2003 Specialty Income Trusts

Aleem Israel – Associate Specialty Income Trusts
(416) 943-6435 Industry Comment January 10/03
®
Industry Comment
Specialty Income Trusts

®
TABLE OF CONTENTS
The Popularity of Income Trusts
History....................................................................................................... 1
Why Have Income Trusts Become So Popular?...................................... 1
How Income Trusts Work
Description................................................................................................ 4
Tax Efficiency ........................................................................................... 5
Structure ................................................................................................... 5
Determining Distributable Cash................................................................ 7
What Income Trust Investors Should Know
Liability...................................................................................................... 8
Taxation of the Trust ................................................................................ 9
Taxation of the Unitholder ...................................................................... 10
Sustainability of Payout Ratios .............................................................. 10
Conclusion................................................................................................... 10
Appendix 1: Canadian Income Trust Universe ........................................ 12

®
THE POPULARITY OF INCOME TRUSTS
History
Trusts have been around in various forms for hundreds of years, but their
more modern function, to securitize assets and/or debt, first appeared in
the 1980s. Initially, this was done with credit card and mortgage
receivables. Since then, trusts have grown to include real estate, oil and
gas and business trusts. The focus of this primer will be on specialty
business trusts.
Why Have Income Trusts Become So Popular?
The appetite for trusts has been evident. As of October 2002, the TSX
recorded 216 trusts with a market capitalization of $57.2 billion versus
174 trusts with market capitalization of $46.3 billion in 2001, and 140
trusts with market capitalization of $30.8 billion in 2000.
The current economic, equity and debt market environment has created
the perfect storm in favour of income trust products. According to the
Investment Dealers Association, "These instruments (income trusts) have
gained in popularity over the past 18 months as stock markets have
faltered and debt instruments have not provided investors with
acceptable returns in this low interest rate environment." Suddenly,
companies that grew too slowly for the technology boom of the 1990s,
but generated solid cash flows, have been able to gain greater access to
the capital markets as investors seek lower risk alternatives offering
reasonable returns through the return of capital (dividends/income). The
glaring evidence, according to the Investment Funds Institute of Canada
(refer to Figure 1), is the 26.7% increase in dividend & income mutual
fund assets to $26.9 billion, compared to the 8.5% and 15.4% asset
declines in Canadian and Foreign Common Share mutual funds,
respectively.
The current economic,
equity and debt market
environment has created
the perfect storm in favour
of income trust products
Canadian dividend and
income mutual fund assets
have increased 26.7%
FIGURE 1: Canadian Mutual Fund Assets (November)
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Balanced Cdn
Common
Foreign
Common
US
Common
Bond &
Income
Foreign
Bond &
Income
Dividend &
Income
$MM
2001
2002
Source: Investment Fund Institute of Canada, Sprott Securities Inc.
(416) 943-6435 - 1 - Industry Comment Jan. 10/03

