Types of investment
The different types of investments are often referred to as ‘asset classes’ – some common examples include company shares (or ‘equities’), bonds, property, commodities and cash. The asset classes that are available for you will depend on the funds selected for your Plan, by the trustees, your employer and their investment adviser.
The performance of different asset classes will naturally vary over time. As each asset class has its own unique characteristics, wider market conditions and world events will affect them differently. That’s why it’s important to consider spreading your savings over a range of funds – It may help you to manage the investment risk of your savings falling in value if one asset class is out of favour. This strategy is referred to as ‘diversification’. It is important to remember that the value of investments can fall as well as rise and you may get back less than you invest.
Watch our short video about asset classes.