Energy Trust

A A A

DEFINITION

A type of corporation which exists solely to hold oil and gas mineral rights. Energy trusts pay out the lion's share of the profits they collect to their investors. Energy trusts are advantageous because they are exempt from corporate taxation if they distribute more than 90% of their earnings to investors. In this way, energy trusts are similar to the better known real estate investment trusts (REITs).

INVESTOPEDIA EXPLAINS

Energy trusts differ slightly between Canada and the United States. Canadian energy trusts are able to add new mineral properties to the trust, thus providing for an indefinite life as an actively managed mineral investment fund. U.S. energy trusts may not acquire new properties, and thus are born with a fixed quantity of reserve assets which decline gradually as the minerals are mined and sold. Eventually, U.S. energy trusts run out of mineral assets and become worthless.


RELATED TERMS
  1. Wholesale Energy

    A term referring to the purchase and sale of energy products – primarily electricity, ...
  2. Energy Sector

    A category of stocks that relate to producing or supplying energy. This sector ...
  3. Energy ETF

    A broad class of ETFs that includes funds focused on oil and gas exploration; ...
  4. Oil ETF

    A category of exchange-traded funds that invest in companies engaged in oil ...
  5. Alternative Energy ETF

    An exchange-traded fund that invests in companies engaged in industries serving ...
  6. Green collar

    A worker who is employed in an industry in the environmental sector of the economy, ...
  7. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that follows the name ...
  8. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," which ...
  9. AG (Aktiengesellschaft)

    AG is an abbreviation of Aktiengesellschaft, which is a German term for a public ...
  10. GmbH

    GmbH is an abbreviation of the German phrase Gesellschaft mit beschränkter ...
Related Articles
  1. Peak Oil: What To Do When The Wells ...
    Economics

    Peak Oil: What To Do When The Wells ...

  2. Uncovering Oil And Gas Futures
    Active Trading

    Uncovering Oil And Gas Futures

  3. A Guide To Investing In Oil Markets
    Options & Futures

    A Guide To Investing In Oil Markets

  4. Fueling Futures In The Energy Market
    Options & Futures

    Fueling Futures In The Energy Market

  5. Peak Oil: Problems And Possibilities
    Options & Futures

    Peak Oil: Problems And Possibilities

  6. Investing In Natural Gas? Eye ETFs, ...
    Investing News

    Investing In Natural Gas? Eye ETFs, ...

  7. Fracking ETFs Or Drilling Services Stocks?
    Investing News

    Fracking ETFs Or Drilling Services Stocks?

  8. Trading Opportunities Abound In The ...
    Chart Advisor

    Trading Opportunities Abound In The ...

  9. How to Trade Futures Contracts
    Options & Futures

    How to Trade Futures Contracts

  10. How Oil ETFs React To Falling Energy ...
    Chart Advisor

    How Oil ETFs React To Falling Energy ...

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center