Glossary
Asset Class
An asset class is a group of assets with similar characteristics and comparable behaviour in the market. Typical asset classes are equities, bonds, cash, real estate and alternative investments such as private markets. Different asset classes often react differently to economic developments. Spreading wealth across several asset classes is a central element of diversification.
At a glance
01
An asset class groups together assets with similar characteristics, such as equities or bonds.
02
Different asset classes often react differently to the market environment.
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Allocating across several asset classes is the basis of diversification.
Frequently asked questions
The classic asset classes include equities, bonds and cash. They are joined by real estate as well as alternative investments such as private markets or commodities. Each asset class has its own risk and return profile.
Because different asset classes often react differently to economic developments, spreading across them can reduce a portfolio's overall risk. This allocation is also known as asset allocation. It does not eliminate risk but can spread it more broadly.
