Elders stands by forestry investments

Elders Forestry maintains that its diversified forestry project 2010 is an ideal investment for self-managed super fund (SMSF) trustees despite lingering fears in the market caused by the collapse of major agribusiness companies Timbercorp and Great Southern last year.

Forestry managed investment scheme (MIS) investments suit SMSF trustees due to a favourable after tax return and similar liquidity profile, according to Elders Forestry.

The relatively illiquid MIS units and 21-year investment timeframe of Elders’ diversified forestry project units are suitable for SMSF clients, while the ability to defer income until the pension phase will help to minimise the tax payable on investment income and compares favourably with equity and property investments, Elders said.

SMSF take-up of Elders Forestry project units was about 17 per cent of total sales last year, and with a similar allocation likely this year the total should equate to about $10 million in sales, the company said.

Following the upheaval in the agribusiness sector during the financial crisis, advisers and trustees looking to diversify their portfolio outside of the equity and property asset classes needed to show confidence in the forestry expertise of the manager, as well as their ability to manage the assets and cash flow of the business, Elders said.

Elders’ diversified forestry project offers the ability to rebate up to 100 per cent of commissions to cater for fee-for service clients, the company said.