Income is an investment area which is near and dear to many of our clients and this week our focus is on Income Trusts and specifically the top 7 Relative Strength Income Trusts from SIA´s S&P/TSX Capped Income Trust Report.  SIA recently completed an analysis on the impact of utilizing relative strength in a scalable, repeatable investment strategy.  Starting on June 1, 2009 we selected the top 10 names from the Income Trust Report, bought an equal allocation of the top 10 and then rebalanced monthly.  Using this simple approach the model income portfolio has risen over 54% including distributions.  By comparison, over the same period the iShares S&P/TSX Income Trust ETF has increased by 29% including distribution.  This is why we believe focusing on strong relative strength names makes a significant difference when making investment decisions.

The top relative strength name in the report is Dundee Reit.  It has been in the favored zone for over a year and since that time its price has more than doubled.  Currently it is building a bullish consolidation at recent highs and a breakout from this pattern through $25.76 suggests a move to the $28.44 level.

Peyto Energy Trust (PEY.UN.TO)

Peyto is a name we have written about recently because it has appeared in the favored zone of a number of reports including the S&P/TSX Capped Energy, Completion and Small Cap Reports.  Currently it sits in position 4 on the S&P/TSX Capped Income Trust Report and has been favored since June of this year.  It is building a bullish pattern at recent highs and a breakout through $16.04 suggests a move to the mid $17s as it tests 2008 resistance levels.  Solid support sits from $13.43 to $14.24.  This is another name which investors should consider.

Peyto Energy Trust (the Trust) is a Canada-based energy trust. The Trust is engaged in the development and production of natural gas in Alberta’s in deep basin. As of December 31, 2009, the total proved plus probable reserves were 1,199.3 billion cubic feet equivalent. Production is weighted approximately 85% natural gas and 15% natural gas liquids and oil. Its subsidiaries include Peyto Exploration & Development Corp., Peyto Operating Trust, Peyto Energy Limited Partnership and Peyto Energy Administration Corp.

Keyera Facilities Income Trust (KEY.UN.TO)

Keyera first joined the Favored zone of the Income Trust Report in  late November of 2009.  Outside ofa few days in the Neutral (Yellow) zone in January KEY.UN has been a stellar participant of the Income Trust universe.  The current chart shows us that Keyera has moved above resistance at $27.72 and is moving up to test the $30.60 level.  Support for Keyera is at $26.64 and $25.11.

Keyera Facilities Income Fund (the Fund) is an open-ended trust that operates natural gas midstream businesses in Canada. The Fund has a 100% direct and indirect interest in Keyera Energy Limited Partnership (the Partnership). The Partnership is involved in the business of natural gas gathering and processing, as well as natural gas liquids (NGLs) and crude oil processing, transportation, storage and marketing in Canada and the United States. The Fund’s operations are conducted through three business segments. The Gathering and Processing segment includes natural gas gathering and processing. The NGL Infrastructure segment includes NGL and crude oil processing, transportation and storage. The Marketing segment consists of marketing NGLs, natural gas, sulphur and crude oil. The Fund has interests in 15 gas plants in western Canada, with 1,916 million standard cubic feet per day (MMcf/d) of licensed gross raw gas processing capacity, 1,689 MMcf/d net to the Fund.

Primaris Retail REIT (PMZ.UN.TO)

Primaris moved back into the Favored zone of the TSX Capped Income Trust Report in early May and since then has taken out resistance at $17.84 and is now moving up for its next test at $20.09.  PMZ.UN has support at $17.14 and $15.84.  Those looking for a REIT for their portfolio should consider this one.

Primaris Retail Real Estate Investment Trust (Primaris) is an unincorporated, real estate investment trust (REIT). Primaris was formed to own, manage, lease and develop retail properties, primarily in Canada. These properties are mid-market retail centers in cities or retail centers in secondary cities. In December 2009, Primaris acquired Sunridge Mall in Calgary, Alberta and a 50% interest in Woodgrove Centre, Nanaimo, British Columbia. In April 2009, Primaris acquired a property in Toronto, Ontario. In February 2008, it also acquired a property in Toronto, Ontario. In October 2008, Primaris acquired a property in Kelowna, British Columbia. In November 2008, Primaris acquired a property in Toronto, Ontario. Primaris is managed by OPGI Management Limited Partnership.

Baytex Energy Trust (BTE.UN.TO)

Baytex Energy has been within the Favored zone of the TSX Capped Income Trust Report for more than 12 months and over that time has given investors a very positive return.  Looking at the chart today we can see that resistance at its April highs is approaching with a move above suggesting room to move into the $40 range.  The first sign of trouble on the chart is a close below $31.46.

Baytex Energy Trust (Baytex) is an open-ended investment trust. Through its subsidiaries, Baytex is engaged in the exploration, development and production of oil, natural gas and natural gas liquids in Canada in the provinces of British Columbia, Alberta and Saskatchewan and in the United States in the states of North Dakota and Wyoming. Baytex has reserve base of 197 million barrel of oil equivalent (boe) on a proved plus probable basis. Baytex´s crude oil and natural gas operations are organized into three operating districts: the Heavy Oil Business Unit, the Conventional Oil and Gas Business Unit, and the United States Business Unit. During the year ended December 31, 2009, its production averaged 41,382 barrel of oil equivalent per day (boe/d), primarily from Canada. On July 30, 2009, Baytex acquired oil and natural gas properties located primarily in the Kerrobert and Coleville areas of Saskatchewan, producing approximately 3,000 boe/d.