Dear Investor:

Seriously, why would you settle for 2% yields? 

Why, when you can have 5-8 times that, and with as safe an investment as I’ve ever seen?

I’m talking about Canadian income trusts. 

Ordinarily, I’d be suspicious of any investment that was such a giveaway.  But I assure you, Canadian business trusts are for real.  

In fact, it’s written into Canadian law that nearly all the earnings from a trust business must flow through to the investors… which means YOU. You don’t need to settle for the crumbs we call “dividends” from the stingy S&P.

And, thanks to the foibles of Canada’s finance minister, some business trusts are yielding windfall profits to their investors. To explain this, though, I need to go back to Halloween night, 2006.

The Trust Melee of ’06

It was on Oct. 31, 2006, that Canadian finance minister, Jim Flaherty, proposed that (some) Canadian business trusts would be taxed the same as ordinary corporations, beginning in 2011. It set off a firestorm of fear and some investors swore off Canada entirely.  Forever!

That’s the kind of wild-eyed emotion that value guys like me always like to see. These are the times I live for, when the opportunity is so clear you can taste it.

It’s almost a year since Mr. Flaherty’s tax manifesto and the 9 and 10 percent yielders in the Canadian Edge portfolio are still growing dividends 10 percent and more a year.

We have plenty of other reasons to be optimistic:

First, some income trust businesses will remain tax-exempt, virtually in perpetuity. (And when you read my newsletter, Canadian Edge, you’ll certainly know which ones they are.)

Second, the proposal provides a four-year grace period before eligible existing trusts could be taxed. Current trusts will continue to pay their fat distributions.

For those trusts that could be subject to tax in 2011, my advice is:“wait and see”. His Conservative party is a minority government, and the chief opposition Liberal party is proposing a top tax rate of just 10 percent. 

The average Canadian corporation pays only about 6.7 percent of its income in taxes right now. At the end of the day, trusts can find just as many loopholes to cut their burdens.

And, four years is an eternity in politics. It gives Canadian authorities plenty of time to allow certain businesses back into the income trust fold.

I think you see my point: It’s hard to lose if you buy in now. Trust prices have fallen in the face of uncertainty, giving you a great entry point and super-sized yields.

Trusts that were yielding 10% last November are now paying 12%. The actual businesses underlying these trusts haven’t changed a bit. Conservatively run, high-quality income trusts are as solid as ever, and I have no doubt they will prevail for years to come.

Remember: the current yields still hold until 2011. So the owners of Algonquin Power, just to pick one of my favorites, will still receive 10.5% on their capital for the next four years.

Most important: Even if some trusts are taxed four years from now, these companies will still be paying yields that dwarf your options in the Dow and S&P. Dozens of trusts now yield more than 10%, some as high as 17% to 21%.

Moreover, Mr. Flaherty’s prospective changes are already priced into the market considering the bargains out there right now. Any change could bring a windfall, and no change just means the status quo.

And Here’s the Best News

The opportunity with Canadian income trusts in the wake of Mr. Flaherty’s foibles could eclipse anything we’ve seen before. In fact, the comeback is well under way, thanks to a new group of cash-rich buyers: Foreign Capital.

Say what you will about Blackstone, KKR, Macquarie Bank and the myriad others who control an estimated $3 trillion in private cash now sloshing around the world. But these guys are concerned about one thing: The bottom line. And they’re seeing huge potential up north.

Private capital was mostly shut out of the Canadian trust market for years.

What’s different now? Trust managements are willing to listen to offers, if the price is right. And with so few truly high-quality, cash-rich businesses around, private capital is paying up. 

And while I can’t make windfall promises for every trust in the Canadian Edge portfolio, I know you can see the huge upside in this for trust investors!

For example…

UE Waterheater is far from a household name in this country. But anyone who heeded Canadian Edge’s buy recommendation on this trust raked in a premium of over 50 percent when Australian conglomerate Alinta bought it for $22 a share in cash—well above any price UE had ever traded for.

