Asset class

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An asset class is a group of securities or other instruments that share similar characteristics, behave similarly in the marketplace, and are subject to the same regulations. Some of the asset classes most widely used by investors are equities (stocks), fixed-income (bonds), money market instruments, commodities and real estate.

Each asset class is expected to reflect different risk and return investment characteristics, and will perform differently in any given market environment.

Asset classes should not be confused with asset class categories. "Large-cap stocks" or "short-term bonds" are not asset classes; they are asset class categories, used for portfolio diversification.