High Yielding Trusts With Moderate Risk

Article Excerpt

We recommend few income trusts. That’s because most trusts involve substantial risk, such as focusing on a single commodity or geographic area. Here are four trusts we do see as buys. Despite Ottawa’s plan to start taxing trust distributions in 2011, they should continue to pay above-average yields for years to come. These four trusts should also appeal to BCE investors seeking new sources of income, assuming that the BCE privatization goes through as planned (see box this page). However, you should continue to limit income trusts to no more than, say, 15% of your total portfolio. BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $25 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.0 million; Market cap: $3.2 billion; SI Rating: Above average) is the main provider of telephone service in Atlantic Canada and rural areas of Ontario and Quebec. Bell Aliant transferred its wireless operations to BCE Inc. as part of the deal that created the trust in July, 2006. BCE owns…