Central banks around the world have stepped in to prop up shaky financial markets in recent days, giving some comfort to investors. The subprime meltdown has wiped out huge amounts of equity, but the global economy remains in relatively good shape. The short-term infusion of capital has undoubtedly steadied markets, moral hazard be damned.

The question for many, and the answer to which may provide even more support during a period that’s absolutely tried investors’ souls, is when to step back in. Bargain hunters have to come to grips with how much volatility they want to suffer: Buy now, while the credit crunch is still on the squeeze, or wait until perhaps the fall, when bargains may not be so easy to come by.

Here’s a sector-by-sector look at the Canadian income trust universe, organized according to Canadian Edge How They Rate definitions. Some businesses are clearly more suited to weather tough times, while others are dealing with stock market uncertainty as well as fundamental issues. There are value plays below, and with the trusts, you also get the comfort of a monthly distribution check.

Oil and Gas: The energy patch rallied strongly into midsummer off the post-Halloween lows, but that momentum has been stymied by weak natural gas prices. Most–excluding only Canadian Oil Sands Trust–derive at least a portion of revenue from natural gas as well as oil; strong crude prices haven’t really been reflected in the share prices of the energy trusts.

The biggest and the best–Vermilion Energy Trust (53 straight monthly distributions of 17 cents Canadian per unit), for example–will be able to maintain payouts, but those trusts more leveraged to natural gas, such as Paramount Energy Trust (a 29 percent distribution cut in July), have had to adjust.

Electric Power: This group is less exposed to operating risk than the oil and gas trusts. And Algonquin Power Income Fund has gotten up off the deck ahead of most after the pummeling the global market has absorbed since July 19.

The hydroelectric/natural gas cogeneration/alternative fuels/infrastructure company has climbed steadily since Aug. 1 and is nearing pre-correction levels. Operating a solid business that continues to grow, Algonquin should also benefit from the drive to regulate carbon emissions: The vast majority of its facilities either emit no carbon dioxide or far less than coal-fired baseload capacity in North America.

Algonquin generates mostly carbon-neutral electric power and runs wastewater/drinking water treatment facilities; it has operating interests in 47 hydroelectric plants, two biomass plants, a municipal solid waste facility and three natural-gas fired stations. It also holds preferred dividend equity stakes in five other biomass and six natural gas plants that produce steady cash flows.

And it runs 17 water treatment plants in the US. That US presence will shield a good chunk of post-2011 cash flow from Canadian tax takers.

Gas/Propane: It’s difficult to imagine the Canadian natural gas drilling market getting much worse. But at this point, though not quite the mind-bender the first exercise is, it’s tough to see the recovery, too.

Precision Drilling turned in second quarter numbers that reflected depressed natural gas prices, but management has proven adept at keeping the balance sheet healthy and has positioned the company for a nice rebound once the market snaps back.

AltaGas Income Trust’s fee-generating assets–field gathering and processing, extraction and transmission, power generation and energy services—-provide a solid platform to grow, and S&P recently affirmed the trust’s credit rating. Still growing that asset base, AltaGas announced its fourth distribution hike since May 2004 along with its second quarter results.

Business Trusts: The global credit crunch is taking some of the speculative froth off the top of this part of the trust market, though most of the deals weren’t pushed through by private-equity muscle and its debt-centric modus operandi. Still, perception in the financial markets more than perhaps any other milieu rules, and trusts like Yellow Pages Income Fund may not carry the lofty share price numbers in the days and weeks ahead.

But this fear-based selloff will wind itself out, and those who own stable, cash-generating businesses like Yellow will have a couple distribution checks and the potential for capital appreciation as it continues its thus far successful transition to electronic media.

Real Estate Trusts: Canadian real estate investment trust (REIT) shares were softened up by rising US interest rates in early summer, but unlike US REITs, the Canadians are still prime beneficiaries of a burgeoning property market. The combination of weaker share prices and still-strong fundamentals has created another solid buying opportunity in the sector.

That’s particularly true for Northern Property REIT, RioCan REIT and Canadian Apartment REIT. Their yields aren’t as sexy as those of the energy trusts, but they’re set for solid cash flow and distribution growth for years to come.

Dominion Bond Rating Service has affirmed this positive thesis in placing RioCan’s debt on review with positive implications. Canada’s leading credit rater noted the REIT’s steady improvement in its “risk profile” with consistent property upgrades and improvements to its client list. It also cited below-market rents at properties and a solid development pipeline, pointing the way to cash flow-boosting higher rents and occupancy rates down the line.

Natural Resources Trusts: This is a diverse group–zinc, coal, timber, iron ore, trees. The yield isn’t as dazzling as others in the group, but TimberWest Forest Corp should be wholly immune from the coming tax on distributions.

