Hi Jay,
Over 40 new trusts have been listed on the Toronto stockmarket in the past two years, bringing the total to 116, with a combined market capitalisation of C$52.6 billion ($38 billion), 5% of the value of all listed shares.
Not to cause you further worry, but as the sheer number of unit trusts increase, and as the assets under management increase, the availability of worthwhile and quality investments underlying the various trusts decreases, or is spread very thinly over the entire group. To put the increased assets to work means that the trust managers are forced into second and third tier quality vehicles, investments they would not normally approve of under more "rational" conditions.
Although the author of the article you quoted didn't use the term, I think it's safe to say that today there is a mini-bubble of sorts within the trusts. As you well know, bubbles, even mini-bubbles, eventually burst, usually with undesirable results for those still holding when the big bang is heard...
KJC |
