Labour-Sponsored Investment Funds (LSIFs) invest in small- and medium-sized businesses across various industries. There are about 50 different LSIFs for sale in Canada today. Each one backs a different mix of companies.
What type of LSIFs are there?
- Most LSIFs are equity-based, which means the LSIF buys part ownership of the company.
- Most LSIFs invest in newer industries. For example, they may invest in new technology or biotechnology companies. That?s one reason most people think of LSIFs as high-risk investments.
- A smaller number of LSIFs focus on economic sectors that have been around a long time, such as manufacturing, health care, and financial services.
Remember: There's no guarantee an LSIF will invest your money in a great company
Still, if your goal is to find the next big success story, an LSIF may increase your chances. That's because it lets you invest in a mix of new businesses instead of just one. Just make sure you do your homework and learn about the companies the LSIF backs before you invest. You may also want to discuss these investments with a professional adviser before you buy.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.