Lisa MacColl is a writer, investor and former compliance consultant in the group retirement and individual wealth management fields. Lisa has written about personal finance for 14 years and currently writes about investing and investment providers for Wealthsimple. Lisa's past work has been published in Canadian Money Saver, Advisor’s Edge, CBC, and CreditCards.ca. She was a nominee for the 2015 Oktoberfest Women of the Year, Professional Category. Lisa holds an M.A. and B.A. from the Wilfrid Laurier University.
Like any mutual fund, CIBC mutual funds are a pooled investment product, which means many investors buy small slices of the mutual fund. Here’s how they work.
How do CIBC mutual funds work?
CIBC mutual funds are bought and sold on the stock exchange, so the value can fluctuate. The fund manager, CIBC Asset Management Inc, uses the pooled money from the many investors to build a portfolio by buying underlying stocks, bonds, and other investable assets.
The earnings of mutual fund portfolios like CIBCs can include dividends, interest and capital gains. Some mutual funds are comprised of investments that track/replicate a stock index, and some mutual funds may include derivatives, futures, hedged funds, and other high risk investments. That’s why it’s important to read the prospectus and fund facts before you invest in a mutual fund.Grow your money with low fees and no account minimums. Invest as little as a dollar and we’ll build you a personalized investment portfolio to meet your financial goals.
Some mutual funds are “actively managed,” which means the portfolio manager buys and sells underlying stocks, bonds, and other investment products making adjustments often to achieve the goals of the fund. Others mutual are “passively managed,” which means the portfolio manager follows an index and seeks to replicate its returns.
Passive funds often have “index” in the name of the fund. The main difference between actively and passively managed funds lies in the investment philosophy. Actively managed funds buy and sell underlying stocks to meet investment goals, whereas a manager of a passively managed fund buys the underlying stocks in the same proportion as the index it is following. Whether actively or passively managed, there are fees, charges, and commissions associated with mutual funds that may reduce your investment returns and can vary, although index funds are typically less expensive. It’s wise to read the fund facts before you buy mutual funds. CIBC offers both active and passive funds.
Examples of popular CIBC mutual funds
All mutual funds, including the funds offered by CIBC, fall into a few general categories: Money Market, Bond/Income, Balanced, Equity, Global, and Other, which include sector-specific and emerging markets. They have different levels of risk, and different fees associated with them. In general, the higher the risk, the more potential for wide variations in the unit price and profit/loss. The mutual fund advisor will take the time to walk through some investment questions so that you can have a portfolio you are comfortable with.
The chart below includes an example of both actively and passively managed funds, and the different categories of mutual fund. The data was compiled on August 12, 2020 by consulting the CIBC fund pages. As mutual funds can fluctuate, the information may have changed. Please consult the fund pages for current information.
|Symbol||Mutual Fund Name||3 year return||5 year return||MER||Assets Under Management|
|CIB480||CIBC Money Market Fund||0.44%||0.32%||0.71%||$2.1 billion|
|CIB512||CIBC Monthly Income Fund||7.90%||-0.050||1.46%||$3.6 billion|
|CIB479||CIBC Canadian Equity Fund||8.90%||-7.80%||2.20%||$297 million|
|CIB491||CIBC Emerging Markets Fund||31.20%||1.90%||2.79%||$351 million|
|CIB496||CIBC Global Technology Fund||31.70%||30.40%||2.52%||$216 million|
AUM $2.1 billion | MER .71% | 3 YR Return .44% **| 5 YR Return .**32%
The CIBC Money Market Fund is a low-risk fund that invests in short-term government securities and is intended to provide liquidity and capital preservation. It requires a $500 minimum initial investment and subsequent investments of $25.
2. CIBC Monthly Income Fund (CIB512)
AUM $3.6 billion | MER 1.46% | 3 YR Return 7.9% | 5 YR Return -5.0%
THE CIBC Monthly Income Fund is a low-medium risk fund that invests in major Canadian companies such as Toronto-Dominion Bank, Enbridge, Royal Bank, and CN Railway. It is intended to provide capital preservation plus monthly distributions. It requires a $500 minimum initial investment and subsequent investments of $25.
3. CIBC Canadian Equity Fund (CIB479)
AUM $297 million**| MER 2.2% | 3 YR Return** 8.9% | 5 YR Return -7.8%
The CIBC Canadian Equity Fund invests primarily in Canadian top-tier equity securities such as Shopify, Toronto-Dominion Bank, Barrick Gold, CN Rail, CP Rail and Brookfield Asset Management Inc. It is considered medium-risk. It requires a $500 minimum initial investment and subsequent investments of $25.
4. CIBC Emerging Markets Fund (CIB491)
AUM $351 million | MER 2.79% | 3 YR Return 31.2% | 5 YR Return 1.9%
THE CIBC Emerging Markets Fund is rated high-risk, because emerging market funds tend to be more volatile. The fund invests in companies based in China, India, and other South Asia countries, as well as Brazil and Russia. It requires a $500 minimum initial investment and subsequent investments of $25.
