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If guaranteed investment funds are used for long-term investing, one year bumps in yield are more likely to average out over time. In such cases, why not just invest independently with low-risk financial products such as TIPS, CDs and lower expense AAA Bond index funds etc. without losing one percent to management expenses every year?
The 1 percent management fee added to inflation also has the potential to erode the preservation of capital principle. Moreover, over time one percent adds up to quite a lot. For example, year 1 on 100K requires year 2 to yield 2% to gain to recoup the 1% lost in year 1 and yield just 1%. That same 100K invested in TIPS could yield 2% yr-over-yr for $104.04K by the end of yr 2 Vs. $101K with the guaranteed fund.