The difference is that this fund is offered by insurance companies and the assets can be invested in an equity, bond and/or index fund while guaranteeing a minimum value at maturity or when the investor dies. The insurance company running the fund charges quite a bit for this guarantee: up to 1% of your investment annually.
The advantage to placing funds in a guaranteed investment fund is that you are certain to recoup your investment. Furthermore, if your fund has a particularly good year you can opt to reset the guarantee at the higher value. The problem is that it can be very difficult to figure out how such a fund performed in comparison to normal mutual funds since the structures are so different.
Deciding between the two funds is matter of personal need and the advice of a good financial expert. If your goal is to provide additional security for your family or heirs then a GIF may be a good option, especially if it is run by a well known, reputable insurance company. The fund should also sport a good record of success.
The Guaranteed Investment Fund should not be mistaken with the Guaranteed Investment Contract. The latter is an insurance contract that guarantees the owner both the repayment of principal and a specific interest rate for a preset period. This is a fund that is usually offered to institutions rather than individuals.