When most Canadians think of RRSPs and TFSAs, they picture traditional investments like mutual funds, ETFs, and stocks. But as the investment landscape continues to evolve, many investors are discovering that alternative assets, like Mortgage Investment Corporations (MICs) and private real estate funds, can also be held within registered accounts—and may play a powerful role in building long-term wealth.
At Cooper Pacific, we believe these lesser-known options can be a key piece in a more resilient and diversified portfolio, especially when paired with the tax advantages of registered accounts.
Alternative investments are financial assets that fall outside the realm of traditional stocks and bonds. These include real estate, private equity, infrastructure, hedge funds, commodities, art, currencies, and, increasingly, MICs and private real estate pools. Unlike publicly traded assets, alternatives can be illiquid, may have longer investment horizons, and are typically designed to offer more stable or uncorrelated returns.
Alternative investments are becoming a sought-after tool in modern portfolio construction, especially for those seeking diversification, income stability, and long-term performance.
In many cases, yes. Canadians can hold eligible alternative assets within registered accounts like RRSPs, TFSAs, RESPs, and RRIFs, as long as those assets are classified as “qualified investments” under the Income Tax Act and held through an approved trustee.
MICs, for example, are widely accepted in registered accounts. These pooled mortgage funds offer exposure to Canadian real estate markets and provide regular interest income, making them an attractive option for long-term income-focused investors.
Private real estate funds, particularly those that are RRSP-eligible and structured through exempt market offerings, can also be held in registered accounts, provided investors meet eligibility requirements and work with a compliant dealer.
One of the strongest reasons to hold alternatives in a registered account is to shelter the income they produce. MICs, for example, typically distribute consistent interest income, which is fully taxable outside of a registered plan. By holding them in an RRSP or TFSA, you can either defer those taxes (RRSP) or avoid them entirely (TFSA), allowing your investments to compound more effectively over time.
Alternatives often have a low correlation to public markets, which means they may behave differently than stocks during periods of volatility. Including private real estate or a MIC in your RRSP or TFSA can help balance your overall portfolio and reduce some downside risk that could be impacting other conventional markets.
While many investors use registered accounts for long-term growth, others seek consistent income. Alternative investments like MICs offer the potential for monthly or quarterly distributions, which can be reinvested or used as part of a retirement income strategy.
Consider an investor who contributes $6,000 annually to a TFSA and allocates it to a MIC with an average annual return of 7%. Over 10 years, that account could grow to over $83,000—completely tax-free. Compared to taxable investing, that’s a significant savings advantage and an opportunity to build wealth more efficiently.
When structured properly, using registered accounts to hold alternatives is not just about tax sheltering—it’s about making your dollars work harder within an optimized investment plan.
While the benefits are compelling, investors should consider the following before allocating to alternatives:
The process of adding alternatives to a registered account is easier than many think. It starts with confirming that your account provider or trustee supports holding private investments. From there, working with an experienced investment manager ensures your strategy is aligned with your goals, risk tolerance, and time horizon.
Alternative investments are no longer just for institutions or ultra-high-net-worth investors—they’re increasingly available to everyday Canadians looking to strengthen their portfolios. When held inside a TFSA or RRSP, these investments can provide enhanced tax efficiency, consistent income, and true diversification.Want to explore how a MIC or private real estate fund could fit into your registered account?
Contact Jordan on the Cooper Pacific team today to learn how to maximize your investments by integrating alternative investments into a registered account.
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Since 1994, Cooper Pacific Mortgage Investment Corporation has been helping communities and investors across Western Canada grow and prosper. As real estate experts, our goal is to offer investors outstanding mortgage investment opportunities with an attractive rate of return. We do this by offering short-term construction financing and interim mortgage funding to help builders and developers take projects from planning to completion.
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