®
Pension funds have been slow to embrace trusts, however, that is
changing. A basket of high-quality income trusts offer the opportunity to
generate a solid stream of low-risk income, thereby providing a
conservative investment vehicle to build a pension fund portfolio. In fact,
at a recent conference, a major institutional money manager recently
announced that it had received a mandate from a pension fund to manage
an income trust-only fund on its behalf.
The unlimited liability issue has been largely blamed for the slow or non-
existent move by pension funds into income trusts. However, as
discussed above, we are finally seeing signs of pension funds embracing
trusts as a viable investment vehicle, as the prevailing view in the legal
community is that the liability of a trust unitholder would be held by the
courts to be the same as the liability of a shareholder of a corporation
(see What Income Trust Investors Should Know: Liability on page 8).
While some disagree with this opinion, the issue will likely be litigated at
some point and this law will be tested.
Economic and Equity Market Environment: The current economic
environment suggests below-average performance. Since 1929, US
inflation has averaged 3.0% while real GDP has grown at 3.4% annually.
For 2003, real GDP and consumer prices are both expected to grow by
only 2.5%.1
As we progress through an environment of both anaemic
price and economic growth, the prospect for corporate profit growth is
uncertain. Furthermore, corporate and accounting scandals cloud the
corporate profit picture even more (see Corporate Governance below).
As the perceived certainty of growth in future corporate profits continues
to be low, the thirst for yield becomes increasingly evident. "Historically,
since 1926, we have witnessed dramatic shifts in stock and bond market
valuations. Prior to the mid 1950s, stocks were considered a good
investment only if their dividend yields exceeded bond yields."2
Over the
last 200 years, stocks have generated a real return of about 6.8% per
year. However, it is an under-discussed fact that 4.6%, or about two-
thirds of this return, was derived from dividends.3
The remainder
corresponds to the real annual growth in GDP over that time.
Prior to the mid-1950s,
stocks were considered a
good investment only if
their dividend yield
exceeded bond yields
Historical evidence also suggests that with the continued high price to
earnings ratios (P/E), we are likely to continue to see negative returns in
the near future given that the historical S&P P/E average is 14 times4
,
while the current P/E is slightly above 19 times.
Interest Rates and the Debt Market: The determination of a trust’s
yield is driven by a variety of factors including the relative yields of
long-term Canadian bonds. The relationship with corporate bonds (as
opposed to government) is the closest as the similar relative risk exists
that the threat of default on an interest (distribution) payment will
1
Andersen Economic Research Ltd. The Andersen Monthly Economic Report: Volume 18, Number 11. December
2002.
2
Jahnke, William. White Paper on The Asset Allocation Hoax. 1997.
3
Alexander, Michael. Stock Cycles. March 2000.
4
Mauldin, John F. The Case for a Secular Bear Market. 2002.

®
negatively affect the bond (unit) price, and increase the risk premium that
the market demands. Referring to Figure 2, from the period of January
1993 to December 2000, Canadian Corporate ten-year bond yields
explained 70.6% of the movement in our Sprott Specialty Income Trust
Index (SSITI).5
FIGURE 2: Ten-Year Corp. Bond Yield
vs. Sprott Specialty Trust Index
1
10
100
Nov-02
Dec-01
Dec-00
Jan-00
Jan-99
Feb-98
Feb-97
Mar-96
Mar-95
Apr-94
Apr-93
Log
1
10
100
1000
Inverted Log
Source: Bloomberg, Sprott Securities Inc.
Sprott Specialty Trust
I d
Corporate Bond
Yi ld
Since the beginning of 2001, however, the relationship between the
corporate bond yields and the SSITI disappeared as the bear market
began to flex its muscles and money began moving into defensive
investments such as gold and income trusts. The same relationship does
not exist with the S&P/TSX Income Trust Index, which is primarily
comprised of REITs and oil and gas trusts, whereas the SSITI is
comprised of only specialty (business) trusts.
The Gold Standard: As mentioned above, the relationship between
corporate bond yields and the SSITI fell apart at the end of 2000. Since
that time, however, the gold spot price has emerged as a good proxy for
movement of the SSITI. In fact, the gold spot price has proved to explain
86.9% of the movement in the SSITI, disclosing the fact that investors’
need for yield in times of uncertainty has been evident and the income
trust has emerged as one of the defensive investments of choice.
The gold spot price has
proved to explain 86.9% of
the movement in the Sprott
Specialty Income Trust
Index.
Corporate Governance: Negative corporate governance issues have
shattered investor confidence. Aggressive accounting and compensation
packages have led to the erosion of confidence and shareholder value. In
contrast, income trusts have catered to increasing investor confidence
through:
Trusts produce and pay
out real cash and do not
just produce an accounting
EPS number
1. Trusts produce and pay out real cash and do not just produce an
accounting EPS number. Furthermore, with the trust distributing
most of its cash flow (and not reinvesting it), management does not
have the liberty to invest in high-risk, low probability projects.
5
Sprott Specialty Trust Index: Market weighted index of business trusts (excludes REITs and oil and gas). Indexed to
22.41 on January 8, 1993.

