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What is an asset class?

An asset class refers to a group of assets that are considered to have similar risk and return characteristics.
VicSuper invests in five different asset classes:

  • Equities
  • Alternatives
  • Real assets
  • Fixed interest
  • Cash


Equities are often called company shares or stocks. This asset class potentially provides the highest average long-term returns but may also be subject to a higher risk of low or negative returns (high volatility) in the short to medium term.

Equities are classified as growth assets because they primarily provide returns in the form of capital gain (or loss) as well as a dividend or income yield.

Our investments in this asset class are shares in public companies listed on stock exchanges, which can be bought and sold by the public. The asset class is made up of two main sub-asset classes, being Australian equities and, international equities. The latter includes both developed and emerging market equities.

Returns are made when the market price increases and dividends are paid. On the other hand, investment losses are made when the market price of these shares decreases. Note our Australian and international equities asset classes can also include a small exposure to unlisted companies.


Investments in this asset class currently consist of, but are not limited to, Australian and international private (unlisted) equity, credit income and liquid alternatives. The private equity sub-asset class contains equities that are not listed on stock exchanges.

Over time other sub-asset classes may be added to alternatives. The alternatives asset class will hold investments that do not fall under any of the other asset classes.

Real assets

These are investments in property, infrastructure, and other assets. We have defined the ‘real assets’ asset class as exhibiting the attributes of both growth and defensive assets.


These are assets such as office buildings, shopping centres and industrial buildings. These investments are usually structured for capital growth and rental income. Returns are made from rental income and movements in property market value.

Infrastructure and real assets

These are assets that deliver services necessary for daily life and economic activity such as airports, seaports, railways, power and water utilities (including renewables), toll roads and pipelines. Returns are made from fees, patronage, rental income and the revaluation of assets.

Infrastructure assets includes investments in agriculture, including land and water assets, as well as timber assets (mainly plantation timber or managed forest) which are managed for the production of pulp, chip, sawn timber and higher-value wood products.

Fixed interest

These are investments in debt instruments issued by governments, semi-government agencies, supranationals/sovereign agencies and corporations. Often called ‘bonds’, they are issued for a set amount (the principal or face value) over an agreed period, usually at an agreed interest rate (the yield). Returns are made from regular coupon payments and the movement in capital value.


Cash investments include a range of short and medium-term interest-bearing investments, such as term deposits, bank bills and treasury notes. Typically the least risky of all asset classes, cash is often chosen by investors who want to access their money in the short to medium term. However, while the risk of negative returns from cash investments is much lower than for other asset classes, expected returns are also lower. The buying power of your money may also be reduced as it may not keep up with inflation. The value of a cash investment will fluctuate due to a number of factors, but primarily with the rise and fall in interest rates.

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