Less, in addition to ag, base & precious metals, and energy as essential commodity hedges, you've referred to timber and highlighted that there no
specific etf that tracks this. Why not use PCL and POPE as proxies for a timber ETF?
timber etf proxies?
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 hanacek |
timber etf proxies? |
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Posts: 72 (09/22/08 03:04:36) |
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Less Antman |
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Posts: 902 (09/22/08 03:42:20) |
Although I do use timber REITs for some of my wealthier clients, there really isn't a good proxy for the Timberland index that academic studies used to
support their inclusion in a diversified portfolio: for all its exposure to Timberland, PCL stock has had a surprisingly low correlation to that index. POPE
is better, but incredibly volatile, and it is a Master Limited Partnership rather than a stock or REIT, so the tax preparation hassles are not insignificant
(and heaven help you if you put it into an IRA without understanding the potential taxation of Unrelated Business Taxable Income). The two ETFs that were
ostensibly going to cover this category are so impure as timber plays that I consider them useless as a proxy for timberland.
So, for now, I'm still leaving them out of my portfolio, although I have no objection to people putting up to 5% of their investments in the three REITs that have some timberland content: PCL, RYN, and PCH, and actually do so for several of my clients. |
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hanacek |
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Posts: 73 (09/23/08 20:52:45) |
Thanks for your thoughts. And I love the forest picture. Take care.
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eecee |
CUT? | ||
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Posts: 1 (06/18/09 07:26:53) |
what about CUT as timber ETF?
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Less Antman |
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Posts: 959 (06/18/09 16:10:04) |
CUT is one of the ETFs to which I was referring that aren't pure enough plays in timber to serve as good proxies. Clever name aside, it is more of a play
on paper companies.
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