®
2. Acquisitions must usually be immediately accretive. For an income
trust to raise equity to fund an acquisition, it must ensure that the
acquisition is immediately accretive to the new unit holders that are
expecting a distribution in the coming months (and not years).
HOW INCOME TRUSTS WORK
Description
Income trusts are essentially investment syndicates (or holding
companies) that pool together to acquire assets that generate cash flow.
After expenses have been satisfied, cash flow is then distributed among
the trust’s unit holders.
Since income trusts pay most of their cash flow out as distributions, the
ability to grow is limited. Therefore, the income trust best suits a
business with relatively stable free cash flows that do not need much
capital for growth.
The income trust best suits
a business with relatively
stable earnings that does
not need much capital for
growth
In addition to being a unit trust resident of Canada, the key legal
requirement that a unit trust must satisfy is one of the following6
two
requirements:
1. Not less than 95% of the fair market value of all issued units of the
trust (determined without regard to voting rights) include units
having conditions attached that require the trust to accept, at demand
of the holder, that the units be redeemed at prices determined and
payable in accordance with the terms of the trust (the redemption
requirement).
2. The trust:
a. Must be a resident in Canada throughout the year;
b. Its only undertaking must be the investment of funds in property
(except real property), the acquisition holding, maintaining,
improving, leasing or managing of real property or an interest
therein that is capital property to it, or a combination of the
above;
c. Not less than 80% of its property must be shares, property
convertible into shares, cash, bonds and debentures, marketable
securities, real estate or an interest in real property situated in
Canada, and rights to an interest in any rental or royalty in
respect of Canadian-based resources;
d. 95% of its income must be derived from, or from the disposition
of, these investments, and
e. Not more than 10% of its property may consist of bonds,
securities or shares in the capital stock of a corporation or debtor,
other than the federal, provincial or municipal government.
Condition (2) above is the investment requirement; and while REITs and
royalty trusts can be structured to meet this requirement, business trusts
6
Lewin, Richard. Heenan Blaikie LLP. Income Tax Issues Relating to the Income Trust, Pg 6. November 2002.

®
usually cannot, and therefore, must satisfy requirement (1) instead. The
satisfaction of requirement (1), the redemption requirement, is discussed
in Structure below. While the redemption requirement is essentially
never exercised given that most (if not all) business trusts are publicly
listed, it is nevertheless stipulated in the prospectus as the primary
mechanism for liquidity.7
Tax Efficiency
One of the main reasons an operating business would structure itself as a
trust, rather than as a corporation, is to take advantage of the tax efficient
structure. Typically, income trusts pay very little cash taxes. Since the
portfolio's investments are made through a trust, all income and expenses
are flowed through to the unit holders (see Structure below to see how
this is accomplished without taxation).
Income trusts pay very
little cash taxes
Income trusts distribute substantially all of its cash flow to Unitholders
on a monthly basis. If the trust’s cash flow exceeds its annual
distributions, the trust will distribute units on December 31st
equal to the
excess. Immediately afterward, the income trust consolidates the total
units back to the total number of units issued and outstanding prior to the
unit distribution. For example, assume an income trust has 1,000,000
issued and outstanding units. Suppose that 10,000 units are issued on
December 31 to satisfy its obligation to distribute 100% of its income.
Upon the issuance of the 10,000 new units, the 1,010,000 units will be
reconsolidated back into the original 1,000,000 units. This legal work is
typically conducted behind the scenes.
Please refer to Taxation of the Trust on Page 9 for additional information
on Canadian and US tax treatment.
Structure
The basic structure of trusts is quite easy to understand. More complex
trusts can be found with limited partnerships, trusts on trusts, or trusts on
partnerships intertwined primarily for increased tax efficiency.
The basic trust structure, as seen in Figure 3, helps explain the core
elements. The Unitholders are beneficiaries of the Income Trust and not
the actual operating entity (Holdco/Opco) or its assets. The income trust
essentially operates as a holding company that receives cash flows from
Holdco/Opco, which is typically a corporation.
7