The trust has held share growth down to a minimum, the payout ratio is within an acceptable range, and it’s come back to a reasonable share-price range after soaring during the early spring. TimberWest has some labor issues to sort through, but a basic business and a forward-looking management team have it well positioned up to and beyond 2011.

The Roundup

We’re nearing the end of the second quarter 2007 reporting period. Here’s the latest; look for updates on late filers next week.

Conservative Portfolio

Algonquin Power Income Fund (APF.UN, AGQNF) reported a CD2.3 million (3 cents Canadian per unit) loss for the second quarter, reversing the CD13.8 million (20 cents Canadian per unit) net earnings a year ago. The decrease is traceable to a CD27.9 million future tax expense, a one-time accounting charge required by the passage of the Tax Fairness Plan.

Revenue grew to CD50 million from CD47.1 million during the second quarter of 2006. The revenue boost came mostly from the acquisition of the St. Leon Wind Energy Facility and increased production at the Windsor Locks and Sanger facilities. Algonquin’s hydroelectric division operated at 100 percent of long-term averages.

Cash available for distribution was CD18.9 million (25 cents Canadian per unit), up from CD16 million (23 cents Canadian per unit) a year ago. Algonquin distributed 23 cents Canadian per unit during the recently concluded quarter, the same amount it paid a year ago.

Running its existing operations well and positioned to capitalize on the drive for carbon-neutral power generation, Algonquin Power Income Fund is a buy up to USD9.

Energy Savings Income Fund’s (SIF.UN, ESIUF) first quarter profit jumped 135 percent to CD25.9 million (24 cents Canadian per unit), up from CD11 million (10 cents Canadian per unit) a year ago, and the fund boosted its annual distribution by 4.5 cents Canadian per unit to CD1.21 per unit (10.083 cents Canadian per month) effective Sept. 30.

Sales for the three months ended June 30 were CD374.3 million, up from CD321.2 million. Energy Savings’ customer base grew 6 percent to 1.7 million; for the first time, the fund added more customers in the US than in Canada. Energy Savings Income Fund is a buy up to USD16.

Keyera Facilities Income Fund (KEY.UN, KEYUF) reported net earnings before tax and noncontrolling interest of CD21.6 million, up 44 percent from the second quarter of 2006. Keyera recorded a net loss of CD59.8 million for the quarter because of an CD80.2 million, noncash future income tax expense resulting from the enactment of the Canadian government’s tax on publicly traded income trusts starting in 2011.

Distributable cash flow was CD31.2 million (51 cents Canadian per unit), up 31 percent from a year ago. Distributions to unitholders totaled CD22.5 million (36.9 cents Canadian per unit) in the second quarter.

All business segments delivered strong second quarter results: Gathering and processing contributed CD15.4 million, up 14 percent year-over-year; natural gas liquids infrastructure generated CD11.2 million, up 26 percent; and marketing posted CD18.1 million, up 83 percent. Keyera declared CD22.5 million of distributions to unitholders on CD31.2 million (51 cents Canadian per unit) in distributable cash flow.

The decline in drilling activity in Western Canada hasn’t had a material impact on the raw gas volumes delivered to Keyera’s facilities for processing; throughput volumes at most Keyera plants increased compared to the first quarter of 2007, the result of producer drilling undertaken in previous years. Lower activity levels may affect the volume of raw gas delivered to Keyera’s gathering and processing facilities in the future.

As of Jan. 1, 2007, Keyera had approximately CD385 million of unutilized tax pools and deductions. Keyera plans to reduce the use of its available tax deductions in the years 2007-10, thereby increasing deductions available for the years after 2010. Keyera Facilities Income Fund is a buy up to USD19.

Macquarie Power & Infrastructure Income Fund (MPT.UN, MCQPF) reported revenue for the second quarter of CD21.6 million, up from CD16.3 million a year ago. Income from operations was CD2.4 million for the quarter, compared with a loss of CD1.3 million for the second quarter of 2006.

Distributable cash was CD7.3 million (23.7 cents Canadian per unit), up from CD6.3 million (21 cents Canadian per unit) a year ago. Declared distributions to unitholders for the quarter were CD9.5 million (25.7 cents Canadian per unit), compared to CD7.5 million (25 cents Canadian per unit) a year ago. Macquarie’s reported payout ratio for the quarter was 129 percent, up from 119 percent for the same period a year ago.

Macquarie’s future income tax expense in the second quarter includes a one-time charge of CD44 million related to passage of the Tax Fairness Plan. This noncash charge represents the tax effect of the difference in the tax and accounting values of the fund’s assets and doesn’t affect distributable cash.

As of June 30, 2007, the fund had working capital of CD33 million, an uncommitted cash balance of CD22.8 million and fully funded general, major maintenance and capital expenditure reserve accounts. Macquarie Power & Infrastructure Income Fund is a buy up to USD12.

