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Trusts($TRSTS) > Forum $TRSTS > SDT.un....need some advice View modes: 
  • SDT.un....need some advice

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    I have been trading some stocks and made some good cash (put on the sidelines) however its required alot of work sitting at the computer. The weather is getting nice...so.....

    My broker who has the majority of my investments has a few thousand shares of SDT.un. along with many other trusts including BCE...some of which was sold. Many here have decided to buy more SDT.un. I am wondering "WHY" and is it for the longer hold through the summer?. So I am thinking why not put my cash into SDT.UN instead of trading esp. over May and into Sept and leave the computer. This would be my reason as it seems to be a safe thing to do. Now I would like to here of other good reasons why or why not. THanks in advance....the skier.
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  • RE: SDT.un....need some advice

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    3ed
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    Your decision to invest in SDT.un will probably depend on your view of the trust market going forward. I am heavily invested in SDT.un and EIT.un. A second factor is that both funds have been trading at a market discount to NAV that is at a greater discount then the market would usually allow prior to October 31st 2006. A discount of -10% was about the max and that was associated with extraordinary events like a rights issue. Both Eit and SDT decreased their discount in the market this week to -11% and EIT had been at -14% and even -15%. Factors affecting the discount like investors having fled to greener pastures are not possible to predict but I think discounts of -5% or-6% are a maybe in 2007. All these words to say that the discount to NAV might decrease in a rising market as an added bonus. EWI.un which I do not own is at -5.40% and others like SIN.un are even lower. CTD.un at -13.59% is looking interesting. I bought back into SEF.un this week at $8.81 because of the rising market but the discount was almost unprecedented at maybe 18%. I just forget the exact figure. I think it was B42 who raised the high discount flag here.
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  • RE: SDT.un....need some advice

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    First question to consider might be why "churn", you have a full service broker so proably better to avoid paying a lot of high commissions here for no very good reason. For do-it-yourself, the new $10 commissions help a great deal in making small adjustments to individual selections, and something like your proposal could make more sense. If your broker has you in say Enterra (I'm trying to think of an especially doggy trust) because say Cramer mentioned it, that's one thing, you should get second opinions, but presumably you have some confidence and can leave the situation for awhile in capable hands. Depends on what portfolio percentage the SDT is now; not much use having just a bit as there is already diversification within it.

    Some of us like SDT especially partly because we feel we need some demonstrated management smarts especially here, so it is preferable to some low-MER combination like
    T.XTR (large caps, so large weight in energy royalty trusts) plus
    BTH.UN (equal dollar weighting of the 100 largest income trusts, http://www.bromptongroup.com/funds/bth/portfolio/ )

    But the payout amounts might tend to lag the news, based on results from some time back, and so on, lots of little details that could be thought about. It was the opposite awhile back, some thought the 2006 payouts based on earlier realized gains was set. On the other hand, EIT payouts have been frozen as to 7 cents per month, giving some instability of unit price prospects.

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