Asset classes

Asset classes are groupings of similar investment types that are used to categorize and understand the types of investments available to individuals. Asset classes help investors to diversify their portfolios, as well as understand the potential risks and rewards associated with each type of investment.

It is important to note that growth is not guaranteed when investing in any asset class. The value of any investment is affected by economic, political and commercial factors that are outside of any individual investor’s control, and it is therefore recommended that investors aim to spread their investment across a range of opportunities to create a diverse portfolio.

Investing in a range of asset classes can help to mitigate the impact of any one particular market downturn, as the performance of one asset class may not be directly correlated with another. By spreading your investment across different asset classes, you may be able to reduce the overall risk in your portfolio.

The following are some of the common asset classes:

Cash and Money: Bank accounts, cash ISAs, and Premium Bonds
Fixed-Income Securities: Corporate bonds and government bonds / gilts
Property: Commercial funds
Equities: Stocks and shares
Alternatives: Investment products that do not fit into the other categories

Asset Classes

Cash and Money Cash and money assets are investments that provide low returns but are highly liquid and low risk. Examples of cash and money assets include bank accounts, cash ISAs, and Premium Bonds.
Fixed-Income Securities Fixed-income securities are investments that provide a fixed rate of return over a specific period of time. Corporate bonds and government bonds/gilts are examples of fixed-income securities.
Property Property investment funds invest in commercial properties to generate returns. They can be less liquid compared to other asset classes and are generally considered to be a higher risk investment.
Equities Equities, also known as stocks and shares, represent ownership in a company. They can offer potentially higher returns than other asset classes, but also come with higher risks.
Alternatives Alternatives include a variety of investments such as commodities, hedge funds, private equity, and real estate investment trusts. These assets can provide diversification to an investment portfolio and can offer returns that are uncorrelated with traditional investments.

Back to investments page

The value of investments can fall as well as rise and you may not get back the amount originally invested.

How can Patrick Wayne Wealth help you?

PW wealth is here to help you. We’ll work with you, assess your current circumstances, review your retirement goals and help you put in place a pension strategy to meet them, ensuring that having a ‘financially secure and comfortable retirement’ isn’t something that’s left to chance.

Talk to an Adviser