Timberland investments are niche investments in tree farms and natural forests. The returns on these forestland investments come from selling the timber and appreciation in the value of the land. These type of investments are typically very pricey and thus are typically purchased by hedge funds and large institutional investors.

While timberland investments have a good potential for returns, they also carry the risk of high purchase price (land), price risk from timber values, as well as natural disasters. Overall however, timberland investments carry a fairly high return with relatively minimal risk.