Asset Class

Dictionary Says

Definition of 'Asset Class'

A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed-income (bonds) and cash equivalents (money market instruments).
Investopedia Says

Investopedia explains 'Asset Class'

It should be noted that in addition to the three main asset classes, some investment professionals would add real estate and commodities, and possibly other types of investments, to the asset class mix. Whatever the asset class lineup, each one is expected to reflect different risk and return investment characteristics, and will perform differently in any given market environment.

Asset classes and asset class categories are often mixed together. In other words, describing large-cap stocks or short-term bonds asset classes is incorrect. These investment vehicles are asset class categories, and are used for diversification purposes.

Related Definitions

  • Asset

    1. A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. 2. A balance sheet item ...
    Read More »
  • Bond

    A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used ...
    Read More »
  • Asset Class Breakdown

    The relative percentages of core asset classes such as equities, fixed income and cash, along with real estate and international holdings, found within a mutual fund, exchange-traded ...
    Read More »
    • Multi-Asset Class

      A combination of asset classes (such as cash, equity or bonds) used as an investment. A multi-asset class investment would contain more than one asset class, thus creating a group or ...
      Read More »
    • Cash Equivalents

      Investment securities that are short-term, have high credit quality and are highly liquid.Also referred to as "cash and equivalents".
      Read More »
    • Micro Cap

      A publicly traded company in the United States that has a market capitalization between approximately $50 million and $300 million. Micro-cap companies have greater market capitalization ...
      Read More »
    • Mega Cap

      The biggest companies in the investment universe, as measured by market capitalization. While there is no exact definition of the term, mega cap generally refers to companies with a ...
      Read More »
    • Like-Kind Property

      Any two assets or properties that are considered to be the same type, making an exchange between them tax free. To qualify as like kind, two assets must be of the same type (e.g. two ...
      Read More »
    • Auction Market Preferred Stock - AMPS

      A type of dutch auction that involves a process used to reset the interest payments, or dividends, that are paid on preferred stock or mutual fund shares. The auction usually takes place ...
      Read More »
    • Manager Of Managers - MOM

      A class of financial intermediary that hires professional investment managers to oversee aspects of a client's investment fund. More specifically, the MOM tracks the performance of each ...
      Read More »

Articles Of Interest

Partner Links