What does owning shares in a MIC allow investors to do?

Owning shares in a Mortgage Investment Corporation (MIC) allows investors to participate in a diversified mortgage pool. This means that by holding shares, investors can gain access to a variety of mortgage investments rather than being limited to direct investments in individual properties. This diversification helps spread risk across different mortgage investments, which can enhance stability and potentially lead to more consistent returns for the shareholders.

In a MIC, these pooled resources are managed collectively, and the income generated from the underlying mortgages is distributed to shareholders. This structure allows investors to benefit from professional management of the mortgage portfolio, while also providing them with greater liquidity compared to direct real estate investments.

Investing only in residential properties does not accurately describe the broad investment strategy typically employed by a MIC, as these corporations can also invest in commercial properties and different types of mortgages. Engaging in commercial banking is not a function of MICs, as they focus on mortgage investments rather than traditional banking services. While tax benefits can be a characteristic of certain MIC investments, the primary advantage centers around the ability to invest in a diversified pool of mortgages.