It’s been an up and down year for income stocks and trusts in 2022. The indexes have returned mixed results, but our recommended income stocks and trusts have seen a total return of 6.5 per cent. Let’s take a look at the categories and individual plays that made up the year.
Review of income stocks and trusts
Oil and Gas
Oil and gas stocks were the top performers, with a total return of 66.1 per cent. Enerplus Corp. (TSX—ERF; NYSE—ERF) performed the best of all, with a total return of 86.3 per cent. The strong performances were attributed to buoyant commodity prices.
Pipelines and midstream
These were the second-best performers, ending the year with an 8.3 per cent return. Pembina Pipeline Corp.’s (TSX—PPL; NYSE—PBA) total return was 25.3 per cent, but AltaGas Ltd. (TSX—ALA) detracted from the performance with an 8.7 per cent loss.
Business trusts
Business trusts saw a 5.5 per cent return and were led by Chemtrade Logistics Income Fund (TSX—CHE.UN), who profited from favorable end-markets.
Income funds
These funds, on the other hand, suffered a 6.6 per cent loss. Blue Ribbon Income Fund (TSX—RBN.UN) was down 4.6 per cent, and Purpose Multi-Asset Income Fund (TSX—PINC) lost 8.6 per cent.
Power generation stocks
Power generation stocks were second-last, with an average loss of eight per cent. Algonquin Power & Utilities Corp. (TSX—AQN; NYSE—AQN) was a big contributor to this, while Boralex Inc. (TSX—BLX) and Northland Power Inc. (TSX—NPI) delivered respectable performances.
REITs
The worst-performing category were REITs, who lost an average 17.3 per cent. This was attributed to central banks’ tightening of monetary policies, as well as higher bond yields making bonds more competitive than REITs.
Overall, it’s been a challenging year for income stocks and trusts, but there were still some bright spots. As investors, it’s important to be mindful of the market and take advantage of opportunities when they arise.
This is an edited version of an article that was originally published for subscribers in the January 6, 2023 issue of Money Reporter. You can profit from the award-winning advice subscribers receive regularly in Money Reporter.
Money Reporter, MPL Communications Inc.
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Money Reporter •5/9/23 •