Timber Funds - The New Sales & High Expense Funds??!!

Timber Funds -

Give us 20k and we will make you 250 in ten years....

Highly suspicious, too good to be true I feel.

Also with these funds you get no return for the first 5 years or so....

I think if you are going to get into timber buy through an ETF or closed end 'investment trust' with low annual fees and a 'real' independent management board.

It is interesting how all the bust high expense property sales firms are now spinning timber as the great new investment in far away lands...

Stick to the ETFs and Investment Trusts as a way to get exposure to this great and uncorrelated asset.

These firms offering 'too good to be true' returns are very similar to the off plan craze of a few years ago. We know what happened there......

ringledman said:

Timber Funds
Stick to the ETFs and Investment Trusts as a way to get exposure to this great and uncorrelated asset.

Click to expand...

If you are investing in timber, before you plunge into ETFs you need to look exactly in what they invest. The iShares Timber ETF (WOOD.L), for example, invests mainly in timber processing companies and is not partiularly diversified from the US stock market, as the market appears to regard these as industrial companies and not timberland, whereas US timber REITS, which are largely timberland investments, do provide some diversification: http://uk.finance.yahoo.com/q/ta?s=WOOD.L&t=2y&l=off&z=m&q=l&p=&a=&c=ryn,^DJI
If you had invested in the iShares Timber ETF a year ago you would have had an 80% gain to date, but if you bought it on its launch in 2007 [like muggins here] you would still be facing a 7% loss in euro terms today. [Disclaimer: The above is comment / observation and is not a recommendation to follow any particular investment strategy or to buy / not buy any particular fund or stock.]

Plenty of people made a lot of money from the "offplan craze" and plenty of people are making money from timber...

Those who got stung were those who did not research the properties enough and bought into slick agents' promises of capital frowth, rental yields etc. Research the timber market well and invest in the right funds and I don't see the problem...