AUM $216 million | MER 2.52% | 3 YR Return 31.7% | 5 YR Return 30.4%
The CIBC Global Technology Fund is considered mediu- to high-risk, and invests in some of the premiere global companies involved in “development, application, production, or distribution of scientific and technology-based products and services.” These companies include Apple, Microsoft, Amazon, Takeda Pharmaceutical Inc, and Tencent Holdings. It requires a $500 minimum initial investment and subsequent investments of $25.
Examples of CIBC mutual funds that pay dividends
CIBC also has dividend-paying mutual funds that are less risky than an equity or global fund, but may produce better returns than a money market or a bond fund. For some funds, investors can automatically reinvest the dividends to purchase more units. The data was compiled on August 12, 2020 by consulting the CIBC fund pages. Mutual funds can fluctuate, the information may have changed. Please consult the fund pages for current information.
1. CIBC Dividend Income Fund (CIB522)
AUM: $339 million**| MER:** 2.02%| 3 Yr Return 2.8% | 5 Yr Return -8.2%
The CIBC Dividend Income Fund invests in Canadian equity and securities. It is considered low- to medium-risk, and intended for investors looking for income and long-term growth potential. Like other CIBC mutual funds, it requires a $500 minimum initial investment and subsequent investments of $25.
2. CIBC Balanced Fund (CIB477)
AUM $313 million | MER 2.3%| 3 YR Return 6.6% | 5 YR Return -0.6%
The CIBC Balanced Fund invests in a combination of fixed income securities and Canadian equity to provide investors with income and potential for long-term growth. It is considered low-medium risk. It requires a $500 minimum initial investment and subsequent investments of $25.
3. CIBC Dividend Growth Fund (CIB486)
AUM:$585 million | MER 2.02% | 3 YR Return 6.8% |5 YR Return -10.5%
The CIBC Dividend Growth Fund is intended for investors who are seeking the more favourable tax treatment of dividend income, and medium- to long-term investment timelines. The fund invests primarily in financials, energy, industrial, and communication services. It requires a $500 minimum initial investment and subsequent investments of $25.
How to invest in CIBC mutual funds
Step 1: Find a mutual fund advisor
You must purchase mutual funds through a licensed mutual fund advisor. CIBC mutual funds are sold through a mutual fund advisor who is licensed in the province where you live. Not everyone in a bank branch is licensed to sell mutual funds, and you usually need to make an appointment. Licensed employees who work for the bank are normally allowed to sell only the bank’s suite of mutual funds. You can learn more about mutual fund licensing and check if an advisor is licensed in Canada through the Canadian Securities Administrators.
Step 2: Determine your investment profile and goals
The mutual fund advisor will go over your investment concerns, goals, and risk tolerance with you, and recommend funds that will suit your investment style best. They may recommend individual funds, or an investment portfolio that has been assembled to meet specific investment objectives. Remember, this is your money, and you can ask as many questions as you need to to understand what you are investing in.
Step 3: Begin investing
You can make a lump-sum contribution, or you can set up automatic monthly deposits from your bank account to your investment account. Many funds have a minimum amount required to begin investing, so always check the fund facts or ask the advisor. You can check your investment performance online, and you will receive statements quarterly, semi-annually, or annually.
CIBC gives you the option of opening a self-directed investment account that allows you to choose your own investments. You request the buys or sells you want to make, and they are processed through CIBC Asset Management Inc.
Any trading fees would be in addition to the fund fees and not all funds are eligible. Check the fund facts for eligibility.
CIBC also offers index funds that try to replicate equity or bond indices. Index funds are considered “passive” investments, and typically have a lower MER. CIBC also offers a full line of ETF funds and Portfolio Solutions.
Step 4: Keep your goals in mind
When you invest in mutual funds, the value on any given day can vary widely. depending on what the stock market has done. There can be large swings up and down, and it can sometimes seem like keeping your money in a coffee can in the backyard might be a better option, so it’s a good idea to keep your long term goals in mind. If you have concerns about what your funds are doing, check with your advisor.
If you want to change your fund direction, or take money out, ask your advisor. Normally you can redeem your units (withdraw your money) from a mutual fund at any time, although it can take 2-3 days to process unless you have a money market fund, which is like a cash account.
(The information on this page was compiled by Wealthsimple in August 2020. In order to uncover this information, we looked at CIBC’s website, press releases and third-party sites.)
A word of warning
Investors may lose some or all of their investment, and mutual fund accounts are not protected by the Canadian Deposit Insurance Corporation. Always read the fund facts and prospectus to understand what you are investing in, what level of risk is involved, and what fees and charges may be associated with the mutual fund. Please remember that all information provided here is general information and not intended to be advice. Past fund performance may not be indicative of future earnings.
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