Investment Funds in Canada (IFIC) Practice Exam 2025 – Your All-In-One Guide to Exam Success!

Pension funds are classified as institutional investors because they manage large pools of capital on behalf of individuals and organizations for the purpose of generating returns to provide for future retiree benefits. Institutional investors, such as pension funds, insurance companies, and endowments, typically invest in a diversified portfolio of assets, including stocks, bonds, real estate, and alternative investments. Their investments are characterized by significant resources and expertise, allowing them to navigate complex financial markets effectively.

Unlike retail investors, who are individuals investing for personal accounts, institutional investors operate on a larger scale with different investment strategies aimed at achieving long-term growth and stability. Specialty investors and venture capitalists pursue more niche or high-risk investment strategies compared to the broader, more stable investment approaches used by pension funds. This distinction emphasizes the role of pension funds within the financial ecosystem, focusing on long-term asset accumulation to secure retirement income for beneficiaries.