Canadian Income Funds

Acknowledgements. Introduction. Chapter One: What are Income Trusts Anyway? Today's Income Trust Landscape. The Basics: What is a Trust? The History of Trusts. The Players in a Trust: Which one is the Investor? Reasons for Setting up a Trust. Tax Mitigation. A Possible Downfall: Liability. The Basic Structure of an Income Trust. Setting up a Trust Structure. Other Structures. The Economic Climate: Fuel for the Recent Boom. Chapter Two: The Different Types of Income Trusts. How Does an Income Trust Differ from a Regular Public Company? The Types of Income Trusts. Business Trusts. Trademark Royalty Trusts. Oil and Gas Royalty Trusts. Real Estate Investment Trusts (REITs). Funds of Income Funds. Risks. Chapter Three: Tax Matters. Introduction. Debt and Equity. Financial Leverage. Internal Leverage. The Tax Benefits of Leverage to the Investor. Return of Capital and Other Tax Nuances. Is There an Effect on Overall Government Tax Revenues? IDSs, IPSs, and Other Products. Chapter Four: How to Choose an Income Trust. First and Foremost: Due Diligence. The Stages of Your Investment Life. Graduation. Getting Married. Kid(s) Arrive(s). Kid(s) Leave(s) Home. Retirement. Some Economic Conditions to Consider. Today's Interest Rate Climate. Equity Market Outlook. Exchange Rate Considerations. Commodity Price Outlook for Oil and Gas. Understanding the Underlying Business. Stability of Distributions. Growth Possibilities. Management Experience and Reputation. Liquidity. Funds of Funds - Management and Fees. When to Sell. Need Some Cash? Found a Better Investment Vehicle? Is the Fund Performing Badly? Setting Your Own Risk Controls. Stop Loss. The Rolling Stop. Discipline, Discipline, Discipline. Case in Point: Specialty Foods Group. Chapter Five: Measuring Risks: The Underlying Business. The Nature of the Particular Industry. Vulnerability to General Economic Conditions. Interest Rate Fluctuations. Competition. Labour and Employee Relations. Regulatory or Environmental Risks. Foreign Exchange Risk. Litigation Risks. The Quality of Corporate Governance. The Extent of Insurance Coverage. Seasonality and Weather. Supplier-Related Risks. The Nature of Customers and Customer Relationships. Commodity Price Risks. The Impact of Technology. Other Risks. Chapter Six: Measuring Risks: The Trust Structure. Structural Complexity. Possible Unlimited Liability to Unit Holders. Dependence on the Underlying Business. Cash Distributions Are Not Guaranteed, and Fluctuate with Performance. Restrictions on the Potential Growth of the Underlying Business. Nature of the Trust Units. Distributions in Kind on Redeeming Units, or on Termination of the Income Fund. Absence of a Prior Public Market. Issue of Additional Trust Units Diluting Existing Unit Holders' Interest. Investment Eligibility and Foreign Property. Income Tax Matters. Restrictions on Non-Resident Unit Holders. Leverage. Conclusion. Chapter Seven: Measuring Risks: Management, Sponsors, and Other Issues. Management Arrangements. Internal Management and LTIPs. External Management and "Internalization" Costs. Management Equity Ownership. Overall Management Arrangement Assessment. Sponsor-Related Risks. The Nature of Retained Interests. Non-Competition Agreements. Governance Issues - Voting and Veto Rights. Representations and Warranties. Overall Assessment of Sponsor Relationship. The Spectre of Unlimited Liability of Unit Holders. Chapter Eight: Measuring Risks: Stability Ratings. Some Things to Consider about Stability Ratings. Standard and Poor's (S&P). Dominion Bond Rating Service (DBRS). A Final Note on Risk. Chapter Nine: IPOs and Conversions: The Recipes for Making Income Trusts. The IPO Process. The Preliminary Prospectus. Stock Exchange Listing and Liquidity. Withdrawal Rights. Investors' Rights on a Misrepresentation. IPO Closing Mechanics. Post-IPO Obligations of Income Trusts. Available Information. The Income Trust Conversion Process. Management Proxy Circular. Arrangement Proceedings. Stock Exchange Listing. Investors' Rights on a Misrepresentation. Post-Conversion Obligations of Income Trusts. Pricing on Conversion. Closing Mechanics. Available Information. Chapter Ten: The Legal State of Affairs in Canada: Preventative Medicine for Liability. Ontario's Bill 198. Making the Facts Clear: The Disclosure Policy. Disclosure Compliance System. Insider Trading Policies. Corporate Governance Matters. Rules of the Canadian Securities Regulatory Authorities. Corporate Governance Disclosure: The Proposed Policy and Rule. Objectives. Chapter Eleven: Selling a Business to an Income Trust - Issues for Business Owners. Why Sell Your Business to an Income Trust? First Steps. Pricing. Exchangeable Securities, Retained Interests, and Subordination. Audited Financial Statements. Reporting Systems and Internal Controls. Business and Strategic Plan. Pre-IPO Restructuring or Changes. Outside Directors and Trustees. The Prospectus. The Underwriting and Sale Agreements. The Marketing Process. Post-IPO Obligations. Insider Trading. Conclusion Chapter Twelve: The Canadian Income Trust Market Today. The Two Main Benefits. Tax Effectiveness. Higher Distributions. Looking to the Future of Income Trusts. Increasing Size and Quality. Unit Holder Limited Liability Protection Is On the Way! More Institutional Involvement. More Choices. More Funds of Income Funds. Don't Forget the Risks! A Key Question: Is This a Bubble? The Long-Term Under-investment Risk Facing Canada. Conclusion. Canadian Income Fund Profiles. Index of Funds. Index. Author Biographies.