss and profitability, so it is better to have a long-term investment goal in mind.
If you are not confident in your funds, consult your mutual fund manager. Remember, you can change your fund direction or pull out your money in its entirety. Whatever be the case, it takes 48-72 hours for your money to be credited into your account, except you own a money market fund, which works like a cash account.
Note of Caution
It is possible to lose a portion of your total investment, and the CDIC does not guarantee your investment. Ensure you have a thorough understanding of the prospectus and the level of risk involved before putting in your money.
What is a good rate of return for a mutual fund?
A reasonable return rate for a bond mutual fund is 4%-5%, while for stock mutual funds, the rate is 8%-10%.
Which bank is best for mutual funds in Canada?
The best bank in Canada for investing in mutual funds depends on your investment objectives, risk tolerance, and lifestyle goals. That said, the Canada Big Five has the most diverse suite of funds to meet your needs.
Can you lose all your money in a mutual fund?
Although unlikely, it is possible to lose all your money in a mutual fund, which is why you need to understand the fund prospectus before investing your money.
The information provided in this article does not constitute financial advice, and past fund performance is not an indicator of present or future returns on investment. The information on this page is subject to change, and it is in your best interest to check out the current CIBC fund pages for the latest news.