Mutual funds a popular RRSP choice
Registered Retirement Savings Plan (RRSP) season is upon us and there are a wide range of investment options available from which to choose.
So how do you plan on making these important investment decisions?
Well, one of the more popular investment choices seems to be mutual funds for RRSPs, according to a new report by BMO Bank of Montreal.
The study revealed that 72 per cent of Canadians say they hold mutual funds within their RRSP, and that mutual funds make up about one-third (31 per cent) of all holdings held in RRSPs.
Other ways people are building their RRSPs include Guaranteed Investment Certificates (GICs) (21 per cent); cash (20 per cent); stocks (11 per cent), bonds (nine per cent); and Exchange Traded Funds (ETFs) (four per cent).
Serge Pepin, Vice President, Investment Strategy, BMO Asset Management Inc., says mutual funds remain a popular investment option because they offer many benefits including immediate diversification.
"To ensure investors choose the funds that best suit their needs, an investment professional can not only help navigate the wide array of mutual fund options available, but also provide financial planning and risk tolerance assessment advice," explains Pepin.
The study also revealed that 81 per cent of those polled in the survey prefer income-generating funds whether inside or outside of an RRSP.
"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," he adds.
Yes, generating income is always a good thing.
By Donna Donaldson, MSN Money
Do you hold mutual funds within your RRSPs?