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Mortgage Investments
There are a wide array of mortgage based investments in Canada. Mortgage investments can include Canadian mortgage funds, mortgage investment corporations (MICs), and investments in private mortgages directly.
Mortgage based investments in the past were popular as some were perceived as being a relative low risk investment that provided stable returns in either a fixed or variable structure. Investments in single mortgages are considered by many as investment that have a greater element of risk. Investments in second mortgage mortgages or third mortgages are considered by many as high risk investments. It is clearly possible to lose the principal amount invested if one elects to invest in private mortgages.
Mortgage Funds in Canada
Mortgage funds in Canada are somewhat less popular today as a result of our low interest and mortgage rate environment. Canadian mortgage funds for instance will invest into insured mortgages. Mortgage funds also have management expense ratios (MERs). Therefore if mortgages in a mortgage fund are averaging a 4% interest rate, when ones subtracts the MER, what is the actual potential or expected return on the Canadian mortgage fund?
Mortgage Funds
Mortgage Funds in Canada are offered by wide variety of financial institutions and advisors. Mortgage funds are usually purchased with a front end commission whereby a set percentage is paid to the advisor and financial institution. Mortgage funds are also usually purchased with a deferred sales charge whereby an investor does not pay an upfront commission, however, will pay a redemption or sales charge if they redeem or sell their fund prior to a set holding period which normally is in the range of 6-8 years. Some financial institutions and advisors offer mortgage funds on a no-load basis, meaning typically there is no fee to buy or sell the mortgage fund. In this case, there may be a minimum holding period of 30-90 days in cases. Whether an individual purchases a mortgage fund on a front end, deferred sales charge or no-load basis, in all cases there is an associated cost to hold the fund. This cost is known as the MER or Management Expense Ratio.
Guaranteedinvestments.com and its advisors do not provide investors and clients with access to mutual fund investments nor do they provide advice on mutual fund investments.
MICs or Mortgage Investment Corporations
MICs are somewhat more sophisticated mortgage investments that are not issued my prospectus. MICs in Canada are considered more aggressive investments. MICs are usually purchased by highly sophisticated investors or the ultra high net worth investor who would have millions of dollars in investible assets.
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Guaranteedinvestments.com provide investors with access to a wide variety of safe and secure investments including guaranteed investment funds, annuities, insured annuities, GICs, guaranteed minimum withdrawal benefit plans, guaranteed lifetime withdrawal benefit plans and much more.
Mutual funds are not offered or promoted through Guaranteedinvestments.com
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