Frequently Asked Questions
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Investors buy units in a trust, which are like shares of a corporation that pays dividends. Unit-holders are entitled to be paid amounts that are indirectly based on the pre-tax profit of the underlying business. Unlike bonds, income trusts offer no assured return of either your original investment or of any monthly return on that investment.
Income trusts, like equities, tend to offer more attractive yields than bonds but with more risk. The risks of investing in an income trust are similar to those involved in owning any equity investment in a business. Income trusts were designed for businesses with a stable, mature cash flow. Investors should read the income trust's prospectus, understand the underlying business and focus on the potential risks as well as the possible rewards. |
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