In response to increased interest from investors, the Ontario Securities Commission has launched a new web-based information piece to help investors understand income funds, also called income trusts.

The Ins and Outs of Income Funds discusses income fund risk and return, and lists the factors that may affect the risk profiles of individual income funds.

The piece also covers income fund structure and background, and why companies may choose to offer securities by way of income fund offerings rather than via traditional initial public offerings.

“Interest in income funds has exploded over the past year, and we feel it is important for investors to have information about this investment product,” said Perry Quinton, manager, investor communications at the OSC.

The Ins and Outs of Income Funds suggests investors do their research on these sophisticated products, and read the public disclosure documents before they invest.

“The popularity of income funds has increased with the availability of specialty income funds; investors can now choose from funds based on a range of businesses from pet food to restaurant chains,” said Quinton. “Investors need to look very carefully at the underlying business of income funds, because they are relying on that business to provide consistent investment returns.”

Investors can read The Ins and Outs of Income Funds on www.investorED.ca, the new Investor e.ducation Fund Web site.

The site is dedicated to providing investors with objective financial information that assists them with making informed investment decisions.