Registered Disability Savings Plans saw a surge in assets last year, according to new data from Investor Economics Inc.
The Toronto-based research firm reports that RDSP assets rose 66% during 2011, and were up 23% in the second half. Despite the heady growth, the overall value of assets in these vehicles finished the year at $559 million, which is tiny in the context of the overall retail investment business.
Nevertheless, Investor Economics reports that mutual funds are continuing to gain traction in this niche, and now account for 57% of RDSP assets, up from 50% in 2010. Conversely, the share held by savings accounts declined from 36% in 2010 to 29% at the end of 2011, it says.
At the end of 2011, there were 59,025 RDSP accounts, Investor Economics notes, which represents a net increase of just over 5,000 accounts in 2011. “With the introduction of the Specified Disability Savings Plan — a more flexible withdrawal option for those with a shortened life expectancy — participation rates are expected to rise, likely setting off an influx of new accounts in the short-term,” it says.
The firm notes that Bank of Montreal remains the biggest sponsor of RDSPs, followed by Royal Bank and Toronto-Dominion Bank.