actively managed mutual fund, or through a passive exchange traded fund (ETF). It is important to note that with ETFs – such as the iShares REIT ETF – companies are ranked by size, and as such, the ETF’s heaviest weighting is in Canada’s largest REIT, RIOCAN, which is a retail REIT. Perhaps this 25 per cent weighting is un-justified for most portfolios, given Cana-dians have altered their spending habits. THE BENEFITS OF A REIT The number one thing REITs provide is very tax-efficient, monthly income with the opportunity for income growth. A portion of the income may represent a repayment of the principal investment with most of the income being classified as return of capital, which is generally not taxed when the investor receives it. Rather, a return of capital reduces the in-vestor’s cost base and is taxed as a capital gain (i.e., only 50 per cent is included as income) when the investment is ulti-mately sold. This benefit provides both tax efficiency and tax deferral. With a diversified REIT portfolio, investors gain a number of significant advantages. Beyond the opportunity for capital appreciation, REITs offer a much higher degree of liquidity than tradi-tional real estate as they trade on major stock exchanges. Also, REITs are cur-rently yielding between four per cent and 11 per cent per annum. For example, a $100,000 investment in a diversified basket of REITs yielding seven per cent will generate income of $7,000 annually. REITs stand to benefit from an aging population, as the leading edge of baby boomers is 64 years of age this year and they are keen to replace lost employment income with income earned from their in-vestment portfolio. Further, many experts predict REITs will benefit from the demise of income trusts at the end of this year as many income trusts are forced to cut their distributions when they convert back to corporations. REITs are exempt from this tax change. As such, well-managed REITs could be a huge beneficiary as large inflows of cash support this sector even further. rise dramatically at the precise time they needed to access capital. This was not the case in Canada. Ca-nadian lenders are inherently less willing to take risks and did not rely on securi-tization as their main source of capital. Canadian REITs also have long estab-lished relationships with lenders in this country. CANADIAN REITs AND RETIREMENT INCOME PLANNING Income seeking investors facing the real-ity of shortfalls in their retirement income planning should consider the importance of a REIT segment in their portfolio. As REITs provide tax-efficient, monthly income with the opportunity for income growth. THE CANADIAN MODEL The Canadian model is very different from U.S. REITs in a number of ways. Most notably, the U.S. real estate market relied heavily on securitized mortgages to fund their source of capital. Securiti-zation is the process whereby a lender packages loans as assets and sells them to investors. U.S. lenders had minimal di-rect exposure to any bad loans, and, be-ing extremely lucrative, they continued to make dubious loans. When the secu-ritization market screeched to a halt in 2008, U.S. REITs saw their cost of capital all investment decisions pose an element of risk, and past performance does not guarantee future returns, it is best to seek professional advice to ensure the right fit for your portfolio. • The views in this article are solely the work of the author, and not necessarily those of Canaccord. The information herein is drawn from sources believed to be reliable, but its ac-curacy and completeness is not guaranteed, nor in providing it does the author or Canac-cord assume any liability. At time of publica-tion, the author currently owns REITs. MOST POPULAR SPIDER SHAPES NOW CONVENIENTLY PRE-CUT SpiderTech’s Pre-Cut Kinesiology Tape is now being offered in X, Y and I shapes, making it easy for practitioners to achieve superior clinical outcomes. SpiderTech, which provides specialized kinesiology taping products to naturally re-duce pain and restore strength and mobil-ity to injured and sore muscles, announces its new X, Y and I pre-cut Spiders, three of the most common shapes utilized by health-care providers. Chiropractors and other practitioners who use kinesiology tape now have a more convenient and time-saving way to ap-ply the tape to patients coping with sports injuries, knee pain, back pain and other ailments. “When we initially launched our advanced pre-cut Spiders in 16 different shapes, they were met with an enthusiastic re-sponse among many practitioners,” said SpiderTech’s Chief Medical Officer Dr. Kevin Jardine, DC, Med.Ac, CSCS, ART, CSTI. “The X, Y, and I shapes are the next logical step, with the benefit of application right out of the box without having to cut patterns.” SpiderTech has revolutionized kinesiology tape-based ther-30 • CANADIAN CHIROPRACTOR | OCTOBER 2010 apy by introducing its pre-cut product line complemented with the education and support that make up a complete system of therapy. The newest additions to the pre-cut line, the X, Y and I spiders make it easy for doctors who have used these common Spider shapes on their patients for the past three decades for injuries and discomfort affecting the knee, lower back, neck and shoulder. SpiderTech is the only kinesiology tape available in pre-cut shapes. In addition to X, Y, and I, 16 different shapes are available to chiropractors, ranging from the “Hip Spider” to the “Upper Knee Spider,” the “Shoulder Spider,” and the “Hamstring Spider.” The tape, made with hypoallergenic acrylic glue, is manufactured to be the same weight, thickness and elasticity as the skin and is therefore able to integrate with the body’s nervous system naturally. The company has just begun shipping SpiderTech’s new pre-shaped products. X and Y Spiders are packaged in a box of 40. I Spiders are packaged in a box of 100. Visit www.SpiderTech.com for more information or www. nucapmedical.com/pc/selectCountry.asp to place an order. • www.canadianchiropractor.ca new product
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