Investment assets by asset class

Equities/stocks

Common shares: a unit of ownership in a company, also known as a ‘voting share’ or ‘ordinary share’.

Preferred shares: similar to common shares, with key differences being a lack of voting rights and a higher priority on company assets. Preferred shares are often issued during funding rounds.

International shares: shares in companies listed on overseas stock exchanges.

Equity indices: the composite value of a group of shares, intended to be representative of a particular sector of the market.

Small-cap, mid-cap and large-cap shares: the total value of a company’s shares, banded into smaller, medium and large-sized companies.

Sector-specific shares: shares focused on a particular industry sector, for instance pharmaceuticals or energy.

Fixed income

Government bonds: a debt security issued by a national or local government, with fixed interest payments.

Corporate bonds: similar to government bonds, corporate bonds are issued by businesses in order to raise funding and, again, provide fixed interest payments.

Municipal bonds (US): bonds issued by a state, county or district for operational costs or larger projects.

Convertible bonds: bonds that are typically issued by corporations, and can be converted into shares, subject to certain conditions.

Investment-grade bonds: corporate bonds given medium or high ratings by credit agencies, and which are considered to be at lower risk from default than those issued with lower credit ratings.

High-yield bonds: also known as ‘junk’ bonds, these are a type of corporate bond, rated below investment grade by credit agencies, but with the potential to offer higher returns.

Cash and cash equivalents

Bank savings accounts: a type of deposit account that provides an agreed rate of interest, most commonly used for personal finances.

Money market funds: a type of mutual fund aiming to provide a stable net asset value alongside returns in the form of dividends.

Certificates of deposit (CDs): a financial product often offered by banks allowing investors to deposit an agreed amount of money over a set period, often offering higher rates of interest than traditional savings accounts.

Treasury bills: ‘T-bills’ are short-term securities offered by the US government with a range of maturity periods. They are purchased at a reduced price and are redeemed for the full value on maturity.

Real estate/property

Residential property: investment in homes providing income either via rent payments or capital gains if a property’s value increases over time.

Commercial property: similarly to residential property, investors seek either a consistent return via rental income or capital appreciation of the property value. Commercial real estate typically requires a higher initial investment and may be more susceptible to economic conditions than residential investments.

Real estate investment trusts (REITs): these companies manage portfolios of real estate investments, allowing investors to invest in property and real estate without the need to buy or manage property, typically offering dividend payments or returns from increases in the company’s share value.

Industrial real estate: investors in industrial real estate may seek properties with longer leases and lower potential maintenance costs than the commercial or residential equivalents.

Land development: these investments typically involve the purchase of under-developed land with a view to increasing its value by developing it for commercial, residential or industrial projects.

Commodities

Precious metals: these metals include gold, silver, platinum and palladium, and are sometimes viewed as having lower volatility than other potential investment asset classes.

Energy commodities: these commodities include crude oil, coal and natural gas and can sometimes include electricity itself and renewable energy sources such as wind or solar power.

Agricultural commodities: these consist of crops such as grains, oilseeds, dairy products, livestock and ‘soft commodities’, such as coffee and sugar.

Base metals: these metals are typically those used for commercial or industrial applications, including copper, zinc, nickel and aluminium.

Alternative investments

Hedge funds: hedge funds are private investment partnerships, typically seeking higher returns by using more advanced investment strategies.

Private equity: investments directly in private companies or company buyouts, typically by wealthy individuals or institutional investors.

Venture capital: investments in startup companies and smaller businesses believed to have high growth potential, often providing returns in the form of equity stakes.

Collectibles: includes art, coins stamps and memorabilia, and can be both a hobby and an investment.

Cryptocurrencies: decentralised virtual currencies, secured by cryptography, which frequently use blockchain technology – a distributed ‘ledger’ that records all transactions on the network.

Foreign exchange (forex): the trading of currency, typically in decentralised marketplaces, likely to be heavily influenced by global economic factors.

Derivatives: financial instruments traded on exchanges or over the counter, including options, futures, forwards and swaps.