The asset manager notes that core real assets tend to be characterised by a steady and predictable income stream. These reliable cash flows are underpinned by contractual assets backed by strong counterparties. Moreover, core real assets generally have low levels of volatility and less correlation to public markets, it adds.
Fixed income assets, in particular bonds, are traditionally popular among income-seeking investors. Their steady recurring income plus attractive yields help to deliver sustainable returns. But with low to negative yields amid a low interest rate environment, bonds no longer offer an attractive level of income. Where can investors seek attractive income generating assets?
JPMorgan Asset Management (JPMAM) believes real assets may offer a viable alternative. Such opportunities can be found in certain segments of the property, infrastructure and transportation industries, it says. The asset management firm reckons real assets are the new bonds.
