Protected Fund

With a protected fund, you receive a guaranteed return. The downside: you have to tie up your money for some length of time. And you likely have lower returns than had you taken more risk. The investment comes with a term; you have to keep the money in the fund until the end of that term if you want to get the guaranteed amount. But you're protected against potential losses. The fund will make sure that you get a minimum amount back from your investment.

You put $100,000 into a protected fund with a 5% guaranteed return. You can't take the money out for two years. Over that time, the general market rises 12%. If you had just bought a total market index fund, you would have made $12,000. However, because you bought the protected fund, you earned $5,000. That's the price you pay for "protection." Somebody else is taking on risk you didn't want, so you get punished for it via weaker investment returns.