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Income vs Growth

Types of investments

When it comes to investing in managed funds there are a wide range of investment options to choose from - be it income assets, growth assets, or diversified funds that offer a combination of both.

The right type of investment for you will depend on your investment objectives, timeframe and appetite for risk.

Defensive Assets (also known as income assets) These assets are generally more stable. They tend to carry lower risk levels and are more likely to generate lower levels of return over the long term. They include: Cash, Bonds and Fixed interest.

Growth Assets These assets tend to focus on capital growth and income. They can be considered higher in risk and may exhibit fluctuating returns over the short-term. They include: Property and shares

What is my current life stage?

  • Are you looking to build wealth for the long-term?

  • Are you saving for a holiday?

  • Are you retired and looking for a regular income?

Summary of asset classes

 

Asset class Typical Investment timeframe Perceived risk Type of return Examples
Cash Short-term
1-2 years
Low Income and no growth Bank accounts
Cash Management Trusts
Fixed Interest Short-medium term
3-5 years
Low-medium Income and some growth Bonds
Debentures
Mortgage trusts
Property Long-term
>5 years
Medium – high Income and growth Commercial/Industrial
Property Trusts
Shares Long-term
>7 years
High Growth and some income Shares listed on the Australian and International markets

 

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