Asset classes
In simple terms, an asset is an investment used to gain a return.
Assets are divided into asset classes, such as:
- Shares (Australian, global shares and emerging market shares)
- Private equity
- Absolute return
- Property
- Infrastructure
- Alternative debt
- Fixed interest
- Cash
Each standard Cbus investment option invests in a range of different asset types, except Cash Savings, which invests only in cash investments.
The amount allocated to each asset class largely determines the overall risk and return outcome from each investment option.
| Asset classes | Description | Asset type | Source of return | Risk level | Return potential |
|---|---|---|---|---|---|
| Shares (Australian, global shares and emerging market shares) |
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 not listed on the stock exchange). | Growth | Primarily capital gains (or losses) | High | High |
| Absolute return | Absolute return assets include investments that take advantage of short-term opportunities in the market. For example, providing loans to companies with viable business models that are currently experiencing funding difficulties.
It also includes investment in growth assets that do not fit the characteristics of shares or private equity. For example, the Cbus Art Collection. |
Growth | Primarily capital gains (or losses) | High | High |
| Property | Property investments include office, retail, residential and industrial buildings. Property investments can be made directly by buying an existing building by developing a building, or indirectly by buying shares in a listed or unlisted property trust.
Cbus invests in property directly (through our wholly-owned company Cbus Property) and indirectly in unlisted property trusts. We also have a small holding in global listed property trusts. |
Defensive and growth | Rental income, capital gains (or losses) |
Moderate to high | Moderate to high |
| Infrastructure | Infrastructure assets are facilities that provide services needed for the functioning of a society. They are often highly regulated by governments, due to their essential nature.
For example, transport systems (toll roads, bridges, airports, seaports), communications systems (satellites), utilities (water supply, power distribution, sewage), and social infrastructure (hospitals, education facilities). |
Defensive and growth | Dividends, capital gains (or losses) |
Moderate | Moderate |
| Alternative debt | Alternative debt investments are a type of fixed interest investment.
Cbus’ alternative debt investments are made up of bank loans, direct lending and corporate debt securities. These loans generally have lower credit ratings than investments in the fixed interest sector and as such command a higher rate of return to compensate the investor for the risk of default. |
Defensive and Growth | Primarily income | Moderate | Moderate |
| Fixed interest | Fixed interest investments typically involve lending money to either governments or companies.
Cbus' fixed interest asset class generally comprises loans to governments, government-related organisations and companies that are rated highly by credit ratings agencies |
Defensive | Primarily income | Low to moderate | Low to moderate |
| Cash | Cash investments include bank deposits, cash management trusts and money market investments that can be converted to cash very quickly. The return of the asset class tends to be close to the cash rate set by the Reserve Bank of Australia. | Defensive | Interest | Low | Low |