Yellow Pages Income Fund (YLO.UN, YLWPF) posted a CD127.6 million (24 cents Canadian per unit) second quarter profit, up from CD114.2 million (23 cents Canadian per unit) a year ago. Revenue increased 21 percent to CD411.1 million, up from CD340.3 million.

Distributable cash grew by 18.5 percent to CD177.3 million, up 10 percent on a per-unit basis to 33 cents Canadian per unit from 30 cents Canadian in the second quarter of 2006. Organic growth in the directory business, both print and online, drove Yellow’s performance.

Directories adjusted revenues increased by 5.1 percent, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 6.6 percent. Adjusted EBITDA margin reached 58.8 percent for the quarter.

Yellow completed the purchase of Aliant Directory Services in Atlantic Canada. On the vertical media side of the business, Trader Corp generated revenues of CD90.7 million, growing 5.1 percent; EBITDA grew by 12.3 percent to CD30 million. Migrating well from print to electronic media, Yellow Pages Income Fund is a solid buy up to USD15.

Aggressive Portfolio

Paramount Energy Trust’s (PMT.UN, PMGYF) profit fell 72 percent to CD6.1 million (7 cents Canadian per unit) from CD21.8 million (26 cents Canadian per unit) on lower natural gas prices. Paramount announced a 29 percent distribution cut in July to 10 cents Canadian per unit per month.

Strong production levels in the quarter and realized hedging gains led to a 28 percent increase in funds flow from operations to CD72.7 million from CD56.6 million a year ago. The hedging program contributed to funds flow per unit of 81 cents Canadian, up from 68 cents Canadian per unit during the second quarter of 2006.

Paramount took advantage of short-term weakness in natural gas markets to realize early termination gains on its hedging and physical forward sales portfolio, recording CD19.6 million of realized gains on financial instruments during the quarter, of which CD18.6 million related to the early termination of certain financial instruments for the summer 2007, winter 2007-08 and summer 2008 terms.

Production averaged 155 million cubic feet equivalent per day (MMcfe/d) for the period, down from 162.9 MMcfe/d in the second quarter of 2006. Distributions totaled 42 cents Canadian per unit during the quarter. Paramount Energy Trust is a buy up to USD13.

Peyto Energy Trust (PEY.UN, PEYUF) reported net income was CD38.8 million (37 cents Canadian per unit) in the second quarter, down from CD56.7 million (54 cents Canadian per unit) a year ago. Production decreased 10 percent to 20,509 barrels of oil equivalent per day (boe/d) from 22,892 boe/d during the second quarter of 2006.

Revenue for the period was CD100.8 million, down 6 percent from CD106.8 million. Funds from operations (FFO) were CD69.3 million (66 cents Canadian per unit), down 11 percent from CD77.5 million (74 cents Canadian per unit).

Peyto paid total distributions of CD44.4 million, even on a per-unit basis (42 cents Canadian) with second quarter 2006 levels. The payout ratio for the second quarter of 2007 was 64 percent of FFO, up from 57 percent a year ago.

Operating costs were CD2.70 per barrels of oil equivalent (boe) for the quarter, up 19 percent from CD2.26 per boe a year ago. Peyto reported a reserve life of 14 years on a proved basis, 20 years on a proved plus probable basis.

The trust’s debt-to-FFO ratio was 1.5 as of June 30. Net debt decreased CD12 million from the first quarter of 2007 to CD415 million.

Peyto spent CD12.9 million during the quarter in finding and developing new natural gas reserves, an 81 percent reduction in capital expenditures from the second quarter of 2006. Boasting a low-cost profile and one of the most transparent capital structures in the industry, Peyto Energy Trust is a buy up to USD22.

Provident Energy Trust (PVE.UN, NYSE: PVX) recorded a net loss for the second quarter of CD41 (19 cents Canadian per unit), largely on the weight of a CD125.2 million future income tax charge related to the passage of the 2007 Canadian federal budget, which includes the tax on trust beginning in 2011. This future income tax expense doesn’t affect cash flow before 2011.

Earnings were positively impacted by a noncash dilution gain of CD98.6 million and related future income tax expense of CD40.2 million associated with Provident’s stake in BreitBurn Energy Partners, a US master limited partnership (MLP).

The trust reported second quarter 2007 FFO of CD105.7 million (49 cents Canadian per unit), down from CD111 million (58 cents Canadian per unit) a year ago. Year to date, the trust has generated FFO of CD202.8, up from CD189.9.

Lower second quarter 2007 FFO was caused by lower realized crude oil prices, a stronger Canadian dollar and increased general and administrative costs, which offset increased upstream production and higher midstream sales volumes.

