What’s the outlook for income trusts?

Zoomer | January 1st, 2006

Q – I have a question regarding income trusts.  I understand they are equities and susceptible to market meltdowns but was surprised at how much they fell recently, even though the markets skyrocketed.  Presently, I have Saxon High Income, Dynamic Focus Plus Income, and Guardian Classic High Income and am very satisfied with the monthly income they provide but, of course, concerned that they have had their day and the coming rise in interest rates will reduce their unit prices in a significant manner.


Any opinion you have in this regard would be most appreciated. – S.K.


A – Income trusts and the funds that invest in them will of course be volatile, but probably not to the extent we saw back in the late ’90s because there is more diversification available. It’s the old investing rule  – if you want the higher returns, you have to live with the higher risk. If not, switch to bonds. – G.P.