Canadians prefer mutual funds in RRSPs

By Staff | February 21, 2013 | Last updated on February 21, 2013
2 min read

Despite the wide range of investment options currently available to Canadians, mutual funds remain the core investment choice for Registered Retirement Savings Plans (RRSPs), shows a study by BMO Financial.

The poll finds that 72% of the participants with RRSPs hold mutual funds within their plan, and that mutual funds account for almost a third (31%) of all holdings held in RRSPs.

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“Mutual funds remain a popular investment option for the average Canadian investor because, among other benefits, they offer immediate diversification,” says Serge Pépin, vice president, investment strategy, BMO Asset Management Inc. “As Canadian Boomers begin to retire in greater numbers, it’s natural that many would be looking to generate income from their investments, including mutual funds.

Apart from mutual funds, the study notes that Canadians are building their RRSPs with a variety of other investments including Guaranteed Investment Certificates (21%), cash (20%), stocks (11%), bonds (9%) and Exchange Traded Funds (4%).

Read: 3 common misconceptions about RRSPs

According to the study, Canadians invest in mutual funds for several reasons, including:

  • They are professionally managed (30%)
  • They invest in a variety of companies/holdings (28%)
  • They have strong growth potential (26%)
  • There is a wide variety from which to choose (22%)

When asked about what type of mutual fund in which they would like to invest (whether inside or out of an RRSP), 81% reported they would favour income-generating funds.

The second choice for the type of mutual funds in which Canadians would like to invest are those that gradually become more conservative as the investor approaches his/her life goals (76%).

Read: Help clients secure their retirements staff


The staff of have been covering news for financial advisors since 1998.