®
FIGURE 3: Income Trust
Business Structure
Unitholders
Income
Operating
Trust
Trust
Holdco/Opco
Unitholders
Income
Operating
Trust
Trust
Holdco/Opco
Why are the cash flows not taxed between Holdco/Opco (a
corporation) and the Income Trust? On the formation of the trust,
there are a variety of transactions that legally must take place:8
1. The Income Trust is created.
2. An Operating Trust is established (for fulfillment of redemption
requirements) and the Income Trust will be its sole beneficiary.
3. The proceeds of the issuance of the Income Trust are used by the
Income Trust to purchase units and notes (typically 10% units and
90% notes) of the Operating Trust.
4. The proceeds received by the Operating Trust are used by the
Operating Trust to purchase high-yield subordinated notes issued by
Holdco and to subscribe for the common shares of Holdco (typically
1-5% shares and 95-99% notes).
5. Holdco will then purchase the shares of the target corporation
(Opco).
6. Holdco and Opco will amalgamate.
The amount of debt and yield between the Operating Trust and
Holdco/Opco is usually set at the magnitude of expected distributable
cash. Subsequently, cash flows from Holdco/Opco to the Income Trust
are made through interest payments, which is tax-deductible by
Holdco/Opco. All income trusts are taxable, however, as long as they
distribute all of their cash to unitholders (thereby shifting the tax
burden), they eliminate any taxable income. Since Income Trusts are not
taxable (as long as cash flow is paid out to beneficiaries, and not held by
8

®
the trust), these interest payments that the Income Trust receives are then
flowed directly through to the Unitholders (as distributions).
Why is a corporate structure used as Holdco/Opco? The primary
reason is that the actual income trust cannot carry on a business as
stipulated in trust law; however, it can act as a “holding company”
instead. The second key reason a corporation is used as the actual
operating entity (Holdco/Opco) is to provide limited liability to its
shareholders who, in this case, is the Income Trust and in turn, the
Unitholders.
Why is the Operating Trust inserted between the Income Trust and
Holdco/Opco? When satisfying the theoretical redemption clause
discussed above, Canada Customs and Revenue Agency (CCRA) has
issued rulings that allow the Income Trust to pay the redemption of units
by distribution of trust assets instead of cash.9
Hence, the Operating
Trust is placed below the Income Trust so that if a Unitholder requests
redemption (rather than selling the units on the public market), the
Income Trust redeems units and notes it owns in the Operating Trust as
opposed to being obligated to pay cash on demand, which would result in
running the actual business inefficiently. For example, to meet the strict
redemption requirement, an Income Trust’s operating business would
have to keep a cash store or sell operating assets on demand that may be
necessary for the day-to-day operation of the business.
Determining Distributable Cash
Distributable cash, which is not an accounting measure defined by
GAAP, is essentially free cash flow that the income trust has available
for payout (and not reinvestment). There are two variations of
determining distributable cash: bottom-up or top-down.
Top-Down: The widest and quickest measure of determining
distributable cash is the top down method starting with earnings before
interest, taxes, interest, depreciation and amortization or EBITDA. From
EBITDA, the following components are subtracted: interest, cash taxes
and maintenance capital expenditures (refer to Table 1). Finally, the
proceeds on asset sales may be added.
9

