This pick will be slightly different than most shark investment picks – it’s not as aggressive as usual. Irish Forestry Funds (IFS) is a company offering forestry and property investment funds. This pick is not as aggressive as the typical shark investment picks. The ROI is not very attractive – the different funds range between 8.5% and 14.5% per year.
There are several of reasons to pick IFS for the blog this week. First, there are only few reputable forestry investment funds and IFS is known to be one of them, already more than 10 years in business. Second, I believe forestry investment will become more and more lucrative in the future, so it’s a good idea to plan putting money in such funds from now. And third reason is that we should all care about the Earth and do some green investing.
This April IFS is launching The 5th Forestry Growth Plan so I thought it’s the right time to draw your attention to it. I don’t see the projected rate of return announced so it will probably go along the line of the recent funds.
This company will not make you rich for sure so if you are short in funds, you may prefer to check my other investment picks.
If you know about more aggressive forestry investment funds I’ll be more than happy to hear you.
Returns
Returns are expressed as real rates of return over and above the rate of inflation. There is a lack of published information on returns from investment in forestry in Ireland. Growing for the Future – A Strategic Plan for the Forestry Sector in Ireland (5) estimated the real rate of return from forestry (Sitka spruce) as 5% including land cost and exclusive of grants and subsidies. Irish Forestry Unit Trust (IFUT) estimates the return from forestry as being within the range of 5% to 7% (4). At a conference on forestry investment organised by the Irish Forestry Industry Chain (IFIC), most speakers indicated returns in the region of 5 to 7% with the proviso that these could be higher if there was no land cost associated with the investment. Thus farmers planting their own land could expect significantly higher returns.
In Britain on better quality land, with zero opportunity cost attributed, rates of return of 7% (1) and 6.5% (2) have been demonstrated. The World Production Outlook in Britain (3) concluded that rates of return were low and estimated an expected mean of 2.3% for the period 1977 – 81. Very favourable assumptions about land, labour and timber prices raised this to about 6%. Other analysts indicate returns from commercial conifer forestry in the UK are in the region of 4%-6% (7).