The future of Canadian income trusts is positive, according to the managers of GGOF Monthly High Income Fund. As the first year anniversary of the “Trust Fairness” announcement approaches, John Priestman, Kevin Hall and Michele Robitaille believe there are three key indicators to support their optimistic outlook:

1. Current valuations of income trusts largely reflect the impact of future taxation, as evident by the 18% underperformance of the S&P/TSX Income Trust index versus the S&P/TSX composite index since the trust tax announcement on October 31, 2006.

2. Demand for tax-effective income is growing steadily. According to a recent GGOF/Ipsos Reid survey, 70% of baby boomers plan to use money from investments to pay for retirement. Yet as boomers prepare to retire, the supply of high quality income options like fixed income securities, common shares and preferred shares, is contracting.

3. Most trusts will morph into high yielding, dividend paying corporations, but not until they have to. However, regardless of whether trusts convert into a corporation or retain their current structures, companies with capable management teams, solid business propositions and strong operating platforms will continue to grow and prosper through 2011 and beyond.