®
TABLE 1: Top-Down Approach
ABC Income Fund
2003E Statement of Distributable Cash
(000s, except per unit amounts)
2003E
EBITDA 30,000
Subtract:
Interest 2,000
Cash taxes 100
Maintenance capital expenditures 7,500
20,400
Add: Proc. - Sale of Assets 500
Distributable Cash 20,900
Bottom-Up: Another way to measure distributable cash is to start from
net income (refer to Table 2). From there, add back the non-cash items
such as future income taxes, depreciation and amortization, and any loss
or gain on the sale of assets. Finally, subtract capital expenditures and
add the proceeds from the sale of assets.
TABLE 2: Bottom-up Approach
ABC Income Fund
2003E Statement of Distributable Cash
(000s, except per unit amounts)
Net Income 15,000
Add Non-cash Items:
Depreciation and Amortization 10,400
Future Income Taxes 2,000
Loss/(Gain) on Sale of Assets 500
27,900
Minus: Capital Expenditures 7,500
Add: Proc. - Sale of Assets 500
Distributable Cash 20,900
WHAT INCOME TRUST INVESTORS SHOULD KNOW
Liability
It is the consensus opinion in the legal community that the unlimited
liability of unitholders is very remote. Many legal opinions have been
registered holding that there is only a very remote chance that any
liability would accrue to unitholders if the trust’s assets were insufficient
to satisfy creditor demands.10
The ambiguity comes from the fact that trust law is hundreds of years old
and it was not originally created with business trusts in mind.
Interpreting Ontario law strictly would hold that any beneficiary of a
trust (the unitholder) is liable if the assets of the trust are not sufficient to
fulfill a bankruptcy or catastrophic lawsuit. However, the amount that
can be claimed from the unitholder is limited to the benefits
10
Erlichman, Stephen I. Income Trusts: Some Legal Considerations. November 2002.

®
(distributions) that it has received. For example, if John Doe receives a
$100 distribution from the trust, he would only potentially be liable for
$100.
However, with the advent of business trusts, there are a few
precautionary measures that have been taken to specifically protect
unitholders:
1. In the Declaration of Trust, it declares that the unitholders shall not
be held liable for any shortfall that may arise in the fund’s assets.
This is where the ambiguity about unitholder liability comes about,
because there has never been a case where this Declaration was
challenged.
2. Every contract that the Fund’s operating business signs for
operations is intended to contain a paragraph that states that there
will be non-recourse to the unitholders. This has been upheld in the
courts through limited partnership precedence.
3. The actual operating entities of an income fund operate as
corporations. Therefore, the shareholder (the income trust) of this
corporate operating entity has limited liability, and therefore,
unlimited liability protection should be passed through to the
unitholders.
Numerous organizations have been lobbying provincial governments to
change the law, in order to specifically grant limited liability to
unitholders of a trust. In fact, laws in Quebec, Manitoba and Delaware
are already quite protective of unitholders.
Taxation of the Trust
Canada: There has been wide speculation that the CCRA would put an
end to businesses operating as trusts; however, we do not believe this is a
priority for the CCRA’s radar screen given the following:
1. While the growth of income trusts has eroded the corporate tax base
to the tune of approximately $1 billion a year, income trusts have
also generated tax dollars on corporate conversions and also on fees
related to public offerings.
2. Income trusts are widely held by retail and institutional investors.
Any tax or policy change would be very political in nature, and
would cause heavy lobbying and uproar.
Investment decisions on the basis of what the Department of Finance
might or might not do in the future are unreasonable. For example, there
is always the possibility of the corporate tax rate being changed, but most
investors do not make investment decisions based on this. If a change is
made, it would be made in a budget, and only then will it be the time to
review the situation and take the appropriate action.
US: With US businesses, and Canadian businesses with substantial US
operations becoming income trusts, there has been speculation that the
US Internal Revenue Service (IRS) would re-classify the underlying debt

