Investing in assets

You can choose to invest in a range of funds, which invest in different types of assets, like equities, bonds, or cash. The performance of different asset classes will naturally vary over time. As each asset class has its own unique characteristics, wider market conditions and world events will affect them differently. You may choose to invest your contributions in any or all of the following asset classes.

The main asset classes

Learn more about the benefits and considerations for each asset class.


Cash investments include bank or building society accounts, bank deposits and cash funds provided by investment management companies.

Things to consider


Bonds are corporate and government loans with you playing the part of the lender, in exchange for receiving interest payments over a set period of time.

Things to consider


Also known as stocks and shares, equities represent part ownership of a company. When you buy a share in a company, you’re actually buying a piece of that company, so the investment return you earn depends on the success or failure of the company itself.

Things to consider


Property funds often invest in commercial property rather than the residential market but you should still consider your house and any buy-to-let properties you own as part of your investment portfolio. Property funds benefit from the ability to invest in large commercial projects like shopping centres and retail parks. Fund managers can commit more capital to these properties and deal with fewer landlords than investing in residential schemes, as a result. Property funds also allow investors to invest smaller amounts than would be necessary to buy a physical asset.

Things to consider


Diversification is essentially the principle of not ‘putting all your eggs in one basket’. In investment terms, this means if you invest all your money into one fund or one type of asset class and it does badly, you could face a big loss. If you spread-out or ‘diversify’ your portfolio across a number of different investments, you’ll be in a better position to withstand any potential losses from a single asset class.

You can further diversify your portfolio by:

  • Investing in a combination of stock markets within different countries, so that your investment won’t depend on the fortunes of just one market, such as the UK.
  • Investing in a mixture of the various types of investment funds, spreading your money across equities, property, bonds and cash, helping to minimise the impact of a single asset class on your portfolio.