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NCREIF Farmland Index Return Statistics (from Inception in January 1991-June 30. 2015):
Historical Return Statistics
Annual
Returns
Annual
Returns
Annual
Annual
Returns
Returns
Annual
Returns
Standard
Dnialion
Cinaulats.*
Returns
Correlation
Jan. 1901 - June 2915
(Inetptioal II 'earl (3 years' (5 'tarsi (IS years) (Inception) !Inception) Draw-down
to Nil
NCREIF Farmland Index (NFL)
11.8%
11.7%
16.2%
153%
16.4%
6.3%
1439.1%
0.0%
-
NCREIF Permanent Ow
12.4%
21.6%
23.9%
20.2%
20.0%
9.8%
1651.2%
-3.8%
-
NCREIF Row Crop
11.0%
4.3%
11.6%
123%
13.4%
3.9%
1193.1%
0.0%
-
S&P 500 Index
10.0%
7.4%
17.3%
17.3%
7.9%
15.7%
938.0%
-45.8%
0.13
MSC World Index
7.4%
1.4%
14.3%
13.1%
6.4%
16.2%
478.7%
—49.1%
0.15
NCREIF Property Index
8.0%
13.0%
11.6%
12.7%
8.2%
4.8%
553.1%
—23.9%
0.19
Barclays Capital Aggregate
6.3%
1.9%
1.8%
3.4%
4.4%
3.9%
342.2%
—3.9%
—0.I
Note: Chart is based on quarterly data. "Drawdown" refers to the maximum peak-to-trough decline in net asset value.
U.S. farmland performance vs. other real estate
Ifistorically, US. farmland has been an asset class with relatively stable returns through income
and value appreciation. The average annual return of the NCREIF Farmland Index since inception in
1991 has been approximately 11.8% per year versus an average of 8.0% for NCREIF's property index.
aura
l.
hi
.NCREIF (rand ince.
. NCAE.F P5./potty mat
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bmr(ag Rtxt)imme,
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NCREIF Property halm (NH)
(2.2%)
S&P 500
(14.1%)
• NCREIF Fanblaad bin
• S P so
CAlei(oma al Mc(*) Otivimz
11(va.fross
Nil
SAP !at
Sett 5C-0
Jul. 1990.
Mar. 1991
NM
NM
NM
Mar. 2001 •
Not 2001
10147)
0.960
10.73-1)
Dec. 2007 -
Jun 2009
109671
712)
7211
Tad'
it/ 41
10. 1951
0.269
m SAP 500
Source: NCREIF
(I) Computed by chain linking quarterly rates of return, with returns assumed to he compounded quarterly per the NCREIF
methodology, assuming the recessionary periods occurred consecutively as one continuous period. Renirn figures are then
presented on an annualized basis. The three recessionary periods are composed of quarterly returns as follows: 1O'92,
1O'02-4O'01, 40;107-20129.
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Cumulative Returns (1991—June 2015)
Conon:Oise Return ot jone .1(1, 2015
0991 = indexed to 1001
1.800
1.600
k IA00
l2®
1.000
KO
603
1-
200
1991
1997
2003
2000
2Cris
-
Fen,land —
WW 2 —aPatenveds —M O%
Sonny: NCREIF, SNI. Financial.
(1991—Jun. 20151
1400%
1400%
1200%
1490%
1000%
tin
P00%
740%
533%
B00%
400%
200%
0%
FainLind
SAP se%)
AP441414, 44
U.S. farmland may serve as a hedge against both inflation and deflation with limited correlation to other asset
classes
We believe the farmland asset class may provide both diversification and a hedge against inflation
in a portfolio of investments. The Purdue University Center for Commercial Agriculture published
research on farmland values. In its analysis, the Center found that over a period of time that spanned
various market cycles (1914.2011) farmland values were highly correlated with inflation with a
correlation coefficient of 0.63 between land prices and the Consumer Price Index. In addition,
farmland's returns to major asset classes such as the US. 10-Year Treasury and the S&P 500 Index, as
noted in the chart below (based on research from The Center for Farmland Research at the University
of Illinois), demonstrate farmland's potential ability to diversify a portfolio.
Return Correlation with U.S. Farmland (1970 to 2012)
30.2% Gold
I
tiv.
10-Year Treasury
(9.6%)
Baa Bonds
(10.0%) IIII
Equity REITs
(26.3%)
S&P 500
(26.6%)
MSCI EAFE Index
(35.0%)
OJIA
(40.0%)
(20.0%)
0.0%
Source: University of Illinois, Center for Farmland Research.
20.0%
40.0%
U.S. farmland performance during different interest rate environments and during recent credit shocks
U.S. farmland property values have generally been increasing over the long-term, although
exceptions may exist, with lower than historical debt-to-equity and debt-to-asset ratios over the past
years, and have risen in both increasing and decreasing interest rate environments. With less debt,
farmland has been and may be more resistant to interest rate changes, credit shocks and financial
recessions. During the financial crisis in MK the NCREIF Farmland Index generated robust gross
cumulative gains while the S&P 500 Index and the MSCI World Index generated substantial losses.
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