Question 1

What's an asset class?

Accepted Answer

An asset class is a group of investments (assets) with similar characteristics.

Question 2

What does asset allocation mean?

Accepted Answer

Asset allocation means how much we invest in a type of asset for an investment option. So if an investment option invests in 50% fixed income assets, we say that the asset allocation to fixed income is 50%.

Question 3

What are growth assets?

Accepted Answer

Growth assets are investments with the potential to deliver stronger medium to long-term returns. The trade-off is that they have a higher risk of giving short-term losses.

Question 4

What are defensive assets?

Accepted Answer

Defensive assets are investments with a lower chance of making a loss. The trade-off is that they usually give lower returns, sometimes not even enough to keep up with inflation.

Question 5

What are Australian shares?

Accepted Answer

Buying shares means investing in listed companies. This asset class invests in shares in companies that are listed in Australia. Returns can come from dividends (income) and the change in the value of the shares. Shares have historically had better returns than other asset classes over the long term, but their value is more likely to go up and down over the short term.  Growth or defensive? 100% growth, 0% defensive

Question 6

What are international shares

Accepted Answer

Shares in companies that are listed in internationally. Buying shares means investing in listed companies around the world. Returns can come from dividends (income) and the change in the value of the shares. Shares have historically had better returns than other asset classes over the long term, but their value is more likely to go up and down over the short term.  Growth or defensive? 100% growth, 0% defensive

Question 7

What are unlisted assets and alternatives

Accepted Answer

This asset class has a different return pattern to other standard asset classes. Some of our investments in this category can be growth assets, and others defensive. Unlisted assets - Private equity (e.g. shares in private companies), Infrastructure,Property (e.g. office shopping centres or buildings) Private credit (loans). Alternatives - Investments that are different to conventional assets like shares or cash.Growth or defensive? - A mix of growth and defensive assets (Private equity: 100% growth,Infrastructure, property, private credit, and alternatives: 50% growth, 50% defensive)

Question 8

What is fixed income

Accepted Answer

Fixed income assets look like loans. They have set interest rates, typically earn regular interest, and have a principal which gets repaid at the end of the loan. Growth or defensive? 100% defensive, 0% growth

Question 9

What is cash?

Accepted Answer

Investments in cash include money at call, bank bills, term deposits. Growth or defensive? 100% defensive, 0% growth

Question 10

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Accepted Answer

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Question 11

What is listed property?

Accepted Answer

This option invests in listed real estate companies and Real Estate Investment Trusts (REITs) worldwide. When you buy listed property, you're actually buying shares in companies that own, manage, or develop property. These could be office buildings, shopping centres or airports.

Question 12

What are bonds?

Accepted Answer

The Bonds Index option invests in global fixed income assets.  These assets pay regular interest with the principal is repaid at the end of the loan term. These assets are 100% defensive.

Question 13

Is it risky to invest in shares?

Accepted Answer

Shares have historically delivered better returns than other public asset classes over the long term, but their value is more likely to go up and down over the short term.  Shares earn returns from payments of dividends and changes in their value. Australian shares can earn some income from overseas operations, which means currency movements can affect their value.  Likewise, international shares can give you access to market segments that might not be available in Australia. But currency movements will affect their value.

Question 14

What does hedged and unhedged mean?

Accepted Answer

Hedging is a way of lowering the risk that you lose money when an overseas investment you hold becomes less valuable because of a change in the value of the Australian dollar. In other words, hedging aims to protect the value your international investments from being too strongly affected by exchange rates. It means that exchange rates should have less impact on how these investments perform. Hedged means we've locked in a fixed exchange rate for these assets. Unhedged means international exchange rates directly affect the value of your investment. Sometimes this means stronger returns when exchange rates become more favourable. But it can also mean bigger losses if exchange rates don't perform well.

Question 15

What does indexed mean?

Accepted Answer

Indexed means the option's invested in a portfolio of assets that aim to closely match the returns of a standard performance benchmark (or market index). They're passively managed, so they might also have lower investment fees than our actively managed options. To learn more, read the Investment Guide.

Investment option	Australian shares	International shares	Unlisted assets & alternatives	Fixed income	Cash
High Growth	32.25%	33.25%	31.5%	1.0%	2.0%
Balanced	25.5%	27.25%	30.0%	15.25%	2.0%
Conservative-Balanced	17.25%	19.25%	26.0%	35.5%	2.0%
Conservative	8.5%	9.0%	25.5%	44.25%	12.75%
Balanced Risk-Adjusted	21.75%	23.75%	30.0%	23.5%	1.0%
Socially Conscious Balanced	25.5%	27.5%	28.0%	17.0%	2.0%
High Growth Index	39.75%	50.25%	n/a	10.0%	0.0%
Balanced Index	32.5%	42.5%	n/a	25.0%	0.0%

Investment option	Allocation
Australian Shares Index	100% Australian Shares
Intl. Shares Hedged Index	100% International Shares
Intl. Shares Unhedged Index	100% International Shares
Listed Property Index	100% Listed global property
Unlisted Assets	Mostly unlisted (private) assets with a 5% strategic allocation to listed property to help manage liquidity.
Bonds Index	100% Fixed income
Cash	100% Cash¹

Compare asset allocations

Why compare asset allocations?

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Asset types

Australian shares

Fixed income

International shares

Cash

Unlisted assets and alternatives

Diversified options

Asset class options

Lifecycle investment strategy

FAQs about asset allocation