Real assets are physical or tangible items that have intrinsic value. These can include properties like real estate, commodities such as gold and oil, and infrastructure like bridges and roads. Unlike financial assets, which are based on contracts or claims, real assets can provide a hedge against inflation and often appreciate over time. Investing in real assets can offer diversification benefits to a portfolio. They tend to have a low correlation with traditional financial markets, meaning their value may not move in tandem with stocks or bonds. This can help reduce overall investment risk while providing potential income through rents or resource extraction.