investment trusts

Real Estate Investment Trusts (REITs) have moved up lately, but are still down from last year’s highs. That’s mainly due to fears that slowing consumer spending will hurt cash flows. However, top-quality REITs continue to have high occupancy rates and rising lease rates. As well, lower interest rates will help REITs fund their expansion plans.

We still advise against overindulging in Real Estate Investment Trusts. But if you stick with the highest quality, like the Real Estate Investment Trusts we recommend on this page, you should make attractive long-term returns with relatively low risk.

RIOCAN REAL ESTATE INVESTMENT TRUST $21.51 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT (Real Estate Investment Trust). RioCan has ownership interests in a portfolio of 227 retail properties across Canada, including 15 under development. These properties contain over 59 million square feet of leasable area. Portfolio occupancy stands at 97.0%.

RioCan’s revenue in the three months ended June 30, 2008 was $169.9 million, up 7.1% from $158.3 million a year earlier. Cash flow per unit rose 5.3%, to $0.40 from $0.38. RioCan’s annual distribution of $1.35 gives the units a yield of 6.2%.

RioCan is still a buy.

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GUARDIAN MONTHLY HIGH INCOME II FUND $15 (CWA Rating: Income) (GGOF Guardian Group of Funds, Commerce Court West, Suite 4100, P.O. Box 201, Toronto, Ontario M5L 1E8. 1-800-668-5613; Web site: www.ggof.com. Available from brokers) continues to emphasize more stable real estate investment trusts (REITs), and high-quality, long-lived resource trusts. We still think you should diversify carefully with trusts. Emphasize those with stable cash flows, a low need for capital expenditures and mature business operations. The $887.4 million fund’s top holdings are: Canadian Oil Sands Trust, RioCan REIT, Canadian REIT, ARC Energy, Cominar REIT, Yellow Pages Income Fund, BFI Canada Income Fund, Vermilion Energy Trust, Bonavista Energy Trust, Enerplus Resources Fund and Crescent Point Energy Trust....

Real Estate Investment Trusts (REITs) are among the most stable of the royalty and investment trusts. That’s because they own non-depleting assets, and can lock in lease rates and financing costs for long terms. The best REITs have good management, well-located properties and balance sheets strong enough to weather an economic downturn. They have high-quality tenants, and carefully match their debt with their leases. They also have room to build or expand on existing properties. We don’t think you should overindulge in REITs. But if you stick with the highest-quality issues, like RioCan, you’ll likely make steady returns with low risk....

ISHARES CDN REIT SECTOR INDEX FUND $13.65 (Toronto symbol XRE; buy or sell through a broker) holds the 12 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT in the value of the S&P/TSX Capped REIT Index is limited to 25%. RioCan REIT makes up 25% of the index’s value; H&R REIT, 15.1%; Canadian REIT, 9.4%; Boardwalk REIT, 8.9%; Calloway REIT, 8.1%; Canadian Apartment Properties REIT, 6.0%; Primaris Retail REIT, 6.0%; Chartwell Seniors Housing REIT, 5.0%; Innvest REIT, 4.2%; Cominar REIT, 4.3%; Extendicare REIT, 4.1%; and Dundee REIT, 2.7%. We’re glad to see that the top holding is RioCan, one of our favorite REITs. In fact, three of the top six holdings are among our recommendations. Note that iShares CDN REIT holds a couple of REITs we don’t recommend....

Real Estate Investment Trusts (REITs) are down from last year’s highs, largely due to fears that slowing consumer spending will hurt cash flows. However, top-quality REITs continue to have high occupancy rates and rising lease rates. As well, lower interest rates will help REITs fund their expansion plans. We still advise against overindulging in REITs. But if you stick with the highest quality, like the REITs we recommend on this page, you should make attractive long-term returns with relatively low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $21.43 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 214 retail properties across Canada, including 14 under development. These properties contain over 55 million square feet of leasable area. Portfolio occupancy stands at 97.6%....

Many Real Estate Investment Trusts (REITs) moved down in January on investor concerns that problems in credit markets would hinder expansion plans, and that a slower economy might hurt cash flows. However, interest rates have dropped, and occupancy levels and leasing rates remain high at REITs in Canada. We still advise against overindulging in REITs. But if you stick with the highest quality, like RioCan REIT, you should make attractive long-term returns with low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $20.80 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 207 retail properties across Canada, including 10 under development. These properties contain over 53 million square feet of leasable area....

GUARDIAN MONTHLY HIGH INCOME II FUND $14.34 (CWA Rating: Income) (GGOF Guardian Group of Funds, Commerce Court West, Suite 4100, P.O. Box 201, Toronto, Ontario M5L 1E8. 1-800-668- 5613; Web site: www.ggof.com. Available from brokers) continues to emphasize more stable real estate investment trusts (REITs), and highquality, long-lived resource trusts. We still think investors should diversify carefully with trusts, and emphasize those with stable cash flows, a low need for capital expenditures and mature business operations. The $927.9 million fund’s top holdings are: Canadian Oil Sands Trust, RioCan REIT, Canadian REIT, ARC Energy, Cominar REIT, Yellow Pages Income Fund, Vermilion Energy Trust, Bonavista Energy Trust, Enerplus Resources Fund, Crescent Point Energy Trust and BFI Canada Income Fund....

SWISS HELVETIA FUND $16.50 (New York symbol SWZ; CWA Rating: Conservative) invests mainly in large-capitalization Swiss stocks. The manager of the fund is Hottinger Group, which, as Banque Hottinger, dates back to 1786. The Swiss economy has picked up lately, despite slower growth in the U.S., one of Switzerland’s largest markets. Switzerland will likely show growth of 2.5% in 2007, just under its 2.6% growth in 2006. Still, a longer-term recovery in the U.S. will help the export-oriented Swiss economy even further. The fund’s top holdings are Nestle SA (food & beverages), 10.7%; Roche Holdings (pharmaceuticals) at 9.7%; UBS AG (banking), 6.9%; Novartis AG (health care and pharmaceuticals), 6.3%; Galenica Holding (Swiss pharma), 5.6%; Actelion NV (Swiss biopharma), 5.4%; Basilea Pharaceutica (biopharma), 5.2%; Credit Suisse Group (financial services), 4.4%; OC Oerlikon Corp. (Industrial technology), 3.8%; and Syngenta AG (agribusiness), 3.0%....

ISHARES CDN REIT SECTOR INDEX FUND $16.05 (Toronto symbol XRE; buy or sell through a broker) holds the 12 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT in the value of the S&P/TSX Capped REIT Index is limited to 25%. RioCan REIT makes up 25% of the index’s value; H&R REIT, 15.5%; Boardwalk REIT, 9.6%; Canadian REIT, 8.8%; Calloway REIT, 8.1%; Chartwell Seniors Housing REIT, 5.8%; Canadian Apartment Properties REIT, 5.6%; Primaris Retail REIT, 5.5%; Extendicare REIT, 4.4%; Innvest REIT, 4.2%; Cominar REIT, 3.7%; and Dundee REIT, 2.6%. We’re glad to see that the top holding is RioCan, one of our favorite REITs. In fact, three of the top four holdings are among our recommendations. Note that iShares CDN REIT holds a couple of REITs we don’t recommend....

Real Estate Investment Trusts (REITs) have moved up lately, largely due to diminishing concerns about Canadian interest rate hikes. We still advise against overindulging in REITs. But if you stick with the highest quality, like the REITs we recommend on this page, you should make attractive long-term returns with low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $25.40 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 207 retail properties across Canada, including 10 under development. These properties contain over 53 million square feet of leasable area....