BMO Financial Group

BMO Financial Group
BMO Investments Inc.

November 17, 2014 07:30 ET

BMO Investments Inc. Launches New Target Education Portfolios for Canadians' RESPs

- Portfolios managed based on child's year of birth and gradually become more conservative the closer the child gets to entering post-secondary education

- Designed for education savings and to be held in Canadians' RESPs

- Eighty-six per cent of Canadian parents want easy-to-understand investments that align with the date their child plans to attend a post-secondary institution

TORONTO, ONTARIO--(Marketwired - Nov. 17, 2014) - BMO Investments Inc. (BMOII) today introduced BMO Target Education Portfolios, a series of managed investment solutions specifically designed for education savings and Registered Education Savings Plans (RESPs).

The five new portfolios have investing time horizons ranging from Income (for people who are close to or already drawing down their savings) to dates from 2020 to 2035. They are managed based on the child's year of birth and expected date to attend post-secondary education.

Each portfolio - consisting of mutual funds and/or Exchange Traded Funds (ETFs) - gradually shifts its asset mix from an emphasis on equities to an emphasis on fixed income as it approaches its target end date, thereby preserving capital for when it is needed.

According to a study by BMO Global Asset Management, 86 per cent of parents in Canada want easy-to-understand investments that align with the date that their child plans to start post-secondary education.

"With these new solutions, we're taking some of the guesswork out of investing so that Canadian parents can rest assured that the investments they're earmarking for their child's post-secondary education are on the right track," said Robert Armstrong, Vice President and Head of Managed Solutions, BMO Global Asset Management. "These new portfolios are low in cost and combine our market-leading mutual funds and ETFs, making them an ideal addition to an RESP."

Education Around RESPs

The study also found that more than three quarters (79 per cent) of Canadian parents wish there was more information or education about the benefits of RESPs and saving for post-secondary education.

To help address this, Employment and Social Development Canada has introduced Education Savings Week (November 16-22, 2014), which aims to increase awareness around the importance of education savings, the benefits of RESPs and the availability of government incentives.

Mr. Armstrong reminds Canadians that RESPs offer a number of benefits, including:

Tax-deferred growth: Any gains earned in the RESP will not be taxed until you withdraw your funds in the form of educational assistance payments.

Canadian Education Savings Grant: The Government of Canada matches contributions to an RESP up to 20 per cent for the first $2,500 contributed, with a maximum of $500 per year and a lifetime maximum of $7,200.

Additional Grants: If you reside in Alberta, Saskatchewan, Quebec or British Columbia, or if you are a low income household, you could qualify for additional grants from the provincial or federal government.

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Survey results cited in this report are from a Pollara survey commissioned by BMO Global Asset Management using interviews with an online sample of 1,000 Canadian parents with children under the age of 18, conducted between August 5th and 8th, 2014. The margin of error for a probability sample of 1,000 is ± 3.1%, 19 times out of 20.

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

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp. and BMO's specialized investment management firms.

Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

®"BMO (M-bar roundel symbol)" is a registered trade-mark of Bank of Montreal, used under licence.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had more than $586 billion in total assets and approximately 47,000 employees at July 31, 2014.

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