®
instruments as equity, thereby disallowing tax deductibility of interest
payments.
To alleviate this worry, the businesses that fall into this category
structure themselves so that they qualify for classification as US “fixed
investment trusts,” which essentially allows interest deductibility. Under
this structure, the concerns about excessive debt being viewed as equity
by the IRS are relieved at the expense of reduced leverage, which leaves
more tax leakage than in a pure Canadian vehicle. However, despite
some tax leakage, these trusts still provide very attractive returns.11
Taxation of the Unitholder
Canada: Distributions from business trusts are largely interest income
flow-through, as opposed to REITs that also offer a return on capital as a
portion of the distribution. Therefore, distributions are taxed as income
(i.e. at the taxpayer’s marginal tax rate). However, tax-exempt
institutions do not pay tax on these distributions. Furthermore, those
holding the trust investment in a tax-deferred plan are sheltered given
that most Canadian income trusts are considered domestic content within
registered plans.
Non-Canadian Residents: Investors outside of Canada that purchase
income trusts are subject to the 15% withholding tax on distributions;
however, tax-exempt institutions (i.e. pension funds) are relieved of this
tax burden. Despite the withholding tax burden, the current average
income trust yield of 11.0% (refer to Appendix One) still returns non-
Canadian residents approximately 9.5% on an after-tax basis.
Furthermore, the new proposed US tax law to eliminate taxation of
dividends at the individual level may promote the value of some income
trusts that pay a portion of their distribution out as dividends as opposed
to interest.
Sustainability of Payout Ratios
The newer business trusts are typically hitting the market with payout
ratios in the mid-to-high 90% range. In our opinion, this payout rate is
unsustainable. However, this does not necessarily mean that a given trust
will have to cut distributions, but what it may mean is that an increase in
future cash flows may not necessarily translate into an increase in
distributions.
CONCLUSION
The popularity of income trusts is far from over and history is
working in its favour. With the outlook for below-average economic
growth, low interest rates and a secular bear market, investors are likely
to continue to hunt for defensive investments such as gold and income
trusts that offer yield as opposed to the popularity of capital gains during
the late nineties.
11
Romano, Simon. Stikeman Elliott. New Developments, Emerging Trends and the Future of Income Trusts in
Canada. 2002.

®
Investor awareness and education is increasing. With the highly
misunderstood unlimited liability concern, investors are now becoming
more comfortable with the issue; pension funds are finally starting to
bring income trusts into portfolios. Furthermore, we are likely to also see
Canadian equity generalist funds and US money managers, who have
been slow to embrace income trusts, enter the income trust market in
search of lower risk and solid returns.
The stability of distribution streams and clear optics of income trusts
is likely to continue to allow them to outperform the market in 2003.
We do not believe that the bear market is over and yield will continue to
become increasingly important. Furthermore, as more business trusts
prove their worth as income trusts, we are likely to see declining yields
as the perceived risk declines. For example, Connor Bros. Income Fund’s
(we use this example because, (1) Connor Bros. is one of the older
business income trusts, (2) its distribution has not changed during 2002,
(3) it has not made any significant financial or corporate changes during
2002) yield (unit price) has declined (increased) from 10% ($12.00) at
the beginning of 2002 to 8.8% ($13.70) at the end of 2002 (see Figure 4).
The same trend is likely to follow some of the new lower-risk business
trusts over the coming year.
FIGURE 4: Connor Bros. Income Fund 2002 Perf.
$10.00
$10.50
$11.00
$11.50
$12.00
$12.50
$13.00
$13.50
$14.00
$14.50
12/31/2002
12/4/2002
11/8/2002
10/16/2002
9/20/2002
8/27/2002
8/1/2002
7/9/2002
6/12/2002
5/16/2002
4/23/2002
3/28/2002
3/5/2002
2/7/2002
1/14/2002
Price($)
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
Yield(%)
Source: Baseline, Sprott Securities Inc.
Yield
Unit
P i
As more business trusts are introduced to the market, we expect see yields
differ more widely across trusts. For example, referring to Appendix One,
the market demands a 2.43% yield premium for transportation and
logistics trusts as opposed to consumer products trusts in order to
compensate for the relative sensitivity to economic cycles. Thus, in terms
of investment strategy, it is prudent to select top quality business trusts
with relatively conservative payout ratios, solid management teams and
sustainable, to growing, cash flow profiles.

