A mortgage investment corporation (MIC) is a type of investment vehicle that pools money from multiple investors to invest in mortgages and other mortgage-related securities. MICs typically raise capital by issuing shares, which are sold to investors, and use the proceeds to purchase mortgages or other mortgage-related securities, such as mortgage-backed securities.
MICs are typically managed by professional portfolio managers who make investment decisions on behalf of the corporation and its shareholders. They typically aim to generate income for shareholders through a combination of interest payments on mortgages and capital appreciation of the mortgages and other securities they own. They are considered a high-income investment and they are more risky as well.
MICs are regulated by securities regulatory authorities, and are required to register and file regular reports on their holdings and performance. It’s important to keep in mind that MICs are generally considered to be higher risk investments, as the value of the mortgages and mortgage-related securities held by the MIC will fluctuate with changes in interest rates and the creditworthiness of borrowers. Additionally, the regulatory and compliance requirements for MICs may be more stringent than for other types of investment vehicles, and they are also required to provide a degree of transparency and reporting to their shareholders.
What are the risks of mortgage investment corporations?
The risks of investing in mortgage investment corporations (MICs) include:
- Interest rate risk: The value of MICs can be affected by changes in interest rates, as the value of their mortgage portfolios may decrease if interest rates rise.
- Credit risk: MICs are exposed to the risk of default by the borrowers they lend to.
- Prepayment risk: If borrowers prepay their mortgages, the MIC may not receive the full amount of interest it was expecting, which can affect its income.
- Liquidity risk: MICs may have difficulty selling their mortgage assets quickly in a market downturn, which can affect their ability to meet their obligations.
- Regulatory risk: Changes in laws and regulations can affect the operations of MICs and the value of their mortgage portfolios.
- Managerial risk: The quality of the management team can have a significant impact on the performance of a MIC.
It’s important to keep in mind that investing in MICs may not be suitable for all investors, and it is always important to conduct thorough research and to consult with a financial advisor before making any investment decisions.
Integrated-Equities Inc. has been appointed distribution agent for this offering. The firm is an Exempt Market Dealer registered in BC, AB, SK and, ON. Cynthia Aasen is a Dealing Representative registered with the firm. This communication is for general information purposes only and is not intended to be a solicitation or advice regarding the suitability of this investment. Important information including the risks and features of this offering are set out in the Offering Memorandum, which should be reviewed in detail prior to investment. Any representations contained herein are those of the Western Wealth Capital & Greybrook. Integrated-Equities Inc. has not taken any steps to ensure the accuracy, completeness or reasonableness of historic or projected information contained herein. Actual results may deviate significantly from the projections set out herein.
