Real assets

Real Assets is an investment asset class that covers investments in physical assets such as real estate, energy, and infrastructure. Real assets have an inherent physical worth.^[1] Real assets differ from financial assets in that financial assets get their value from a contractual right and are typically intangible.

Real assets are categorized into three categories:

Real Estate: REITs, commercial real estate, and residential
Natural Resources: Energy, Oil & gas, MLPs, timber, agriculture, solar, mining, and commodities
Infrastructure: Transportation (roads, airports, railroads), utilities, telecommunications infrastructure

Real assets are appealing to investors for four reasons: high current income, inflation protection / equity appreciation, low correlation to equity markets, and favorable tax treatment.^[2]^[3]^[4]

^ Some investment professionals have argued that intellectual property (such as royalties and patents) and insurance (life and annuities) should be included as real assets.
^ For example, in the United States, REITs are treated as pass-through vehicles and not taxed at corporate level. In the case of exploration & development for oil and gas, there is accelerated depreciation.
^ "Real estate investment trust", Wikipedia, 2019-09-24, retrieved 2019-10-08
^ Cussen, Mark P. "Oil: A big investment with big tax breaks". Investopedia. Retrieved 2019-10-08.

[1] Some investment professionals have argued that intellectual property (such as royalties and patents) and insurance (life and annuities) should be included as real assets.

[2] For example, in the United States, REITs are treated as pass-through vehicles and not taxed at corporate level. In the case of exploration & development for oil and gas, there is accelerated depreciation.

[3] "Real estate investment trust", Wikipedia, 2019-09-24, retrieved 2019-10-08

[4] Cussen, Mark P. "Oil: A big investment with big tax breaks". Investopedia. Retrieved 2019-10-08.

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