COMPASS Income Fund invests in a diversified portfolio
comprised primarily of equity income securities.
Over several decades, dividends have benefited investors by
accounting for approximately two-thirds of total equity returns and dampening
the volatility associated with investing in equities. In addition, dividends
from Canadian corporations have become increasingly tax efficient and are now
taxed at a lower rate than interest income. We continue to believe that
companies offering high levels of sustainable income will attract significant
investor interest and receive premium valuations, especially within an
environment of relatively low interest rates and a Canadian market with few
alternatives for investors seeking yield.
Virtually all income trusts, including oil and gas royalty
trusts, have converted to dividend-paying corporations. We believe many of them
are well positioned to pay out relatively high and stable levels of income,
primarily in the form of tax-efficient dividends.