Extract from the Telegraph:
"Researchers looked at almost 14,000 children over a period of more than six years and found that those who had been breast-fed performed far better in IQ tests.
At the age of six-and-a-half, children who had been exclusively breast-fed in infancy scored 5.9 points higher on average in tests of overall intelligence. Teachers also rated these children significantly higher academically than control children in reading and writing.
Previous studies suggested a link between breast-feeding and IQ but they were treated with scepticism because of claims that the findings said more about social factors generally than breast-feeding itself.
"Our study provides the strongest evidence to date that prolonged and exclusive breast-feeding makes kids smarter," says Prof Michael Kramer at McGill University in Canada.
He said the findings should help boost efforts "to promote, protect and support breast-feeding"."
I believe the main factor that makes breastfeeding advantageous for babies is that breast milk is low in sodium/salt. This also helps to prevent infant obesity. See Children and Obesity