PORTLAND – Three years into a bear market in stocks, investors who put their money into large tracts of northern New England timberland are reaping steady but unspectacular returns.

Timberland such as the 212,000 acres being offered by one company in Vermont, New Hampshire, Maine and New York is a relatively new asset class for institutional investors.

But in many parts of the country, investment managers such as the Boston-based Hancock Timber Resources Group have become the chief buyers of timberlands, supplanting lumber, paper and other forest-products companies that use the land to supply mills.

“Fifteen years ago, there may have been $100 million of institutional money in timberland. Now it’s up to $10 billion to $12 billion,” said Jack Lutz, an economist with the forestry consulting firm James W. Sewall Co. of Old Town.

The total return on timberland investments has averaged 10.1 percent a year over the past decade as measured by the National Council of Real Estate Investment Fiduciaries Timberland Index, the industry benchmark. The average was 9.4 percent for the Standard & Poor’s index of 500 stocks, which soared during much of the 1990s before tanking for three straight years.

Though the Hancock Group sale, worth an estimated $100 million, scares some environmentalists, the company says it expects the buyers to continue harvesting timber. It also says the sale reflects not a weakness in timberland as an investment, but investors’ need to keep timberland from becoming too large a segment of their portfolios.

Much of the anticipated return from timberland is from growing land values. The rest comes mainly from timber sales and lease income.

Hancock is the country’s largest timberland investment manager. The John Hancock Financial Services Inc. subsidiary manages 3.1 million acres of forest worldwide, including roughly 219,900 acres in Maine, 83,000 acres in New Hampshire, 31,000 acres in Vermont and 94,000 acres in New York.

Smaller investors who have looked with dread at their quarterly 401(k) statements have few options for investing in timberland. Hancock, for example, has a minimum investment of $5 million.

Among the handful of publicly traded companies that invest primarily in timberlands is Plum Creek Timber Co., a Seattle-based real estate investment trust that owns more than 8 million acres worldwide, including more than 990,000 in Maine.

Timberlands are regarded as a conservative, although illiquid, investment that can generate the kind of steady returns associated with commercial real estate while providing a partial hedge against inflation.

Environmentalists have kept close scrutiny on land purchases by financial managers, fearing that a relatively short-term investment horizon may lead them to go for quick profits through clear-cutting trees or building recreational subdivisions.

Cathy Johnson, North Woods Project director for the Natural Resources Council of Maine, said it is hard to generalize about whether financial investors or paper companies are better stewards of the forest, however.

“You can have good and bad in both categories,” Johnson said. “The real issue is what time frame are they managing for.”

Tom Doak, director of the Maine Forest Service, said investment groups may even cut less timber than other owners.

“They’re not generally involved in clear-cutting,” Doak said. “Their interest is the increase in the value of the asset when it is sold.”

Investment performance is linked in large part to timber prices. When national forests in the West were closed in the early 1990s to protect the spotted owl, a spike in the price of timber created annual returns approaching 20 percent for timberland investors.

Timber prices are low now, but timberland still has performed well compared to stocks recently, Lutz said.

Despite the surge in institutional investment, such owners still account for only about 5 percent of the nation’s 350 million acres of privately owned timberland. Individuals and families account for about 72 percent, and industrial owners make up the remaining 23 percent.

In Maine, industrial ownership fell from 46 percent in 1993 to 30 percent in 1999. During that period, institutional ownership went from virtually nothing to about 15 percent.

Hancock economist Courtland Washburn sees plenty of room for that figure to grow.