New Claymore Global Timber ETF Makes the CUT

[Rubedo]

http://biz.yahoo.com/seekingalpha/071110/53691_id.html?.v=1

New Claymore Global Timber ETF Makes the CUT
Saturday November 10, 5:44 pm ET
By Index Universe

IndexUniverse submits: Claymore is offering investors access to a market segment that they may not have been able to access before with today's launch of the Claymore/Clear Global Timber exchange-traded fund (AMEX: CUT - News).

The fund is the first U.S.-listed timber fund, and it opens up a whole new asset class to retail investors. Previously, only institutional investors were able to invest in timber due to the associated costs. It is a desirable investment area because of its low correlation with the broader market.

CUT tracks the Clear Global Timber Index, which includes companies that own or manage forested land and harvest the timber from it for the commercial use and sale of wood-based products such as lumber, pulp and paper products. Components must have market capitalizations of at least $300 million, and companies that do not own or manage forested land and harvest trees are excluded from the index. Individual component weights are capped at 4.5% of the index.

As of September 30, the index has 27 components from 11 countries; its top components include International Paper, Stora-Enso Oyj, Weyerhauser Corp. and MeadWestVaco Corp. The United States represents more than one-fifth of the index at 26.39%, followed by Canada at 12.25%, Japan at 11.50%, Finland at 9.00% and Brazil at 9.00%. It has a PE ratio of 14.3.

The Clear Global Timber Index has outperformed the Dow Jones World Forestry and Paper Products Index in each of the past five calendar years and is up 16.38% year-to-date through September 30, versus a 6.88% increase for the other index.

CUT has an expense ratio of 0.65%. You can read the prospectus here.

[nodoodahs]

I can buy all that about timber, because the same could be said about rental real estate.

Considering all that can be done to maximize cash flow and minimize taxation, I am convinced that the single best thing to grow on 5-15 acres of land is:

single-wides.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[Rubedo]

Some articles on Timber.

http://www.investmentu.com/IUEL/2004/20040301.html

According to Investing Legend Jeremy Grantham, Timber Beats Stocks

Historically, timber has performed incredibly well. According to
legendary investor Jeremy Grantham, timber prices have beaten
inflation by 3.3% a year over the last century.

Add in 6% a year in income (from cutting trees), and 2.5% a year in
inflation, and you've got returns of nearly 12% a year in timber... that
beats the return on stocks! Even better, the returns on timber have
been less volatile than the stock market.

http://biz.yahoo.com/ts/070427/10353243.html

Grantham concludes that every asset class is expensive today compared
with historic averages and compared with the cost of replacing it. By
his calculations, the only assets likely to beat inflation by any
significant margin if you hold them for the next seven years are
managed timber, "high-quality" U.S. stocks, and bonds.

http://www.iht.com/articles/2006/04/05/bloomberg/bxinvest.php

NEW YORK: Harvard University, among the first institutional investors
to put money into timber, says it still has an appetite for trees.

"We are under-allocated," said Andrew Wiltshire, who oversees
timberland investing for the Cambridge, Massachusetts, school's $25.9
billion endowment, the biggest among universities. The fund has 10
percent to 12 percent of its assets in timber.

Institutions including Yale University's $15.2 billion endowment also
are expanding timber holdings, attracted by returns that beat the U.S.
stock market. The National Council of Real Estate Investment
Fiduciaries' Timberland Property index has climbed at an annual rate
of 15 percent since its inception in April 1986, compared with an 11
percent return by the Standard & Poor's 500-stock index.

http://www.dailywealth.com/archive/2006/feb/2006_feb_10.asp

On March 1, 2000, Grantham published his 10-year predictions for all
asset classes. He predicted U.S. stocks would do the worst and real
estate would do the best over the coming ten years. Real estate is
"really, seriously, absolute cheap" he told the crowd. "Real estate is
a good solid asset with a good solid return. Yet REITs trade at a 25%
discount."

Grantham forecasted a total return of an astounding 10.5% a year for
the next ten years in real estate stocks, his most optimistic forecast
of any asset class. He was dead on. The returns in real estate stocks
have been outstanding since 2000. Just like his pessimistic stock
forecast at the time, his optimistic real estate forecast was
fantastic.

Grantham avoided stocks, invested heavily in real estate, and made his
investors a fortune.

Today, Jeremy Grantham likes timber. And so do I.

Real estate stocks, now up 100% since 2000, are no longer
attractive... they're too expensive. Stocks aren't exciting to
Grantham either (they're not cheap enough yet). And Grantham doesn't
even like bonds. He predicts annualized returns over the next seven
years to be between -2% and +2% for these three assets.

Timber, by far, is his top pick.