What are the 18 asset classes?

These are broadly categorized as asset classes and some examples include, but are not limited to, cash and cash equivalents, bonds, derivatives, equities, real estate, gold, commodities, and alternative investments.

What are the financial asset classes?

Historically, the three main asset classes have been equities (stocks), fixed income (bonds), and cash equivalent or money market instruments. Currently, most investment professionals include real estate, commodities, futures, other financial derivatives, and even cryptocurrencies to the asset class mix.

How many different asset classes are there?

three
Asset classes consist of a group of securities with varying degrees of risk. There are three main asset classes.

How are financial instruments different from asset classes?

Asset Class vs. Financial Instrument Financial instruments like options, futures or ETFs are not considered asset classes, although part of the asset class definition (e.g. similar regulations) fits them. Asset classes are about economic substance, not form. Different Instruments, Same Asset Class

Which is the best example of an asset class?

Asset classes are defined as groups of investments which have similar characteristics and behave in a similar way. Equities (stocks and shares) are one of the most famous asset classes, but there are also 8 others which I’ll cover in this overview of asset classes. Asset classes are the raw ingredients for an investment portfolio.

How are asset classes and investment vehicles related?

Asset classes and asset class categories are often mixed together. Financial advisors view investment vehicles as asset class categories that are used for diversification purposes. Each asset class is expected to reflect different risk and return investment characteristics, and performs differently in any given market environment.

Why are asset classes important in an investment portfolio?

Asset classes are the raw ingredients for an investment portfolio. How you decide to blend together these different types of investments will determine the expected return, the risk and the liquidity profile of your holdings. If done skillfully, complementary asset classes can actually reduce the total risk of your portfolio.