Lesson 3 of 6 · 13 min
Real assets: real estate, infrastructure, natural resources and more
Real assets are mostly tangible things, such as buildings, land, toll roads, forests and commodities, that either produce cash flows or store value, joined by collectibles and intangibles like patents and digital assets.
In short
- Real assets generate current or expected cash flows and/or act as a store of value; mostly tangible, but also intangibles such as patents and intellectual property.
- Real estate: debt or equity in land and buildings, split into commercial (business cash flows) and residential (household rents or mortgage payments). Listed forms: REITs and mortgage-backed securities.
- Infrastructure: long-lived assets for public use providing essential services; often built through a public-private partnership (PPP) under a concession agreement.
- Natural resources: less developed land (farmland, timberland, exploration land) and commodities, which have no cash flows of their own but can hedge inflation and diversify.
- Others: collectibles (art, wine, coins, watches), intangibles (patents, litigation) and digital assets (cryptocurrencies, tokens, NFTs).
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