Asset class descriptions

Our model portfolios are made up of a wide range of asset classes to provide you with a well diversified investment. The main asset classes are listed and described below.

UK Equities

UK companies issue shares (equities) to fund their businesses. In order to obtain access to a large number of investors, a company may seek a listing on a stock exchange, which allows its shares to trade on a stock market. Holders of shares in a company collectively own the company and are entitled to a number of shareholder rights.

Investment in UK equities provides a shareholder with potential to receive a perpetual and growing stream of income combined with scope for capital appreciation over the long term. In the event of a company failing it should be noted that its ordinary shares rank below all other forms of loan capital and share capital within its capital structure.

Overseas Equities

UK equities make up only a relatively modest proportion of the global stock market by market capitalisation. Consequently, there are many opportunities to invest internationally. However, it is worth noting that a company may not choose to list its shares in the country it is based, primarily due to the fact that the major stock exchanges (London, New York, Tokyo) can provide access to a larger and wider base of investors. Shares may also be dual listed on two different exchanges.

Equities in developed countries are usually considered less risky than those in emerging markets and generally display less volatility. Dividend payments from overseas equities tend to be lower than those paid by UK companies but the potential for capital gains may be greater. UK investors should also bear in mind the implications of currency fluctuations.

Fixed Interest Securities (Bonds)

Bonds are a type of IOU issued by governments and large corporations in order to borrow money. Bonds typically pay out a fixed income over a known period of time combined with a fixed capital repayment on maturity. These investments have varying durations ranging from short-dated (under 5 years) to long-dated (over 15 years). Some issues are undated and can only be redeemed at the discretion of the issuer. The capital value of a bond changes during its lifetime as it is traded by investors.

Harvey Curtis Technical Guides

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Commercial Property

The UK commercial property market is broadly divided into three main sectors – retail, offices and industrials. All have similar characteristics in that an investment in property provides potential for capital appreciation combined with a regular income achieved through rents received from tenants. Rent is usually received exclusive of rates, insurance and repairs, all of which are paid for by the tenant. Most leases allow upward only rental reviews, giving potential for income growth. UK commercial property leases tend to be long-term, typically lasting ten years or more, providing a high degree of income visibility and security, regardless of market conditions.

Harvey Curtis Technical Guides

Read more details about Commercial Property

Overseas Property

Practices and traditions in other countries can be quite different from the UK and local advice should always be sought when considering an overseas property purchase or sale.

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