NEWS WATCH
Overall, trust units were priced up during 2006 so that relative cash yields fell from a median of more than 10% to approximately 9% per annum. The rise reflects growing insight into underlying asset values not previously given due consideration by those trading trusts just to chase cash yield. But it also confronts those who suggest trusts have merely been an opportunistic tax scam designed to take advantage of retired income-seeking investors during a period of low short-term interest rates.
Attention to trusts helped many learn that past assumptions are wrong.
iTrust Institute is studying the key features, perceived potential & benefits of income trusts starting from the premise that:
Equities managed and structured like income trusts to flow net gains through to owners by way of frequent and regular distributions of cash can offer superior rates of overall return, support market growth, enhance economic productivity and contribute to growth of the tax base with less risk than other equities given honest managers and a fully competitive market supported by open communications.
We will test this notion and explore related questions.