iTrustReport - iTrustRatings

OVERVIEW

iTrustRatings can provide an easy way to pre-screen investments for current quality and a track record of Canadian income trust and fund performance.

Complimentary to other sources of information and other decision factors, these Ratings can provide a time-saving and effective indicator of potential value for investors, advisors, sellers, traders and fund managers.

The iTrustRatings scheme involves specific measures of income trusts and funds in two ways:

7*Star iTrustRatings provide a set of potentially positive indicators for income trusts and funds.

Cashflow Cautions are in addition to the 7*Star Ratings and use a a black mark to indicate Risk in so far as a trust or fund has experienced difficulties or is currently experiencing challenges in cashflow management.

At a minimum, therefore, iTrustRatings can help investors and advisors raise questions and preview basic securities information regarding potential returns and risks of investment in income trusts and funds.

The iTrustRatings might provide a basic starting point for informed conversation by investors with their advisors or brokers when discussing inclusion of trusts or funds of funds in a portfolio.

An opening question for a salesperson or advisor might be as simple as, "If you're recommending that I put money into this trust or fund, can you tell me its iTrustRating and whether there is any Risk or Cashflow Caution?"

7 * STAR RATINGS

Trusts or funds are given one Star if they have been trading in the market for a year or more. One year of trading ensures that investors can see financial reports from trustees for the security.

Stars are, however, attributed for other points of potentially positive distinction such as earnings, trends in distribution, market liquidity, annualized returns relative and other fundamental considerations among many.

For example, a trust issued by a company known as a market leader prior to conversion into a trust or a trust issue by a company supplying services in a sector where demand generally exceeds supply, can carry a Star despite trading for less than a year.

There are 0-7 Stars awarded in the iTrustRatings, based on an assessment done regularly, but periodically using public information:

7-Star issues are described as "All*Stars".

5- or 6-Stars issues are called "Star" or "Star Income" trusts.

Other 0-4 Star trusts might do well for investors in any case. But those trusts do not offer the same distinct qualities or information for evalution offered by trusts or funds with a Star rating, or more than one Star.

All*Star and Star trusts might hold merit for initial consideration by investors.

CASHFLOW CAUTIONS

Cashflow challenges include circumstances that either have or could yet hurt returns for investors.

Cautionary indicators represented by the mark would include, for example, either a net negative trend in cash distributions over the last few changes in distributions and/or managers' reports or independent calculations to show that the trustee is distributing more than 100% of their available operating cash flow to investors.

Regardless of the number of Stars attributed to a trust or fund (0 - 7 Stars), it may also be given a black mark to show that it is a Risk as an investment in terms of there being a Cashflow Caution related to the issue.

All*Star issues with 7 Stars do not seem to carry any Cashflow Cautions. Star income issues with 5 or 6 Stars might carry a cashflow caution as well, if an issue is recovering from a past problem. Other trusts with 0-4 Stars in their iTrustRating and that carry a Cashflow Caution are listed in the Risk category.

Factors related to Stars for specific trusts and funds are described as part of the information access provided to iTrustReport subscribers.

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