We’ve already seen some three dozen private capital takeovers of trusts. Even the weakest trusts have reaped offers of 10 to 15 percent above market. Stronger fare have netted 20, 30 percent and more. And with so many cash-rich trusts still out there, we’ve only scratched the surface.

Foreign capital interest is only one of many reasons the best Canadian trusts will shine for investors. In fact, these takeovers are really just rock-solid confirmation of the kind of values that are out there—great, growing businesses selling on the cheap… but not for long.

You see, unlike some of the other advisories that have covered Canadian trusts the past few years, I’ve never been in love with trusts for their ability to dodge taxes. Rather, I’m smitten by the ability of the best of them to grow fast and their willingness to share this good fortune with big, rising dividends to you and me.

My staff and I kept our focus on buying and holding trusts backed by high quality, growing businesses. And that, my friend, is how we’re going to keep building wealth for you, and well past 2011.

Shortcuts to Exponential Growth:  Some Examples

• Enerplus Resources was worth just $9 million at its start 19 years ago, yet now is worth $6.2 billion. Considering that it has returned 85% of its earnings to shareholders (which Canadians call “unitholders”) in the meantime, that’s incredible growth.
• During the last four years, the share price of natural gas retailer Energy Savings Income Fund has more than tripled, because of 27 hikes in its dividends (“distributions”). And even after this rocket ride, it still yields a decent 5.7%.
• In the last three years, Arc Energy Trust buyers have seen their opening ante grow 219% while their dividends have soared also. That’s what I call “playing both sides of the street.”
• It’s not only energy sector trusts that have made the big gains. For one instance, RioCan, a hotel trust, has awarded its unitholders an 18.98% annual return for the past 10 years. Compounded, that’s a total of 461%. And in the
  meantime, its dividend has nearly doubled.          
• The few trusts that have been around for a decade or more have produced some breathtaking gains. Take Vermilion
  Energy Trust. Since its inception in 1994, it’s up an astounding 20,174%. That’s 202 to 1!  The original unitholders
  have seen each $10,000 investment explode into $2,147,000, not including dividends!

Having said all that, I must add that converting to a trust is not a magic trick that works for any business. Some firms have to have the ability to accumulate huge piles of cash. It’s not that they’re greedy pigs, it’s just that their business may be seasonal or cyclical, and they must stockpile cash for those lean times. That won’t work if they’re forced to keep pouring their profits into unitholders’ pockets every month.

Our Total Return: 59.8% in 18 Months

In our first 18 months, our initial portfolio, consisting of just eight trusts, has given our readers a total gain of 59.8% (growth plus dividends).

That’s about a 40% profit per year. Could you live on that?  And do you think a 40% annual return merits paying $399 a year for my online newsletter, Canadian Edge?

I hope you’re thinking the answer is obvious. After all, income trusts are not inherently risky. As a rule, they’re even less volatile than American blue chips.             

Now, where else can you find a guardian angel (meaning me) who will guide your footsteps toward these safe pastures...while keeping you in clover up to your knees, grazing on lush green profits in the vicinity of 40%?

Safety is my middle name.Your wild profits will come from tame Canadian trusts. No IPOs. No 10-1 long shots. No new trusts. You simply don’t need risky investments when you’re safely getting double-digit distributions plus possible high appreciation.

I’ve built my career around finding high-yield dividends. For 17 years, I’ve edited Utility Forecaster...without one losing year in my income portfolio. I’ve written books and lectured around the world on how to get rich without gambling on speculative stocks.
And in all that time, I’ve never seen dividends this high and this safe together.

For you, it’s a once-in-a-lifetime opportunity. I’m not trying to rush you. I never rush anybody. I’m just saying, don’t wait for the next bus because there won’t be one; Canadian trusts are a unique event. Consider soberly what I’m saying, but don’t dally with your subscription. You know what happens to things you dally with!

