We have seen demand for real assets grow dramatically in recent years, and we expect it will advance further as investors better understand the positive attributes of the asset class. Real assets offer the opportunity for diversification, inflation hedging and competitive total returns. Real assets may also serve as a nontraditional source of income, a feature that investors frequently overlook.
What are real assets?
Broadly, real assets provide the framework and resources to facilitate everyday activity in the world economy. While numerous types of investments could be considered real assets, our definition includes:
Real estate, including real estate investment trusts (REITs). Land and commercial properties including apartments, offices, warehouses, and malls, etc.
Infrastructure. Assets and networks used to transport, store and distribute goods, energy, people and information, such as toll roads, pipelines, airports and cellphone towers.
Commodities. Basic goods such as oil, natural gas, precious metals, gold, corn and soybeans.
Unlike conventional stocks and bonds, the value of listed real asset investments comes from the physical nature of their underlying assets. This direct link to hard assets means real assets often store long-term value better than more traditional investments. Their intrinsic value may also increase due to higher utilization, greater demand or scarcity of supply.
The inherent characteristics of each real asset can vary, but they have several features in common.
The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. For term definitions and index descriptions, please access the glossary on nuveen.com. Please note, it is not possible to invest directly in an index.
Important information on risk
All investments carry a certain degree of risk, including possible loss principal and there is no assurance that an investment will provide positive performance over any period of time. It is important to review your investment objectives, risk tolerance and liquidity needs before choosing an investment style or manager. Concentration in infrastructure-related securities involves sector risk and concentration risk, particularly greater exposure to adverse economic, regulatory, political, legal, liquidity, and tax risks associated with MLPs and REITS. Foreign investments involve additional risks including currency fluctuations and economic and political instability. These risks are magnified in emerging markets. Common stocks are subject to market risk or the risk of decline. Small- and mid-cap stocks are subject to greater price volatility. The use of derivatives involves substantial financial risks and transaction costs. A potential investment in other investment companies means shareholders bear their proportionate share of expenses and indirectly, the expenses of other investment companies. Additionally, infrastructure-related entities may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, service interruption and/or legal challenges due to environmental, operational or other mishaps and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.
Nuveen, LLC provides investment solutions through its investment specialists.
This information does not constitute investment research as defined under MiFID.
A real asset is a tangible investment that has an intrinsic value
intrinsic value
What Is Intrinsic Value? Intrinsic value is a measure of what an asset is worth. This measure is arrived at by means of an objective calculation or complex financial model. Intrinsic value is different from the current market price of an asset.
money that is invested in equipment, machinery, etc., rather than in shares or bonds: Manufacturing output has fallen by 6%, with real investments falling by 12%. Higher taxes on oil should be recycled into real investment in wind and solar power.
Exposure to real assets can help investors hedge against inflation and diversify their portfolios while generating predictable income streams. Investors can explore opportunities in infrastructure, real estate and natural resources that may benefit from economic growth trends.
A financial asset is a liquid asset that gets its value from a contractual right or ownership claim. Real assets are physical assets that have an intrinsic worth due to their substance and properties such as precious metals, commodities, real estate, land, equipment, and natural resources.
Real assets include precious metals, commodities, real estate, land, equipment, and natural resources. They are appropriate for inclusion in most diversified portfolios because of their relatively low correlation with financial assets, such as stocks and bonds.
Real estate, including real estate investment trusts (REITs). Land and commercial properties including apartments, offices, warehouses, and malls, etc.
Given the financial definitions of asset and liability, a home still falls into the asset category. Therefore, it's always important to think of your home and your mortgage as two separate entities (an asset and a liability, respectively).
Real estate investing can be lucrative but it's important to understand the risks. Key risks include bad locations, negative cash flows, high vacancies, and problematic tenants.
A real asset is an item that has value and is owned by an individual or organization. It can include cash, inventory, equipment, real estate, accounts receivable, and goodwill. Real assets are different from financial assets, which are intangible and can be easily traded in the market.
A DIVERSIFYING ASSET CLASS WITH A DEFENSIVE PROFILE
Real asset private debt offers investors attractive upside potential together with a defensive profile as it benefits from securities based on real assets which, in the event of a default, have higher recovery rates than those of high yield instruments(1).
Real assets provide portfolios with increased diversification through lower return correlations, both within their own asset class and with other classes. Additionally, real assets are a reliable inflation hedge against both expected and unexpected inflation.
Private equity real estate is an alternative asset class composed of professionally managed pooled private and public investments in the real estate markets.
What are examples of real property? Real property may include land, homes, detached garages, patios, swimming pools, or other permanent structures. Crops and other natural resources that are attached to a piece of land are also considered real property.
Introduction: My name is Wyatt Volkman LLD, I am a handsome, rich, comfortable, lively, zealous, graceful, gifted person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
