Mortgage Investment Corporations are similar to Investment Funds, but are not publicly traded. While Investment Funds invest in equities, Mortgage Investment Corporations invest in mortgages. Mortgage investment’s advantage over equity investment is that mortgages are legally secured against the real estate of the borrower.
Mortgage Investment Corporations:
• distribute all net interest income to investors
• offer favourable tax treatment if held in a registered investment
• spread risk across a pool of mortgages instead of an individually held
• are professionally managed
Shares of a MIC are qualified investments under the Income Tax Act (Canada) for RRSP, TFSA, RRIF, RESP and LIRA investments.