In earlier school years, one child’s RESP can vary greatly from another’s. Parents with a higher risk tolerance may favour equity funds, while conservative investors will favour fixed-income funds.

But all that changes by the time students reach the end of secondary school. Now, typically, RESPs are very much alike, holding only – or almost only – fixed-income and cash-equivalent mutual funds. Investing in equity funds is risky at this stage. If there’s a significant market downturn, your equity investments may not recover before you need to withdraw the funds.

However, risk tolerance does play a minor role in the final phase, when the child is a post-secondary student. A conservative RESP-holder may only invest in money market or high-interest savings mutual funds. Someone with a higher risk tolerance might also invest in bond funds, often short-term bond or government bond funds, especially in the first year or two of the student’s post-secondary education.