Investment in the Fund provides investors access to the characteristics of mortgage investments:
About KV Mortgage Fund
KV Mortgage Investment Fund Inc. (the Fund) is a qualified Mortgage Investment Corporation (MIC) as defined under Section 130.1 of the Income Tax Act Canada. The Fund was established January 8, 2009 and has a fiscal year end of February 28th. Annual report
The Fund actively invests in syndicated mortgages that are secured by real estate, and in so doing builds a portfolio of mortgages that each investor proportionately owns.
Maintaining the status of the Fund as a MIC is a primary objective of management, and allows investors to enjoy the tax free pass through of earnings offered by the MIC structure. The corporation is able to pay $nil taxes in respect of each year by distributing 100% of income to investors via monthly dividends. Dividends received by individual investors are taxed as interest income.
The Fund recognizes its fiduciary duty to investors, and accordingly places emphasis on retaining professional management that possess, real estate, finance and accounting experience. To manage day to day activities, the Fund has entered into a formal management and advisory agreement with KV Capital (a related party by virtue of common ownership and management).
Investors can also elect to invest in the fund via registered plans (RRSP’s, RESP’s, TFSA’s etc). These investments can provide a vehicle in which the effects of tax deferral and compounding of interest may be realized.
In addition to diversifying an investors portfolio away from traditional products (stocks, bonds, etc.) the Fund provides a vehicle for investors to take advantage of the returns provided by mortgage investments spread out over a diversified portfolio. Each investor in the Fund owns a proportionate share of the Fund’s entire portfolio.
The structure of the Fund provides investors the ability to participate in the returns from mortgages with terms under two years, while removing the burden of “active management” that typically accompanies investments with terms under two years.
The Fund holds mortgages on real property as security against each loan in its portfolio.
The Fund operates under specific guidelines, in which it will at all times: