• An asset class is a group of investments that have similar characteristics and are subject to the same laws and regulations.

  • Stocks (eg shares), fixed income (eg bonds), cash and cash equivalents, real estate, commodities and currencies are common examples of asset classes.
  • There is usually very little correlation, and in some cases negative correlation, between different asset classes.
  • Financial advisors focus on the asset class to help investors diversify their portfolios.