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What are real assets

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise.

What are real assets?
A real asset has physical properties that are deemed to give it intrinsic value. Examples of real assets include real estate, infrastructure projects and commodities. Although the ‘intrinsic’ values can fluctuate (house prices can go up and down, for example) they do tend to offer to protect capital against inflation. Some real assets can also generate income. Real estate such as office blocks and shopping centres deliver rent while infrastructure assets such as bridges generate income through toll fees. These income streams also tend to be linked with inflation.

The main disadvantage with investing in real assets is that they are illiquid, such that selling them can be a long process and transactions can incur high transaction fees. They can also face high maintenance costs, in the case of real estate and infrastructure, while commodities such as gold, oil or wheat involve storage costs.

These challenges, plus the fact that infrastructure assets involve high initial investments, mean that for most investors, the best way to invest in real assets is via a managed fund. By pooling the investments of multiple investors, funds can create diversified portfolios managed by experts who can select and manage the underlying assets.

Understand common financial words and terms See our glossary

How to invest in Liontrust funds

Through a fund platform
Through a financial adviser
Direct with Liontrust