Asset Classes
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Referred to as Defensive assets
(focus on generating income only) | |
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Cash
Cash generally refers to investments in bank bills and similar securities which have a short investment timetable. They provide a stable, low risk income, equally in the form of regular interest payments. |
Fixed interest
Mostly government bonds, corporate bonds, mortgages and hybrid securities which generally operate in the same way as loans. The income return is usually in the form of regular interest payments for an agreed period of time. |
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Risk and potential return: |
Risk and potential return: |
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Minimum suggested timeframe:
No minimum |
Minimum suggested timeframe:
1-3 years | |
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Referred to as Growth assets
(focus on capital growth and income) | |
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Property securities
Property securities are shares in property investments that are listed on share markets. Sectors include commercial, retail, hotel and industrial property.
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Australian shares
A share represents part ownership of a company. Shares are generally bought and sold on the stock exchange. Returns usually include capital growth (or loss) and income through dividends which may be franked (ie the company has already paid tax on the earnings).
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International shares
International shares generally work the same as Australian shares. The additional benefit is the increased opportunity to invest in a much wider range of countries (eg Europe, Asia) and a broader selection of companies (eg Microsoft, Johnson and Johnson) outside Australia. However currency valuations can negatively affect performance. |
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Risk and potential return: |
Risk and potential return: |
Risk and potential return: |
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Minimum suggested timeframe:
3-5 years |
Minimum suggested timeframe:
5-6 years |
Minimum suggested timeframe:
5-7 years | |
* The risk indicators and minimum suggested timeframes used for each asset class are illustrative only and should not be considered advice – Source Colonial First State
