AWM Diversified Mortgage Investment Corporation
Yield Stability and Growth Amid Shifting Rates and Economic Headwinds
Published: Oct 23, 2025
Author: FRC Analysts
*AWM Diversified Mortgage Investment Corporation has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Sector: Mortgage | Industry: Mortgage
Ticker Symbols:
Report Highlights
- In FY2025 (ended March 2025), net income (before investor distributions) rose 15% YoY to $13.45M, nearly matching our estimate of $13.48M. The yield (compounded) increased from 9.02% in FY2024, to 9.34% in FY2025 vs our forecast of 9.39%.
- AWM maintains its spot as one of the larger Mortgage Investment Corporations (MICs) in Canada, focused on first/second mortgages on single family residential units.
- Mortgage receivables fell 12% YoY to $213M in FY2025, but rose 13% YTD to $242M in H1-FY2026. As of September 2025, 48% of mortgages were in ON, and 38% in AB. First mortgages accounted for 73% of the portfolio.
- Since June 2024, the Bank of Canada has cut rates eight times (totaling 250 bps), bringing the policy rate to 2.50%. We believe one more cut is possible over the next six months amid slowing GDP growth, elevated trade tensions, and high unemployment. While delinquencies remain a concern, easing monetary policy should help mitigate risks.
- We find high-yielding funds, like AWM, increasingly attractive in the current declining rate environment. This is because MIC lending rates are less elastic, meaning their yields tend to decline less in a falling rate environment, and rise more slowly in a rising rate environment.
- At the end of FY2025, the MIC had $33M (15% of the portfolio vs the sector average of 6%) in impaired mortgages, up from $20M (8% of the portfolio) at the end of FY2024. While sector impairments also increased YoY, the rise was more moderate at 25%, versus the MIC’s 65% increase.
- While impaired mortgages increased, we believe the fund remains well-positioned with a conservative LTV of 67%. Supporting this view, AWM raised loan loss provisions by just 12 bps to 0.81% in FY2025, in line with peers, reflecting management’s confidence in limited future losses.
- Outlook: We project a yield of 8.36% in FY2026 vs. 9.34% in FY2025.
* AWM Diversified MIC has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Fundamental Research Corp. Equity Rating Scale:
- Rating – Excellent Return to Risk Ratio
- Rating – Very Good Return to Risk Ratio
- Rating – Good Return to Risk Ratio
- Rating – Average Return to Risk Ratio
- Rating – Weak Return to Risk Ratio
- Rating – Very Weak Return to Risk Ratio
- Rating – Poor Return to Risk Ratio
Fundamental Research Corp. Risk Rating Scale:
- (Low Risk)
- (Below Average Risk)
- (Average Risk)
- (Speculative)
- (Highly Speculative)
FRC Distribution of Ratings
| Rating | Percentage | Risk | Percentage |
|---|---|---|---|
| Rating – 1 | 0% | Risk – 1 | 0% |
| Rating – 2 | 33% | Risk – 2 | 10% |
| Rating – 3 | 45% | Risk – 3 | 41% |
| Rating – 4 | 4% | Risk – 4 | 32% |
| Rating – 5 | 8% | Risk – 5 | 8% |
| Rating – 6 | 1% | Suspended | 10% |
| Rating – 7 | 0% | ||
| Suspended | 9% |
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