BMO Study: Mutual Funds Are Backbone of Canadians' RRSPs

TORONTO, ONTARIO--(Marketwire - Feb. 21, 2013) - Despite the wide range of investment options currently available to Canadians, a study issued today by BMO Financial Group has found that mutual funds remain the core investment choice for Registered Retirement Savings Plans (RRSPs). According to the study, 72 per cent of Canadians with RRSPs report that they hold mutual funds within their RRSP, and that mutual funds account for almost a third (31 per cent) of all holdings held in RRSPs.

In addition to mutual funds, the study revealed that Canadians are building their RRSPs with a variety of other investments including 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).

"Mutual funds remain a popular investment option for the average Canadian investor because, among other benefits, they offer immediate diversification," said Serge Pépin, Vice President, Investment Strategy, BMO Asset Management Inc. "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."

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

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

What types of mutual funds do Canadians prefer?

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

"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," said Mr. Pépin. He noted that BMO Investments Inc. offers a number of income-generating options in its mutual fund lineup.

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 per cent). To address this need, BMO Investments Inc. offers BMO LifeStage Class Funds. These six funds shift their asset mix from an emphasis on equity funds to an emphasis on fixed income and cash equivalent funds as they approach different target end dates. The funds are intended to provide growth in the early stages and become progressively more conservative over time as they near their respective target end date.

For more information on BMO mutual funds, please visit www.bmo.com/mutualfunds.

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Regional Breakdown:

Percentage of Canadian RRSP holders that say their portfolio includes mutual funds

National	ATL	QC	ON	MB/SK	AB	BC
72	74	65	78	73	71	62

Percentage of Canadians who, when asked what type of mutual fund in which they'd like to invest given the current market environment and their life stage (whether inside or out of an RRSP, would want income-generating funds.

National	ATL	QC	ON	MB/SK	AB	BC
81	81	64	88	85	88	83

The Pollara online survey was completed between January 25 and January 30, 2013 with a sample of 1,000 Canadians. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.

BMO Mutual Funds, including the BMO LifeStage Class Funds, are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing and for details on how the BMO LifeStage Class Funds are structured to allow switches without triggering a disposition for income tax purposes. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.