You Can Beat Wall Street With One Hand Tied
Behind Your Back

The U.S. stock market has historically given total gains (dividends plus growth) of 9% a year. Some of the Canadian trusts I cover in Canadian Edge are offering you twice that...just in dividends! Any capital appreciation is gravy on top of that.
And you’ll have less risk than with blue chip stocks!

Now, I don’t usually joke about serious matters like this, but nobody comes even close to matching our portfolio record for Canadian trusts. Canadian Edge is indisputably #1 in our field. That’s because there is no #2!

Yes, that’s right. We have the only service devoted to giving Americans advice on Canadian trusts... and I don’t think that will change anytime soon. I have too much of a head start on the field.

For instance, my website gives you a live feed of trust prices from the floor of the Toronto Stock Exchange. It has a fast (15-minute) data turnaround, which is pretty good... and it’s all converted into U.S. dollars. But here’s the clincher:  Nobody
else is offering any accurate trust data feed to U.S. residents at all! (And they won’t do it in the near future, either; I’ve got an exclusive agreement with the only firm in Canada that produces good data.)

Frankly, few of my readers are interested in following the trust markets that closely. Mostly, they’re delighted just to find a set of investments that will let them relax, check their holdings every week or two, and stroll out to the mailbox once a month to collect their distribution checks. It’s a lifestyle. (And it’s focused more on golf and tennis than live data feeds!)

But here’s my point:  Canadian Edge is now the 900-pound gorilla in the income trust field, and it offers you everything you could want, whether that’s more playtime or an exciting, intensive way to multiply your money.

Another Great Year

During the past 12 months, Canadian Edge held 23 trusts the entire time.
Out of that 23:

• 17 gave us a total gain over 20% each.
• And 7 of those gave us a total gain over 50% each.
• The average was an impressive 30%.

In that time, the S&P 500 rose 12.7% and the Dow rose 1.7%. What a wretched performance compared to our 30%!

And don’t expect the comparison to be much different a year from now. Every one of our current holdings is in the black.

Most of our readers don’t hold our entire portfolio. They cherry-pick, which I think is just fine.

If you’re a little hesitant about “Exactly where do I start?” then you can just go to my monthly column entitled, Highest Yield of the Month.

It will give you the one or two conservative Canadian trusts that are currently throwing off the biggest monthly distributions. (I don’t often list the absolute highest yielders in the nation because sometimes they’re companies in trouble and are giving super-high yields in desperation.)

By all means, start modestly. Get a feel for your trusts. Then add on. You’ll soon find yourself genuflecting as you walk by your mailbox.

The Greatest Income Investments in the U.S.
are All in Canada!

While U.S. stocks bounce wildly, most of our select trusts keep steadily increasing their distributions... often by 10% a year. That means their values rise. That’s why I give you each month a fresh “buy up to” price for every trust I track.

There’s not one nook or cranny of Canadian Edge where you’ll find any cobwebs.

Some other factors worth considering:

• Some of the best Canadian trusts aren’t sold on U.S. exchanges. But when you join, I’ll show you how to buy them right here anyway!  Painlessly! Basically, Canadian trusts are easy to buy, and they give you instant liquidity.
• You don’t need a long, white beard to buy trusts. Like stocks, some are conservative and some are aggressive. But overall, studies show that Canadian trusts are safer and less volatile than stocks.
• Utility yields are about three times higher than CDs, yet they’re taxed at only 15%, just like any normal dividend.
  (Most super-high-yielding instruments in the US are taxed as ordinary income.)
• If interest rates rise, you’ll find that your trusts are much less sensitive to that. And Canada has only mild inflation pressure anyway.
• Many investors are waking up to find their cash cows up 30% or more in a day as Foreign Capital firms realize the true value of trusts.

Never Lost, Never Late

You’ll never have an issue of Canadian Edge get lost in the mail: it’s strictly Web-based!

