Wants info on income trusts
Q – What exactly are income trusts (REIT’s?? what does that stand for anyway?) and where can I get an overview of information about them please? – M.K.
A – There are many types of income trusts, but the one thing they have in common is an objective to provide above-average cash flow to investors. How they achieve this differs depending on the mandate.
For example, some income trusts invest in a portfolio of shares which are used to produce income through dividends, covered call writing, etc. Mulvihill Capital Management is one of the Canadian leaders in creating these trusts; you can find out more by visiting their Web site at
Another type of income trust, often called a royalty income trust, holds real assets. These can include oil and gas wells, hydro-generating plants, shipping terminals, cold storage facilities, or just about any other type of business you can think of. The profits from the operation are distributed to the unitholders.
You mention REITs. These are real estate investment trusts. They hold a portfolio of properties, which may include shopping malls, office buildings, medical centr, etc. Again, the objective is to generate cash flow for investors, some of which may be received on a tax-deferred basis.
Our Internet Wealth Builder newsletter frequently discussed income trusts and carries specific recommendations. As well, my forthcoming book, Secrets of Successful Investing, has a complete chapter on this investment vehicles. It will be available in early 2002. – G.P.