The New Canadian Energy Income Trusts


Today I bring you the new class of an old investment vehicle.

You may recognize them. They’ve been around for a long time, after all.

The old class was the perfect kind of income play for conservative, yield-hungry investors.

But alas, they became a tax burden for the Canadian government, and were disbanded (much to the chagrin of investors.)

Now, we’re back at it again… but in a different form.

It’s called the Energy Income Trust.

Trusts pay distributions to shareholders on a regular basis from the cash flow they get from their oil (or gas)-producing properties.

They trade on the Toronto Stock Exchange (TSX), and just about any investor can participate. (Note that withholding for U.S. residents is 15%, but you can apply to the I.R.S. for a foreign tax credit — which is essentially a refund. Do consult with a qualified tax advisor before investing.)

My feeling is that investor demand for these trusts are only going to increase. In a volatile market, dividend plays perform best, and I think these trusts could become huge winners for investors, providing steady payouts over the long haul.

(This is where I’m putting some of my money right now… to preserve capital — and get paid — while I wait for the market to bottom, and start a new uptrend.)

I explain the trust in more detail in my new video below, including the names and ticker symbols of two energy trusts that deliver excellent dividend streams.

Click here to watch the video. It’s short — roughly 3 minutes, but should give you a good starter course on these two exciting new dividend plays.

Note:  Keith Schaefer owns Eagle Energy.