Yowsa. Gotta watch this bloomberg video :)

[javacat97]

Re: Yowsa. Gotta watch this bloomberg video

Thanks Finster. It looks like I have some homework.... With the caveat of due diligence, are there any names you would suggest to start with? If you don't want to get specific that's alright as well.

JavaCat

[jk]

Re: Yowsa. Gotta watch this bloomberg video

a note on canadian trusts - to the degree that you get into the energy sector you do not have a currency investment as well. the value of your energy trust will vary with the global value of energy irrespective of currency [more or less; more with oil, less with gas which is more local, but you get the idea.]
if you get into canadian reits, business trusts, or trust mutual funds you get more real currency exposure.

[Finster]

Re: Yowsa. Gotta watch this bloomberg video

Thanks Finster. It looks like I have some homework.... With the caveat of due diligence, are there any names you would suggest to start with? If you don't want to get specific that's alright as well.

JavaCat

I like (and own) Enerplus Resources (ERF) and Provident Energy (PVX). One selling point for me was one that is not necessarily applicable to other investors, however, and that is that I preferred something that traded on a US exchange. The idea being that trusts that listed in the US were sort of putting out the welcome mat to US investors and might cater to them better.

Enerplus is probably regarded as more solid by the markets (it is well established), but its lower yield reflects that. Provident comes with substantial refining capacity, which has been a boon in light of the US refining capacity limitations so well publicized over the past year. In a way, ERF and PVX are complementary to each other in that their different characteristics mean they don't necessarily zig or zag in lockstep, which was also a selling point for me.

Valuations (based mostly on dividends and book value) by my reckoning are such that both are selling nicely below what I consider to be fair value. So for folks looking for both energy exposure and yield, they are quite compelling. Not to say that others in the sector are inferior; these happen to be the ones I am most comfortable with.