Six favourite funds for your RRSP

These funds offer tax advantages along with strong performance.

Christopher Davis 17 February, 2017 | 6:00PM

Editor's note: This week on Morningstar.ca, we present our Focus on RRSPs, where we go over what every investor needs to know about Canada's most popular savings program. Along with an explanation of RRSP basics, we will look at important issues such as whether it makes sense to defer savings, the life-cycle approach to retirement contributions, and ways to go beyond the traditional RRSP. Finally, our manager research analysts will present their favourite funds to hold in a retirement account. Check back all week for more insights from Morningstar's experts.


While the management expense ratio is the most heralded cost of fund investing, it’s not the only one. Indeed, the Canada Revenue Agency (CRA) may exact just as heavy a toll on your nest egg as the fees you pay to fund companies.

That’s because Canadian law requires mutual funds to pass along all of their profits (or capital gains) and income earned from their investments to unitholders every year. Investors in taxable accounts will have to pay taxes on these payouts, even if they haven’t sold their holdings or reinvested the proceeds in the fund. Perversely, newer fundholders may owe tax on gains that only longer-term investors enjoyed.

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Christopher Davis

Christopher Davis  Christopher Davis is Director of Manager Research at Morningstar Canada.

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