Asset classes
In simple terms, an asset is an investment that is used to generate a return.
Shares (Australian, global, emerging markets)
Private Equity
Assets are grouped into asset classes, which include:
Growth
Mixed (part growth/defensive)
Property
Infrastructure
Global Credit
Alternatives
Defensive
Fixed Interest
Enhanced Income
Cash
Each of Cbus' diversified Pre-mixed investment options invest in a range of different asset classes. The amount allocated to each asset class largely determines the overall risk and return outcome from each investment option. The exception is the Cash investment option, which only invests in cash investments.
The table below provides a brief explanation of the major asset classes and you can find more detailed information in the Investment Handbook (PDF).
| Asset classes | Description | Asset type | Source of return | Risk level | Return potential |
|---|---|---|---|---|---|
| Shares (Australian, global and emerging markets) |
A share in a company represents ownership. If you have a share in a company you are a part owner (usually referred to as a shareholder). |
Growth | Capital gains (or losses): increase (or decrease) in share price. Dividends: profits the company makes, distributed to shareholders. |
High | High |
| Private equity | Private equity investments are investments made in privately owned companies (companies that are mainly not listed on any stock exchanges). | Growth | Primarily capital gains (or losses). | High | High |
| Alternative growth | This asset class seeks to achieve returns from a range of growth investments with an emphasis on alternative strategies. These investments often have a low sensitivity to equity markets and interest rate risks. |
Growth | Primarily capital gains (or losses) or income from investments that pay dividends and interest. | High | High |
| Property | Property investments include office, retail, residential and industrial buildings as well as alternative assets (e.g., multi-family, storage, education and health care). Property investments can be made directly by buying an existing building, by developing a building, or indirectly by buying units in a pooled property fund. Cbus invests in property directly through our wholly-owned company Cbus Property. |
Defensive and growth | Rental income, rental growth and capital gains (or losses). | Moderate to high | Moderate to high |
| Infrastructure | Infrastructure assets are facilities that provide essential services to society. Examples include power utilities, airports and seaports. Cbus invests in Australian and global infrastructure in two ways: directly by owning a stake in the company operating the asset, or indirectly through buying units in a pooled fund. |
Defensive and growth | Operating income (such as fees on toll roads) and growth income. | Moderate | Moderate |
| Global credit | Global credit is expected to provide moderate returns over the long-term, with less volatility than shares. It covers investments in credit, both investment grade and sub investment grade, within Australia and overseas. It includes a range of instruments such as bonds, loans, structured credit, and other debt instruments. Lending to corporations may also include infrastructure debt and property construction debt. Diversified exposure to global credit markets provides sources of return that are complementary to other asset classes. |
Defensive and growth | Primarily income. | Moderate | Moderate |
| Australian fixed interest | Australian fixed interest investments typically involve lending money to either Australian governments or government related organisations at a fixed rate. | Defensive | Primarily interest income over the term of the loan. | Low to moderate | Low to moderate |
| Global fixed interest | Global fixed interest investments typically involve lending money to governments in developed countries at a fixed rate. | Defensive | Primarily interest income over the term of the loan. | Low to moderate | Low to moderate |
| Enhanced income | The enhanced income asset class includes investments in Australian and global investment grade credit securities, such as corporate and securitised, and is generally more stable than other asset classes with lower returns over the long term. | Defensive | Low to moderate | Low to moderate | |
| Cash | Cash investments include bank deposits, cash management trusts, term deposits and short term debt securities. Please note the Cash option includes a 50% allocation with the Australia and New Zealand Banking Group Limited (ANZ). | Defensive | Interest. | Low | Low |