In today's rapidly evolving global economy, investors seek tangible opportunities that offer both financial stability and growth potential.

Energy-related real assets stand out as a compelling choice, providing intrinsic value derived from physical properties and essential services that power modern life.

These investments encompass infrastructure like pipelines and storage facilities, which generate stable income via long-term contracts, making them a hedge against inflation and market volatility.

By understanding this asset class, you can diversify your portfolio and tap into megatrends shaping the future.

What Are Energy-Related Real Assets?

Energy-related real assets refer to physical investments in energy infrastructure and natural resources.

Unlike financial assets, they offer inherent worth through the production, delivery, and storage of energy.

This includes everything from oil and gas pipelines to renewable energy projects and advanced storage systems.

These assets are crucial for economic growth, supporting urbanization, industrial expansion, and the global shift toward sustainability.

Investing in them means backing the backbone of modern society, with benefits like consistent cash flows and inflation protection.

Core Categories for Investment Opportunities

Energy-related real assets can be broken down into key categories, each offering unique advantages.

• Midstream Energy Infrastructure: This includes pipelines for oil, natural gas, and emerging fuels like hydrogen. Examples are liquefied natural gas (LNG) terminals and transmission grids.
• Storage Assets: From battery storage for renewables to gas and hydrogen storage, these projects enhance grid reliability and support energy transition.
• Power Generation and Utilities: Covering traditional sources like oil rigs and modern renewables such as solar and wind, plus nuclear small modular reactors (SMRs).
• Downstream and Services: Involving equipment, distribution, and processing that ensure energy reaches end-users efficiently.

Each category aligns with broader trends, offering scalable opportunities for long-term growth.

To help visualize these categories, here is a table summarizing key aspects:

Key Trends Shaping the Future in 2026

The energy landscape is transforming, driven by technological advancements and global priorities.

• Grid Reliability and Massive Investment: Europe requires €1.4 trillion in grid investments by 2035, with new transmission projects and storage systems to meet rising demand.
• Data Centers and AI Demand: Energy loads from data centers are projected to grow significantly, creating opportunities for on-site power assets and long-term contracts.
• Renewables Acceleration: Despite subsidy cuts, renewable projects are booming, with hybrid models combining sources like solar and wind to reduce volatility.
• Multi-Molecule Transition: This involves repurposing gas pipelines for hydrogen and developing carbon capture networks to enhance energy security.
• Nuclear and Diverse Clean Energy: Private investment is reviving nuclear power, especially SMRs, to support tech infrastructure and decarbonization goals.

These trends highlight enduring appeal through megatrend alignment, ensuring that energy real assets remain relevant.

Investment Vehicles for Practical Diversification

To access this asset class, investors can use various financial instruments that offer exposure without direct ownership.

• ETFs and Funds: Options like the Virtus Real Asset Income ETF (VRAI) provide diversified income from equities in energy infrastructure.
• Specialized ETFs: The SPDR SSGA Multi-Asset Real Return ETF (RLY) includes commodities and TIPS for broader inflation hedging.
• Energy-Focused Funds: Invesco's MLP Alpha Fund (MLPAX) targets midstream assets, offering high yields and growth potential.

Performance insights show that these assets often outperform stocks and bonds over cycles, thanks to their physical backing and income stability.

However, risks include regulatory changes and price volatility in unsubsidized sectors, so due diligence is key.

Global Investment Scale and Projections

The scale of investment in energy-related real assets is immense, reflecting their critical role in the global economy.

• Europe: Infrastructure investment is set to double in the next decade, with grid upgrades and storage projects leading the way.
• Global Trends: Energy transition investments reached $2.3 trillion in 2025, driven by hotspots in renewable energy and transport infrastructure.
• Opportunities: Hybrid assets that combine multiple energy sources are gaining traction, along with private sector roles in grid development.

This growth is fueled by increasing demand for reliable power, especially from emerging technologies like AI and electric vehicles.

Challenges and How to Overcome Them

Investing in energy real assets comes with challenges, but strategic approaches can mitigate risks.

• Subsidy Reductions: As government support wanes, focus on projects with strong fundamentals and long-term contracts to ensure revenue stability.
• Price Volatility: Diversify across asset types, such as mixing storage with generation, to balance exposure to market fluctuations.
• Resource Shortages: Invest in technologies that enhance efficiency, like advanced storage systems, to address supply chain constraints.

By embracing these strategies, investors can leverage scarcity premiums for higher returns and contribute to a sustainable future.

Inspiring Takeaways for Investors

Energy-related real assets offer a pathway to resilient investing in an uncertain world.

They provide not just financial rewards but also a chance to support essential services that drive progress.

With trends like digitalization and decarbonization accelerating, now is the time to explore this dynamic asset class.

Start by researching ETFs or funds, consider diversifying across categories, and stay informed on global developments.

By doing so, you can build a portfolio that stands the test of time, backed by tangible assets with enduring value.