Global Timber & Forestry ETF Launched by iShares

The iShares S&P Global Timber and Forestry ETF launched this week, with very light volume of 7,000 shares traded on its opening day. The fund (WOOD) seeks to replicate the performance of the S&P Global Timber and Forestry Index, which Standard and Poors created back in August of 2007. The index is comprised of roughly 25 of the largest public companies dealing with the management, ownership, or upstream supply chain of forests and timberlands. Many of the companies are REITs, paper product companies, and paper packaging companies. The top three holdings in the index are Plum Creek Timber (PCL), Rayonier (RYN), and Weyerhaeuser (WY), which are all U.S. companies. Out of the ten countries represented in the index, the U.S. makes up roughly 41%, followed by Canada’s roughly 19%. The top ten of the 25 holdings as of December 31, 2007 are as follows:

Plum Creek Timber – 8.45%
Rayonier Inc – 8.29%
Weyerhaeuser Corp. – 8.11%
Sino-Forest Corp. – 8.00%
West Fraser Timber – 4.17%
Oji Paper Co. – 4.14%
SCA – Svenska Cellulosa – 4.08%
Smurfit-Stone Container – 3.92%
Potlatch Corp. – 3.90%
Aracruz-PNB – 3.88%

The top five holdings make up roughly 57% of the index, which is comprised of companies ranging from $15 billion in market cap, to $300 million. Along with the U.S. and Canada, other countries with sizeable portions of the fund are Brazil, Finland, Sweden, and Australia.