Skip to main content

The Globe and Mail

Tired of wild market swings? Try investing in farmland

With both bonds and stocks making wild swings recently, investing is getting more and more stressful.

How to calm the anxious investor? Perhaps a more pastoral approach to portfolio-building. Literally.

In recent years, farmland has gained some currency as an asset for high net worth investors. One firm using it in client portfolios is Nicola Wealth Management in Vancouver.

Story continues below advertisement

"Historically, returns have matched the TSX over the last 60 years or so, but they are uncorrelated," John Nicola, the firm's CEO, said via e-mail.

More from Rob Carrick

Do you have the right type of TFSA?

Skittish about bonds? Here's a sensible option for your portfolio

Help for a conservative investor who wants an annuity

Investments that are uncorrelated to stocks are in high demand right now, especially with bonds looking shaky in recent days. As packaged in the NWM Farmland LP, investors get access to acreage in Alberta, Saskatchewan, Manitoba and Ontario that is purchased and leased back to farmers in return for rental income (there is no exposure to the crops being grown). Mr. Nicola considers this investment to be fairly low risk because the land is not mortgaged. Rents can fluctuate, however.

Mr. Nicola said the net rental income from NWM Farmland LP should come in between 2 and 3 per cent after baseline fees of about 1.15 per cent (administration and performance fees may also apply). There's also potential for capital appreciation driven by the fact that there is a fixed amount of farmland available while global demand for food is rising.

Story continues below advertisement

Mr. Nicola said that liquidity limitations mean the farmland LP is suited only to long-term investors who favour hard-asset investing. There are no redemptions in the first three years and a 2-per-cent redemption penalty after three years. One calendar quarter is required as a redemption notice.

The minimum investment for NWM Farmland LP is $25,000. Mr. Nicola said the fund accounts for roughly 10 per cent of the real estate allocation for client portfolios, or about 2 per cent of the total portfolio.

It's possible to get exposure to farmland through U.S.-listed real estate investment trusts. One is Farmland Partners Inc. (FPI-N), which owns farmland across the United States, while another is Gladstone land Corp. (LAND-Q). Gladstone shares are up about 20 per cent this year, while FPI shares are down almost 3 per cent. The yield for both is about 4.9 per cent.

Report an error Licensing Options
About the Author
Personal Finance Columnist

Rob Carrick has been writing about personal finance, business and economics for close to 20 years. He joined The Globe and Mail in late 1996 as an investment reporter and has been personal finance columnist since November 1998. Rob's personal finance columns appear in The Globe on Tuesday and Thursday, and his Portfolio Strategy column for investors appears on Saturday. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.