Distributions totaled CD80.2 million, even on a per-unit basis (36 cents Canadian) with year-ago levels. Provident’s payout ratio of FFO was 79 percent, up from 62 percent for the second quarter of 2006.

Crude oil and natural gas production increased 13 percent to 34,900 boe/d from 30,800 boe/d in the second quarter of 2006. The production was weighted 46 percent natural gas, 48 percent light/medium oil and natural gas liquids (NGLs), and 6 percent heavy oils.

Midstream NGL sales volumes increased 9 percent in the quarter to 110,000 barrels per day (bpd) compared to 100,000 bpd in the second quarter of 2006. Growing its midstream business and increasing its focus south of the border–away from the 2011 tax–Provident Energy Trust is a buy up to USD14.

Trinidad Energy Services Income Trust (TDG.UN, TDGNF), squeezed by reduced drilling activity in the Canadian oil patch and currency losses, reported earnings of CD4.6 million (6 cents Canadian per unit) for the second quarter, down from CD20.8 million (25 cents Canadian per unit) for the same period last year. Revenues rose to CD115.5 million from CD104.5 million on acquisitions.

FFO was relatively stable at CD93.2 million year-to-date and increased slightly on a quarterly basis by CD800,000. EBITDA were CD26.6 million (31 cents Canadian per unit), flat with the CD26.2 million (30 cents Canadian per unit) of a year ago.

The rising Canadian dollar brought currency losses to CD5.6 million from CD1.3 million a year ago. FFO were CD23.4 million (27 cents Canadian per unit) up slightly from CD22.5 million (26 cents Canadian) in the second quarter of 2006. The trust paid CD28.8 million (34 cents Canadian per unit) in distributions, up from CD26.8 million (32 cents Canadian per unit) a year ago.

Trinidad’s payout ratio for the first six months of 2007 stood at 60 percent, up from 52 percent for the same period of 2006. Industry utilization rates declined by 71.2 percent from the first quarter of 2007, reducing utilization to 17 percent for the three months ended June 30, 2007, and 38 percent year-to-date.

Canadian drilling operations were impacted, but Trinidad’s focus on the deeper drilling market and long-term contracts did shelter operations from the full reduction experienced in the drilling market, allowing Trinidad to continue to exceed industry utilization by 17.6 percent for the quarter and 15.8 percent year-to-date.

Reduced day rates and declining activity led to a 37.4 percent quarter-over-quarter decline in revenue to CD31.3 million from CD49.9 million a year ago. US drilling operations generated an 88.9 percent revenue increase to CD73.4 million from CD38.8 million a year ago and continue to stabilize Trinidad’s funds flow. Buy Trinidad Energy Services Trust up to USD18.

Vermilion Energy Trust (VET.UN, VETMF) reported second quarter net income of CD41 million, up from CD40.4 million a year ago on a 6.3 percent production increase. Output averaged 30,916 boe/d (55 percent oil), up from 29,090 boe/d; increased volumes from Australia, France and Canada offset declines in the Netherlands.

Vermilion has about 40 percent of its production in Canada. FFO were CD85.1 million (CD1.18 per unit), up 11 percent from CD76.8 million (CD1.10 per unit) in the second quarter of 2006.

The trust paid CD33.7 million (51 cents Canadian per unit) to unitholders during the second quarter, roughly 40 percent of cash flow. Vermilion has maintained its distribution at 17 cents Canadian per unit per month since its conversion to a trust, making 53 such payments in a row. The total payout ratio was 67 percent of FFO.

Vermilion’s net debt at the end of the second quarter increased by CD100 million to approximately CD446 million, 1.3 times annualized second quarter cash flow. Revenue for the second quarter was CD164.9 million, up from CD147.8 million a year ago.

Operating costs increased to CD9.91 in the quarter, up from CD9.25 a year ago. General and administration expenses increased to CD1.69 per boe in the quarter from CD1.66 a year ago.

Vermilion has stated that it may be able to mitigate the impact of the 2011 tax on trust distributions because its foreign operations generate after-tax cash flow and subsequently declare and pay dividends that don’t attract additional taxes when received in Canada. Vermilion anticipates being able to flow through this dividend income to unitholders as part of the normal distributions paid and not to attract the distribution tax on that portion of distributions made up of this dividend income.

Vermilion has also increased the return on capital, or taxable, portion of its distribution for 2006 to 100 percent in order to preserve the tax basis it would have utilized to declare a portion of the 2006 distribution as a return of capital, or tax deferred. The trust expects to continue with this practice through 2010 to preserve the tax basis during the interim period prior to the implementation of the new rules.

Beginning in 2011, that portion of the distribution that represents return of capital won’t be subject to the distribution tax. Geographically diverse and operationally sound, Vermilion Energy Trust is a long-term buy up to USD36.