Place coconut in a dry skillet on medium high heat. Once you smell the coconut, start stirring frequently until coconut is brown. Transfer toasted coconut to a sheet pan to let it cool completely.
Set aside 1/3 cup of the cooled toasted coconut for garnish and store in the refrigerator until ready to use.
Add the remainder of toasted coconut to a medium sized bowl along with sweetened condensed milk and vanilla extract. Stir well.
Add heavy whipping cream to a mixing bowl and mix with an electric mixer until stiff peaks form.
Add a blob (large spoonful) of whipped cream to the milk mixture and stir well. This softens the mixture and makes it easier to fold into the whipped cream.
Fold milk mixture into whipped cream.
Pour into a standard size loaf pan. Place plastic wrap directly on the surface of the ice cream mixture to prevent crystal formation. Freeze at least six hours or overnight.
Garnish with reserved toasted coconut before serving.