Of course, if you’re a paper addict or heavily invested in Weyerhaeuser or Georgia-Pacific, you can always indulge yourself by downloading it and printing it out. But as my kids would say, “Dad, that’s sooo 1990s!” Besides, our members-only website lets you access every article I’ve ever written, so you never have to archive stacks of dusty papers.

And how do you know precisely when Canadian Edge comes out each month? 

I’ll send you an e-mail the second I post it online. If you happen to be too busy at the moment, no problem. My e-mail itself will give you a quick overview of this month’s Canadian trust scene. It will also give you some one-click hyperlinks that take you directly to whichever part of Canadian Edge you want to jump to. You’ll discover a wealth of precise advice on www.CanadianEdge.com, including numerous “inside information” articles and special reports.

Order for a year and get the following three reports, click here:

Energize Your Cash Flow: Five Oil and Gas Royalty Trusts
Getting the Business: The Four Best Business Trusts
  You Can Buy Now
Power Plays: Four Power Generation Trusts to Buy Now

If you enroll for two years, you’ll get three more bonus reports, click here:

Building Wealth: My Four Favorite Canadian Real Estate
  Trusts to Buy Now
Money Flow: Canada’s Two Best Pipeline Trusts
Best Two Income Trust Mutual Funds to Buy Now

Many readers do join for two years because it saves an additional $69 ($271 off the regular $1,000 price) and locks in the introductory rate for two years. Still not sure? Click here to try Canadian Edge for $99 on a quarterly till-forbid basis.

You might also receive an e-mail Flash Alert once or twice a month if a major trust news story is breaking. But my alerts are designed to lower your blood pressure, not raise it. This is no traders’ letter. In actual practice, you’ll likely hang onto your average trust about a year or two. I simply want to keep you up to date.

To get you started on the right foot, I’ll point you to our comprehensive Canadian Edge Subscriber’s Guide. This handbook tells you everything you wanted to know about Canadian trusts. More important, it spells out how to use this service to make
serious money.

In a Class by Ourselves

I realize a few Wall Street gurus have jumped on the Canadian trust bandwagon recently, but none of them have a proven record of profits anywhere close to ours. And none of them tracks Canadian business conditions, regulatory changes, tax issues, ownership restrictions, currency exchange trends, payout ratios, payout histories, new shares issued, debt levels, and proven oil reserves. Trust me, you really don’t want to monitor these issues by yourself!

Hire me as your guardian angel, and I’ll protect you from the pitfalls of income investing. In contrast with ordinary angels, I’ll even try to answer your e-mails promptly. I’ve done so for 18 years, staying in touch personally with over 25,000 subscribers to Utility Forecaster, and I’ll continue that pledge for you.

As I mentioned earlier, my publisher will make that $99 a quarter, about the  same price, but a bit more painless. A good half of our new members are choosing to have a $99 auto-renew on their credit card every three months on a till-forbid basis. That’s the only sure way of locking in the price long term. Everybody else will be subject to yearly price hikes.

A new newsletter will usually lose 75%–80% of its readers by the end of their first year. But thanks to our convenient quarterly billing option, Canadian Edge is getting an unheard-of 85%–90% renewal rate. That speaks oceans, doesn’t it? Apparently a lot of people like making seven times the S&P! 

My publisher does have a 90-day 100% money-back guarantee, but it’s seldom needed. Cancellations are a rarity around here. So subscribe now by calling toll-free 1-800-832-2330 and download your free reports today. You’ll never go back to your old life. Fat monthly checks are terribly habit-forming!

And with our full guarantee, you’re not risking a penny. So the only question is: Are you ready to move up to somewhere in the neighborhood of 40% total profits a year? 

CLICK HERE TO ORDER NOW!

Sincerely,

Roger S. Conrad, Editor
Roger Conrad’s Canadian Edge

CLICK HERE TO ORDER NOW!