A successful forestry investment – investing in Baltic forest with Europiska skogsfonden (The European forestry fund)

Forestry is one of the more common ways to invest in when it comes to alternative investments and there are a lot of prospects out there. I can see why this investment type is popular. One of the major advantages is that forestry is considered to give a steady and predictable return. +10% annual returns are not unusual. The predictability of the returns is highly appreciated in the current volatile financial market. Looking in the rear-mirror, forestry investments has in general outperformed the stock-market the past decade - with lower risk!

Investors need to have a medium to a long term investment perspective (from a few years to decades), depending on the type of forestry and investment type. I have personally invested in several different forestry investments and you will be able to read about all about them in my blog (I have written about my teak investment in a previous posting).

This post is about my investment in a fund investing in Baltic forest. I have invested with www.euroforest.se  (Europeiska Skogsfonden – The European Forestry fund), a company specializing in investing in forest in the European Union with a focus on Eastern Europe. Two of the company’s important reasons why this would be a good investment is that forest in the Eastern Europe is cheaper than other countries in Europe and therefore has a potential higher price development, and secondly, best practice forest maintenance is applied which contributes to higher returns. The predicted return on this investment is 10-12% per year, of which 2-5% is yearly dividends. This far the fund has delivered as following:

Development in percent (dividends within brackets)

2011	2012	2013	Since the beginning
+13,2 (3,2) %	+12,4 (1,5) %	xx,x (3,0) %	+34,3 (7,7) %

Figures from: http://www.euroforest.se/historik 

The goals for return on investment have been exceeded every year, giving investors 34,4% since the start – not bad!

I invested in a closed fund that was set up in 2010 and will be locked for five years in total. Hopefully the remaining years will be just as profitable! The fund is regulated by the Swedish finance authorities, which for me is a proof of quality and that everything is managed correctly. Good to know so I can sleep well at night J 

If you consider investing in this fund or a similar one, make sure you don’t need your money during the lock-up time. Also, the minimum investment is often quite high, in this particular case it is about 5 000 EUR.

Next time I will write about an exciting investment I recently have made in Brazil. So stay tuned and subscribe to my blog (at the top right on my blog) - don’t miss out on more interesting stories!