Forestry, like property, is a highly popular investment vehicle in the Republic. Two new forestry funds have been launched to appeal to the hearts and wallets of the treeloving State. The tax-free, low-risk nature of the investment also makes it attractive.

The Premier Irish Forestry Fund and the Sixth Irish Forestry Fund both promise a low initial investment for a high return.

The minimum purchase in the Premier Irish Forestry Fund is £1,000 (€1,269.74) and 4,000 preference shares are available. The projected compound annual growth rate is 12.58 per cent. After potential inflation of 4 per cent per annum the real return rate is 8.58 per cent. After 30 years, each share is expected to return more than £35,000 tax free.

The Sixth Irish Forestry Fund requires a minimum investment of £500. Each share is worth £500 and the fund projects an annual return rate of 12.25 per cent tax free. After assumed inflation of 4.5 per cent, the return is 7.75 per cent. If this projected figure proves true, it equates to £16,000 tax free on each £500 share. There are 3,000 shares available. Shares are freely transferable any may be sold during the life of the fund.

Although it is always appealing to invest in something you can see and touch, the time frame necessary before seeing a significant return on this investment makes it prohibitive for many investors. Trees planted for the fund mature over 30 to 35 years, with some only maturing after 100 years.

Once mature, the forests are sold to the highest bidding mill with the underlying land sold in the open market. The fund is then closed and the profits are distributed to the shareholders.

This is an attractive product for those looking for alternatives to traditional retirement planning or wishing to invest for their children or grandchildren.

For more detailed information on these forestry funds contact either the Sixth Irish Forestry Fund, (01) 284 1777, or the Premier Irish Forestry Fund, (062) 63155.