Sustainable Forestry

INVESTMENT PERFORMANCE 

The Investment Property Databank (IPD) maintains and publishes the IPD Forestry Index (www.ipdglobal.com), generally accepted as a benchmark for UK timberlands performance.  This demonstrates that UK forestry has shown competitive returns in comparison to main stream investments over a long period of time.  It should be emphasised that the forestry returns are largely TAX FREE, enhancing performance against other assets.

IPD UK Forestry index returns
Dec 1992=100   Annualised total return %
Forestry 2010 3 yrs 5yrs 10 yrs 18 yrs
Total return 20.0 12.6 17.7 10.4 6.3
Timber price change* 38.5 1.5 12.7 4.5 -0.5

* On a year to March basis (2010=March 2011)

Comparative data - Total return
Equities 14.5 1.4 5.1 3.7 8.2
Bonds 9.1 7.7 5.9 5.9 7.7
Commercial property 15.1 -2.5 1.1 6.8 9.2

Data sources: Forestry Commission Nominal Price Index of Coniferous Standing Sales (for Great Britain), FTSE All-Share Index, FTSE UK Gilts Index 5-15 yrs, IPD UK Annual Property Index

The IPD UK Forestry Index is calculated from a sample of private sector coniferous plantations of predominantly Sitka spruce in mainland Britain. FIM contributes information to IPD to be included in the sample.

It is emphasised that the IPD UK Forestry Index excludes purchase and fund raising costs and portfolio management fees from the calculation of returns, the inclusion of which would reduce the returns stated.

 

FIM's FORESTRY FUND TRACK RECORD

FIM has reviewed the performance of six of the trusts amalgamated into the FIM Sustainable Timber & Energy LP in Q2 10.

The performance is based on gross investment, distributions received and the transfer value of each trust on entry into the LP in May 2010. The return is stated as an Internal Rate of Return. It is stated net of all fees and costs and all expenditure incurred in the portfolio.

Trust Start Date Capital Invested (£) IRR
1 2000 1,326,000 7.7%
2 2001 1,138,000 10.3%
3 2002 605,000 13.4%
4 2003 2,500,000 8.7%
5 2004 3,081,000 15.4%
6 2005 3,380,000 4.7%

Past performance should not be interpreted as an indication of future performance. The value of any investment or income arising from it may go down as well as up and investors may not recoup the full amount invested.