Sentry Select guards against pessimism

Canadian income trusts have taken a knock following a government decision to end the structure's tax benefits. But Sentry Select reckons increased volatility is unlikely to scare investors away from structured products linked to income trusts. By Amanda Lee

Jim Flaherty, Canada's federal finance minister, announced at the end of October 2006 that income trusts would be levied with a distribution tax. And the news sent shockwaves throughout the country's financial markets.

The income trust structure has allowed companies to pay out a large chunk of their operating income to shareholders. By converting to an income trust, a company in essence transfers a substantial proportion of its tax liability to its unit holders. An income trust is essentially an