®
APPENDIX ONE
Canadian Income Trust Universe
INCOME TRUST UNIVERSE
Company Ticker
Unit
Price
Market
Cap Dist. Yield
Consumer Products
Associated Brands ABF.U $10.85 127.2 $1.08 9.91%
Clearwater Seafood CLR.U $10.32 241.0 $1.15 11.14%
Connors Bros. Income Fund CBF.U $13.80 215.5 $1.20 8.70%
KCP Income Fund KCP.U $11.43 293.7 $1.10 9.62%
Menu Foods Income Fund MEW.U $13.49 172.8 $1.18 8.71%
North West Company NWF.U $20.90 334.6 $1.58 7.54%
Rogers Sugar RSI.U $4.73 367.6 $0.46 9.62%
SCI Income Trust SMN.U $11.78 88.4 $1.20 10.19%
Swiss Water Income Fund SWS.U $10.90 59.7 $1.30 11.93%
Average 9.71%
Transportation and Logistics
Chemtrade Logistics CHE.U $14.20 184.2 $1.59 11.20%
Contrans Income Fund CSS.U $9.30 154.4 $1.25 13.44%
Livingston International LIV.U $11.45 170.7 $1.15 10.04%
Oceanex Income Fund OAX.U $12.12 104.7 $1.12 9.28%
PBB Global Logistics PBB.U $10.70 62.3 $1.50 14.02%
Transforce Income Fund TIF.U $7.88 372.9 $1.14 14.47%
Versacold Income Fund ICE.U $8.20 158.6 $0.93 11.34%
Westshore Terminals WTE.U $4.63 320.2 $0.62 13.31%
Average 12.14%
Energy/Environmental Services
CCS Income Trust CCR.U $16.80 279.9 $1.68 10.00%
Energy Savings Income Fund SIF.U $13.85 517.6 $1.01 7.30%
PRT Forest Regeneration PRT.U $10.03 73.3 $0.88 8.73%
Average 8.68%
Industrial Products
Foremost Industries FMO.U $6.50 32.2 $0.70 10.77%
General Donlee GDI.U $9.50 82.8 $1.45 15.26%
Tree Island Income Fund TIL.U $9.60 154.0 $1.28 13.28%
Average 13.10%
Other
Advanced Fiber AFT.U $10.50 137.4 $1.20 11.43%
Arctic Glacier Income Fund AG.U $8.80 138.9 $1.05 11.93%
Bell Nordiq Income Fund BNQ.U $10.90 355.4 $0.90 8.26%
Davis + Henderson DHF.U $12.80 488.4 $1.32 10.31%
Gateway Casinos GCI.U $10.33 272.6 $1.20 11.62%
SFK Pulp Fund SFK.U $10.38 459.0 $1.20 11.56%
Timberwest Forest TWF.U $11.95 912.7 $1.08 9.02%
Average 10.59%
Universe Average 10.80%
Source: Baseline, StarData, Sprott Securities Inc.

