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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

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To: Scott Mc who wrote (3476)	6/16/2002 6:39:07 PM
From: Peter W. Panchyshyn	Read Replies (1) of 11633

EIT is a trust and not a fund holding trusts, ------- I direct your attention to the original posting which started this talk of trusts of trusts ( post #3411 Message 17584866 ). There it specifically talks of the trust of trusts SDT.UN. You can't provide any evidence of what you suggest for the original discussion about trusts of trusts like SDT and EIT. So you look to a fund of trusts and try to use that to discredit a trust of trusts. TALK ABOUT COMPARING APPLES AND ORANGES. The least you could do is stick to what the discussion is about. ------------- and frankly while I much prefer a company issuing rights over shares, it strikes me as odd that they would issue rights and buy back shares at the same time. ------- Have trouble with understanding the info provided it is not the same time. The rights were late january to late february. The buyback commences may 30 2002 and runs for one year. I provided it to show the trust of trusts management will do whatever they can do whenever they can do it to maximimize the benefit for trust unitholders and that is what the extra fee gets you. ------------ 1.0 Why funds holding trusts pay out less than trusts Give 1000$ to Fund: Fund buys 1000$ worth of REIT with a 10% payout REIT pays $100 to fund, fund takes 2.5% of $1000 or $25. $100 payout - $25 = $75 paid to shareholders REIT holder gets $100 Fund holder gets $75 Actual example would be worst, since a Fund never invests 100% and they would also take a % of the payouts. -------- You want to talk of funds. I'll stick to the original topic, trusts of trusts. You want to use the two interchangeably when it is convienent for you to do so. To knock the one you just can't. And since you can't counter any of the data for the extras one gets by investing in the trusts of trusts for that extra fee. You just do not want to consider them in the discussion. But they are key because that is exactly what the extra "costs" are getting you. I gave an example of such using the real world data for an EIT unitholder in my last post. I see as all else can you just won't or can't dispute those numbers. If you can please feel free to take my numbers apart in that example of mine. That you haven't tells the whole story. YOU CAN"T. -------- 2. Why Rights are dilutive Right is issued to buy shares at $10 You give $10 to your broker who passes it on to Fund Company. They take the $10 and pay the cost of issuing rights and collecting money etc etc, lets say $0.50. The company now has $9.50 to invest. Original shares $10.00 New shares $ 9.50 (Assume 1:1 rights offer) Average value of shares (10+9.50/2) $9.75 ------ This is a prime example of you wanting to use the trusts of trusts and the fund of trusts interchangeably when it suits you. WHY? Because quite simply funds can't issue rights. Care to give an example of just one? --------- ------ Sorry but you do not understand rights at all. I have explained this before. Here it goes again. When a trust issues rights it usually has a conversion of in the of 4 rights + $X amount for one unit. When the rights are issued a unitholder will have been given 1 right for each unit held. When the rights begin to trade on the open market. The units will drop in price to account for the issue of rights as the rights will be trading on their own. So for the individual unitholder. Before the issue of the rights the units will have a value of $X. Immediately After the rights issue the unitholder will still have a value of $X. Its just now that value is $X = $Y + $Z. Where Y is the value of the units trading. And Z is the value of the rights trading. After this point trading in each goes its seperate ways. ------------------ 3. Can management add value on a fund: E.G. beat the index I wont tackle this topic, there have been books written on the subject, my belief is no, no on a continuos basis. ---------- I have not been talking about adding value. I have been talking about delivering to the unitholder time after time, right into his pocket. Delivering instant premium on conversion of the rights. Trading the rights on the open market making double to triple digit gains. You just don't want to consider that. Not to mention that the unitholder doesn't have to worry about what trust to buy and when to buy it and when to sell it. As one poster put it he sleeps better at night --------- I see a lot of advertising on Can eq funds, how they beat the index last year (and they did), they never say the reason that most of them did was because there are not allowed to have more than 10% of any one stock in their fund. NTel at one time was larger than 10% of the index and of course if you didn't hold too much NTel you did pretty good. Message 17584866

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