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If you’re planning a move from Canada to another country, such as the United States, and you currently hold Canadian mutual funds in a non-registered (taxable) investment account, it’s time to hit pause and take a closer look. While mutual funds are often seen as safe, diversified and familiar investment choices, they can become problematic—and costly—when international borders come into play. Here’s what Canadian investors need to know about moving mutual funds to another country.

The hidden risks of moving mutual funds across borders

Mutual funds are built to function within the regulatory framework of their country of origin—which is perfectly fine until your country of residence changes. Once that happens, those same mutual funds can quickly turn into financial liabilities.

When you update your account address to reflect your new country, many financial institutions and online brokers will freeze the account or restrict it to “sell only” transactions. That means no rebalancing, no professional management and no ability to adjust to evolving market conditions…

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