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Real Assets Investment
REAL ASSETS INVESTMENT
Why Invest in Real Asset?
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Investing in real assets provides a well-balanced portfolio with excellent benefits including enhanced diversification, inflation protection, stable and attractive total returns, tangible value, and capital appreciation. Diversifying investment portfolio in real assets help Maylan achieve our financial goals and secure our future.
1. Diversification and Long-Term Stability
Real assets are commonly under-represented. However, they offer long-term stability, especially during inflationary periods. Real assets typically outperform traditional stocks and bonds during inflationary periods of lower-than-expected growth and higher-than-expected inflation. Therefore, investments in real assets can help investors diversify and manage volatility in investment portfolios.
2. Inflation Protection
Investments in most real assets, such as real estate and infrastructure, have built-in inflationary mechanism, as the underlying return streams are governed by regulatory or government contracts providing protection against inflation for the government and investors. Furthermore, natural resources and commodities are stores of value, which can act as a hedge against inflation, as their prices often rise with increasing inflation rates.
3. Low Risk and Consistent Returns even through Economic Downturns
Investment in infrastructure provides consistent and attractive returns because consumers continue to use water, electricity, roads and other essential infrastructures and public facilities regardless of the state of the economy. Further, the underlying revenue streams of real assets investment are usually governed by long-term government or regulatory contracts.
4. Long-Term Attractive Returns from Global Economic Expansion and Urbanization​
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Investment in real assets provides long-term attractive returns because demand for infrastructure, building materials, and natural resources continues to increase as the population grows, leading to rising prices and high returns. The returns for real assets investment are typically higher in developing countries, which have a large appetite for gravel, lumber, steel, and other construction materials to build roads and other public works fueled by population growth and urbanization.
5. High Returns Due to Rising Demand of Resources from Inter Governments​
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Another source that drives up the demand of natural resources is national governments. Demand for natural resources will continue to increase over time as various nations continue to buy up natural resources through inter-government channels to ensure a consistent supply of crucial raw materials for their countries. This type of procurement of natural resources from national governments contributes to higher demand and rising prices, resulting in high returns for investors.
6. Value Appreciation
Real assets can generate income and appreciate over time. Investing in real assets with high potential growth can generate income as well as capital appreciation. Since 2016, the average farm real estate value in the United States has increased by 27 per cent, according to the latest report from the United States Department of Agriculture. In addition, from April 2021 to April 2022, home values in the US rose 18.8% nationally, according to the Federal Housing Finance Agency (FHFA), while the historical average home values have increased 4.7% annually since 2000. Other real assets, such as gold, have appreciated 39.7% over the past three years.
7. Capital Protection
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The protection of capital is the foundation of any well-balanced investment portfolio. Real assets investing has a proven history of capital protection through economic downturns, from the Global Financial Crisis (GFC 2007 - 2008) to the U.S.-China trade war, and most recently through the Covid-19 pandemic, due to their predictable cash flows, underlying tangible assets, and critical role in the economy and society. As high inflation becomes a pressing concern affecting the global economy, capital protection helps maintain the absolute value of monetary assets and preserve its purchasing power through volatile market conditions.
8. Strategically Balanced and Sustainable Investment Portfolio​
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In real asset investments, the investment in the resource component, including renewable energy, precious metals, and building materials, works hand in hand with the investment in the infrastructure component to optimize the total investment returns. Resources investment guarantees the supply of building materials for infrastructure development, which, in turn, creates jobs, public facilities, and services, fueling sustainable economic growth and delivering stable and attractive returns.
9. Improving the Economy and Social Benefits and Protecting the Environment
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Investments in resources and infrastructure development generate stable and attractive returns for investors, while strengthening the economy, increasing social benefits, and protecting the environment.
