Why should investors consider fees when investing in segregated funds?

Investors should consider fees when investing in segregated funds because higher fees can significantly reduce overall returns. Fees, including management fees, administration fees, and other costs associated with the segregated funds, directly impact the net returns that investors actually receive. Even a small percentage increase in fees can lead to substantial differences in the amount of money an investor ends up with over time, especially when taking into account the effects of compounding.

For example, if an investment generates a return of 6% annually but carries a fee of 2%, the net return would be reduced to 4%. Over the long term, this difference can lead to a significant impact on the final value of the investment, potentially costing the investor thousands of dollars in lost growth. Therefore, understanding and evaluating the fee structure is crucial for investors who want to maximize their investment returns in segregated funds.