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  • Increased opportunities drive investment growth

    2017 - 07.05

    Investments into alternative assets including timberland, forestry and agriculture have continue to grow as opportunities become more widely available.

    In the past, such investments were the remit of wealthy institutional investors, however times are changing as private investors from all backgrounds seek income-producing assets with less volatility than common stocks.

    Recently, timberland has been singled out as a particularly valuable commodity. Such high-profile investors as the Church of England and the Yale Endowment Fund have invested heavily in forestry over the past decade, many of whom saw value increases of around 24 per cent in 2016.

    As trees are a renewable resource, woodland provides a yearly stream of income, and should the price of timber fall, management can decide to postpone a harvest that year until prices return to previous levels.

    Although it is still a common belief that timber investment is particularly risky due to infestations and potential forest fires, the truth is that only 0.5 per cent of the return is lost annually due to these causes. This risk can also be reduced by diversification.

    Overall, the timber market is strong and the growing investments within this sector reflect this.

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