®
- NOTES -

RESEARCH ANALYSTS
Director of Research
INSTITUTIONAL SALES Scott Lamacraft, CFA (416) 943-6426
Peter Charton (416) 943-6451 Consumer Products & Special Situations
Simon Lussier (514) 878-0009 Andrea Harbour, CFA (416) 943-6424
Gabriel Ollivier, CMA, CFA (403) 750-7200 Economics
Roger Poirier, CFA (416) 943-6447 Peter Andersen, Ph.D. (416) 364-7772
Cendrine Rollet (514) 878-0009 Energy Service Sector & Special Situations
Chris Roy, CFA (416) 943-6433 Scott Lamacraft, CFA (416) 943-6426
Kevin Williams (416) 943-6437 John Bereznicki, CFA (403) 750-7207
David Viljoen (416) 943-6487 Health Sciences
Zoran Vukasinovic (416) 943-6438 David Dean (416) 943-6722
Industrial Technology
EQUITY TRADING Sarah Hughes, CFA (416) 943-6485
Toronto Toll-Free (800) 407-6272 Mining
Montreal Toll-Free (888) 322-9666 George Topping (416) 943-6423
Jay Bakker (416) 943-6428 David Stein (416) 943-6407
John Brikis (514) 878-0009 Oil & Gas
Scott Connolly (416) 362-6342 Ryan Shay, CA, CFA (403) 750-7202
Ryan Lloyd (416) 362-6341 Special Situations
Taylor Shambleau (416) 362-3440 Leigh Gardner, CFA (416) 943-6431
Sonia Tomei (416) 362-3602 Heather Hatch (416) 943-6415
Technology
INVESTMENT BANKING Brandon Osten, CFA (416) 943-6427
Craig Bridgman (416) 943-6452 Susan Streeter, CFA (416) 943-6425
Robert Chalmers (416) 943-6412 Vigen Ghazarian, CFA (416) 943-6460
Duff Kovacs (416) 943-6409 Research Coordinator
Michael McCloskey (416) 943-6443 Natascha Swyrydenko (416) 943-6421
Philip Moore, CFA (403) 750-7206 ASSOCIATES
Darren Wallace, CFA (416) 943-6411 Aleem Israel (416) 943-6435
Brent Watson (403) 750-7201
HEAD OFFICE
Royal Bank Plaza South
Suite 3450
Toronto ON
M5J 2J2
Tel: (416) 362-7485
Fax: (416) 943-6499
Toll Free: (800) 461-2275
MONTREAL OFFICE
1800 McGill College Ave
Suite 2104
Montreal PQ
H3A 3J6
Tel: (514) 878-0009
Fax: (514) 878-1514
Toll Free: (800) 699-5946
CALGARY OFFICE
300 - 5th Avenue SW
Suite 2950
Calgary AB
T2P 3C4
Tel: (403) 266-4240
Fax: (403) 266-4250
Toll Free: (800) 461-9491
This report is issued by (i) in Canada, Sprott Securities Inc., a member of the IDA and CIPF, and (ii) in the US, Sprott Securities (USA) Limited, a member of the NASD. Every
province in Canada, state in the US, and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be
offered to their residents, as well as the process for doing so. As a result, some of the securities discussed in this report may not be available to every interested investor. This
report is not, and under no circumstances, should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally
permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to all clients and does not have regard to the
particular circumstances or needs of any specific person who may read it. This report is provided for information purposes only and does not constitute an offer or solicitation to buy
or sell any securities discussed herein.
The information and any statistical data contained herein have been obtained from sources believed to be reliable as of the date of publication, but the accuracy or completeness of
the information is not guaranteed, nor in providing it does Sprott Securities Inc. assume any responsibility or liability. All opinions expressed and data provided herein are subject to
change without notice. The inventories of Sprott Securities Inc., its affiliated companies and the holdings of their respective directors, officers and companies with which they are
associated may have a long or short position or deal as principal in the securities discussed herein. A Sprott Securities Inc. company may have acted as underwriter or initial
purchaser or placement agent for a private placement of any of the securities of any company mentioned in this report, may from time to time solicit from or perform financial
advisory, or other services for such company. The securities mentioned in this report may not be suitable for all types of investors; their prices, value and/or the income they
produce may fluctuate and/or be adversely affected by exchange rates.
No part of any report may be reproduced in any manner without prior written permission of Sprott Securities Inc.

2003 Specialty Income Trusts

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (7)

Similar to 2003 Specialty Income Trusts

Similar to 2003 Specialty Income Trusts (20)

2003 Specialty Income Trusts