Future of Canadian Income Trusts is Positive Says GGOF



    At the one year anniversary of the trust taxation announcement, income
    trust valuations now reflect any discounts associated with future
    taxation

    TORONTO, Oct. 25 /CNW/ - As the first year anniversary of the "Trust
Fairness" announcement approaches, the GGOF Monthly High Income Fund
management team believes the future of Canadian income trusts is positive.
According to John Priestman, Kevin Hall and Michele Robitaille, 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 per cent 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 (to September
        30, 2007).

    2.  Demand for tax-effective income is growing steadily. According to a
        recent GGOF/Ipsos Reid survey, 70 per cent 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.

    The GGOF Monthly High Income Fund management team are available to discuss
the current state and future prospects of the income trust market, including:

    -   Will income trusts have the capability to sustain their current
        distributions post the 2011 tax hit?

    -   Why is there a 25 per cent performance differential between the
        S&P/TSX Income Trust Index and S&P/TSX Composite Index since last
        year's announcement?

    -   Are there "good trusts" and "bad trusts" and how can investors tell
        the difference? What matters most when analyzing and valuating a
        trust?

    -   What should investors expect over the next three years and beyond? An
        outlook on the evolution of the income trust market.

    -   Why should investors consider investing in income trusts; what are
        the income-generating options available?

    -   A review of the takeover activity: Some 32 deals have closed since
        Halloween 2006, and 14 more are pending. What are the key takeovers
        and what do they mean for the income trust market?
    





For further information:

For further information: JoAnne Hayes, Toronto, joanne.hayes@bmo.com,
(416) 867-3996; Lucie Gosselin, Montreal, lucie.gosselin@bmo.com, (514)
877-8224; Laurie Grant, Vancouver, laurie.grant@bmo.com, (604) 665-7596;
Internet: www.ggof.com

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