Interest in timber and forestry as an investment continues to grow, with Barclays now getting in on the act.

Barclays Global Investors has launched the iShares Global Timber and Forestry exchange traded fund (ETF) on the London Stock Exchange (LSE) – the first timber sector ETF on the LSE.

The fund invests in 25 companies worldwide, including forest product manufacturers and timber real estate investment trusts.

It will track Standard & Poor’s recently launched Timber and Forestry index.

Forestry investment outperformed equities, bonds and commercial property in 2006, with the Investment Property Databank Forestry Index recording a 20% rise for the year.

In contrast, average returns for equities and commercial property were 16.8% and 18.1% respectively.