The Major Asset Classes 

The four major asset classes include:


Cash refers to investments such as bank deposits, cheque accounts and cash management trusts. Cash gives you income only (in the form of interest) and is the most secure form of investment.

However, the high level of security comes at a 'price', because over the longer term the return from cash is very low compared to other asset classes. A cash investment gives you interest only which means your capital does not grow in value over time, and you may face the prospect of your investment not keeping up with inflation.

Fixed interest 

Fixed interest investments are generally income-producing assets although the capital value can rise (or fall) in certain circumstances. They are generally for terms of one year or more and include government bonds, debentures, mortgage trusts and fixed term deposits.

With most fixed interest securities you invest for a set term at a set interest rate, and receive your capital back at the end of the particular term. As with cash, however, fixed interest investments often don't keep pace with inflation. 


The various types of property investments available include residential, industrial, commercial, retail and agricultural. Property investments can provide tax-advantaged income from the rent received and can also grow in capital value. Retail, industrial and commercial investments are usually made via specialist property trusts. 

Shares (equities) 

When you buy a share you're buying a stake in a company. As a shareholder, you share in the profits and future growth of that company. The ownership of shares can provide a growing income stream from dividends, as well as the potential for capital growth.

Dividends are the portion of a company's profit that it distributes to its shareholders.

Dividends paid by Australian companies often include the benefit of 'dividend imputation', where investors receive 'imputation credits' for tax already paid by the company. If the shares are held by a super fund these credits can be used to reduce the amount of tax that your super fund pays on your behalf or, if held outside super, may be used to reduce your personal taxation liability.

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