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YTD Analysis of Lumber Prices Vs. Timber ETFs

November 22, 2008 – Comments (0) | RELATED TICKERS: CUT , IP , WY

YTD Analysis of Lumber Prices Vs. Timber ETFs

[web link to YTD chart of Lumber, CUT, WOOD, and SPY]

The accompanying table [click to enlarge or download] includes a year-to-date analysis for near-month CME Random Length Lumber Futures (LB), Claymore/Clear Global Timber ETF (CUT), iShares S&P Global Timber & Forestry ETF (WOOD), and the S&P 500 ETF (SPY). The price of lumber has declined the least of all four with a YTD loss of about 33% versus a 46.8% loss for WOOD, a 57.7% loss for CUT, and a loss of 42.8% for SPY.

An idea for a new commodity pool fund that invests in near-month lumber futures would provide investors with easier access to the timber asset class without investing in futures or having the stock-based exposure in existing ETFs such as CUT and WOOD. The profile for CUT includes 27 companies with about one-third based in the U.S., followed by about 14% from Japan – including companies such as Weyerhaeuser (WY), Rayonier (RYN), MeadWestvaco (MWV). The profile for WOOD includes 26 companies, with U.S.-listed holdings such as Rayonier, Plum Creek Timber (PCL), Weyerhaeuser, Potlatch (PCH), International Paper (IP), and Packaging Corp. of America (PKG).