When it comes to investing, the choices can be overwhelming. Each option carries its own risks and rewards, and understanding these can be crucial in making informed decisions. While stocks have the most attention in the marketplace, recent years have shown that Canadian stocks have mixed results for returns. Likewise with mutual funds tied to Canadian equities, performance has been disappointing to many investors.
One investment vehicle that has consistently delivered impressive returns over the past five years is the Blue Pearl Mortgage Investment Corporation (MIC). Canadian Mortgage Investment Corporations pool capital from investors to fund residential and commercial mortgages, offering returns through interest payments. These returns are generally more consistent than the often unpredictable gains in equity markets.
Let’s compare the performance of Blue Pearl Mortgage Investment Corporation against some other popular investment options: the TSX Venture Composite Index, the TSX Composite Index, the CIBC Monthly Income Class A, and the Canada 10-year bond.
The TSX Venture Composite Index is composed of small-cap companies that often have higher growth potential but also higher risk. This index is known for its volatility, and the past five years have been particularly challenging. The annualized return for the TSX Venture Composite Index over this period has been around -0.15%. An investment of $25,000 in 2018 would be worth about $24,807 today. This performance underscores the speculative nature of small-cap investments and the importance of considering risk tolerance.
The TSX Composite Index represents the broader Canadian equity market and includes a diverse range of industries. While investing in the stock market can offer significant returns, it also comes with higher volatility. Over the past five years, the TSX Composite Index has had its share of ups and downs. With Canadian investors flooding into the US markets to take trade in the tech heavy NASDAQ, Canada’s mainboard exchange has seen lagging growth. Despite the overall annualized return over the past five years being around 10.03%, there have been years of poor growth such as in 2021. If you had invested $25,000 in the TSX Composite Index in 2018, your investment would have grown to approximately $40,309.
The CIBC Monthly Income Class A is a balanced fund that aims to provide regular income with a mix of fixed income and equity investments. Over the past five years, this fund has delivered an annualized return of about 6.06%. If you had invested $25,000 in the CIBC Monthly Income Class A in 2018, your investment would have grown to approximately $33,547. This balanced approach offers a moderate return with a diversified portfolio, appealing to investors seeking both income and growth.
Risk-wary investors have frequently kept their savings in government bonds as they are often seen as a safe haven for those seeking stability. The Canada 10-year bond has provided an annual yield of around 1.5% over the past five years. While this is a much safer investment, the returns are significantly lower. If you had invested $25,000 in the Canada 10-year bond in 2018, your investment would have grown to approximately $27,651. This modest return reflects the trade-off between risk and reward in the bond market. Investors should, however, be acquainted with the concept of opportunity risk.
If you had invested $25,000 in Blue Pearl Mortgage Investment Corporation in 2018, you would have benefited from an average annual yield of approximately 10.44%. This consistent return is a result of our strategic focus on residential mortgages in British Columbia, backed by our team’s deep expertise and rigorous underwriting standards. Over five years, your initial $25,000 investment would have grown to approximately $41,071 thanks to the power of monthly compounding.
Comparing these investment options, it’s clear that Blue Pearl Mortgage Investment Corporation has delivered the highest returns over the past five years. With a focus on residential mortgages, Blue Pearl offers a unique blend of stability and high returns. Our dedicated team of mortgage professionals ensures rigorous underwriting standards and loan-to-value ratios at approximately 40%, reducing risk and maximizing returns for our investors.
While the stock market and venture capital investments can offer the dream of high returns, recent history has shown that market volatility and risk could make that dream become a nightmare. Government bonds provide safety but at the cost of very low returns. Balanced funds like CIBC Monthly Income Class A offer moderate returns that may not match the risk that they entail.
In today’s unpredictable financial environment, investing in Blue Pearl Mortgage Investment Corporation provides a compelling opportunity for those seeking consistent, high returns with lower risk.
As with any investment decision, it’s important to consider your financial goals, risk tolerance, and investment horizon. For those prioritizing stability and consistent returns, Blue Pearl Mortgage Investment Corporation represents a robust alternative to the unpredictability of the stock market.
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Disclosure Statement
The material in this article has been prepared by Blue Pearl Mortgage Investment Corporation (the “Company”) and represents general background information about Blue Pearl Mortgage Investment Corporation’s activities at the date of this article. This information is given in the summary form and does not purport to be complete. Information in this article, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing, or selling securities or other financial products or instruments and does not consider your particular investment objectives, financial situation, or needs. Before acting on any information, you should consider the appropriateness of the information having regard to these matters, and any relevant offer document, and seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market disruption, financial or political developments, and, in international transactions, currency (FX) risk. This article may contain forward-looking statements, including statements regarding our intent, belief, or current expectations with respect to Blue Pearl Mortgage Investment Corporation’s business operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions, and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. Blue Pearl Mortgage Investment Corporation does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Blue Pearl Mortgage Investment Corporation’s control.
