A MIC is a company authorized by Canada’s Income Tax Act to provide investors with an opportunity to invest in a diversified pool of mortgage loans, which are secured by real property.

MICs generate income primarily through interest earned on mortgage loans. This income is then distributed to shareholders as dividends, which are typically issued monthly or quarterly.

Investments in MICs are secured against real estate. While this provides a level of security, like all investments, there is risk involved. The security level depends on the properties' quality and the loan-to-value ratio of the mortgages.

Dividends paid by MICs are treated as interest income for tax purposes in Canada, meaning they are fully taxable. However, if held in a registered account like an RRSP, TFSA, or RRIF, the dividends can grow tax-free or be tax-deferred.

Yes, MIC shares are eligible for inclusion in registered retirement accounts such as RRSPs, TFSAs, and RRIFs, which can provide tax-efficient growth and income.

MICs manage risk by adhering to strict lending criteria, such as maintaining conservative loan-to-value ratios, diversifying their mortgage portfolio across different geographic locations and property types, and conducting thorough due diligence on borrowers and properties. Additionally, MIC managers often use professional risk assessment and management strategies to protect investors.