Know the risks before you jump into a mortgage investment fund

investor clinic

I’m retired and I’ve structured my portfolio to focus on income rather than growth. I am interested in your opinion of Capital Direct I Income Trust.

Capital Direct I Income Trust is a pooled investment fund that aims to deliver steady income to unitholders by holding a portfolio of residential mortgages in British Columbia, Alberta, Ontario and Atlantic Canada. Unlike a mutual fund, however, the trust has redemption restrictions and other risks that investors need to understand before taking the plunge.

Thanks to the relatively buoyant housing market, the trust has performed reasonably well. According to the most recent fund fact sheet, the class A and class C units both returned about 8.8 per cent for the year ended June 30, with five-year annualized returns of about 7