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Real Asset

What is a 'Real Asset'

Real assets are physical assets that have value due to their substance and properties. Real assets include precious metals, commodities, real estate, agricultural land, machinery and oil. They are appropriate for inclusion in most diversified portfolios because of their relatively low correlation with financial assets such as stocks and bonds. Next Up Tangible Asset Intangible Asset Business Asset Net Tangible Assets

Explaining 'Real Asset'

Investing in real assets is particularly well-suited for inflationary times because of their tendency to outperform financial assets during such periods.

Difference Between Real Assets and Financial Assets

Real assets are a separate and distinct asset class from financial assets. Unlike real assets, which have intrinsic value, financial assets derive their value from a contractual claim on an underlying asset which may be real or intangible. For example, commodities and property are real assets, but commodity futures, exchange-traded funds (ETFs) and real estate investment trusts (REITs) constitute financial assets whose value depends on the underlying real assets.

Advantages and Disadvantages of Real Assets

Real assets tend to be more stable than financial assets. Inflation, shifts in currency values and other macroeconomic factors affect real assets less than financial assets. However, real assets also have lower liquidity than financial assets, as they take longer to sell and have higher transaction fees in general. Finally, real assets have higher carrying and storage costs than financial assets.

Difference Between Financial Assets and Intangible Assets

Intangible assets include trademarks, brand recognition and other intangible items, but this asset category does not include stocks and bonds. Similarly, financial assets include stocks and bonds, but the category does not include goodwill, patents or other intangible assets.

Difference Between Tangible and Intangible Assets

Tangible assets include stocks, bonds, property, cash, vehicles and a host of other things, while intangible assets include only a small sliver of items. Tangible assets include both financial and real assets, while intangible assets include items that exclusively fall into the intangible category.


Further Reading


State government finances and real asset investments: The Nigerian experience
papers.ssrn.com [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

A multivariate analysis of REIT performance by financial and real asset portfolio characteristicsA multivariate analysis of REIT performance by financial and real asset portfolio characteristics
link.springer.com [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

Real asset illiquidity and the cost of capitalReal asset illiquidity and the cost of capital
www.jstor.org [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

The role of the underlying real asset market in REIT IPOsThe role of the underlying real asset market in REIT IPOs
onlinelibrary.wiley.com [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

The role of trading frictions in real asset marketsThe role of trading frictions in real asset markets
www.aeaweb.org [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

Real asset ownership and the risk and return to stockholdersReal asset ownership and the risk and return to stockholders
www.aresjournals.org [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

An Analysis of Rational Bubbles in the Real Asset Market <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200303004.htm' />An Analysis of Rational Bubbles in the Real Asset Market [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200303004.htm'>PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

Modeling the behavior of real asset pricesModeling the behavior of real asset prices
link.springer.com [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …

An examination of farm sector real asset dynamics: 1910–85An examination of farm sector real asset dynamics: 1910–85
academic.oup.com [PDF]
State governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in real asset investments that are at times overwhelming, especially when compared with their limited financial  …


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