Farmland clearly has an useful role to play for investors seeking to build a diversified portfolio. Given unusually high correlations amongst traditional investments - farmland can be an important diversifier. Absolute returns to farmland have shown two valuable qualities - high absolute returns with low return volatility, giving farmland a favorable risk adjusted return profile.
Infrastructure and political risk are also interesting return factors - with higher attributed values to markets with low political risk and well developed infrastructure even where relative productivity is taken into account. For full access to the report go to the Research section of www.enquirica.com and download "Farmland as a Portfolio Allocation". Also register to watch the associated video.
Enquirica is a Calgary based firm focusing on independent analysis of alternative asset classes, particularly in the exempt market in western Canada.
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Enquirica Research is a Calgary based firm focussing on the analysis of alternative asset classes and investments, primarily in western Canada. For copies of Enquirica research register at www.enquirica.com. Enquirica also operates Enquirica TV.