What happens to the maturity date of a segregated fund when the guarantee is reset?

When a guarantee on a segregated fund is reset, it typically means that the maturity date is adjusted to reflect the new guarantee period. In this case, the correct answer indicates that the maturity date is reset to 10 years from the date of the reset. This is a common feature of segregated funds which offer a guarantee of the principal invested at maturity, providing assurance and stability to investors.

Resetting the guarantee effectively allows the investor to lock in a new level of protection based on the current value of the investment, with the maturity date being automatically adjusted to 10 years from the reset date. This helps investors maintain their investment strategy without having to wait for the original maturity period to elapse.

In contrast, other options may suggest varying outcomes that do not align with typical practices associated with guarantee resets in segregated funds. For instance, maintaining the same maturity date while resetting the guarantee would not provide the same level of protection based on current market conditions. Similarly, extending the maturity but retaining previous redemption options would complicate the fund's structure and investor expectations. Shortening the maturity based on fund performance does not accurately reflect how guarantees in segregated funds are generally structured, as they typically prioritize investor security.