Investment glossary

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Asset allocation

The proportion of a portfolio which is invested in a specific asset class. A portfolio may include a combination of asset classes where the allocation to each is expressed as a percentage of the overall portfolio’s value.

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Asset class

A specific category of assets or investments. Some examples of asset classes include cash, fixed interest, property, infrastructure, shares, and private equity. Each asset class tends to carry a different level of risk as well as a different level of expected returns.

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Benchmark

A point of comparison for different investment strategies. It can be used to compare an investment's performance, returns, risk, or asset allocation. For example, to compare the performance of an Australian shares portfolio, an investor might compare their portfolio’s return to the return of the relevant index.

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Bonds

Bonds are loans to a company or government. In return, as the bond holder, you may receive regular interest payments (called coupon payments). All bonds have a set value, called 'face value', when first issued. Generally, if you hold the bond until maturity, you get back the face value of the bond (provided the issuer can repay this), whereas if you sell a bond before maturity, you get the market value. This can be higher or lower than the face value. While bonds are generally considered to be lower risk, they are not risk free.

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Cash

Cash includes money in bank deposits and other short-term money market securities, which may pay interest.

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Diversification

Some people think of this as not putting all your eggs in one basket. From an investment perspective it means spreading your money across a number of different investments/asset classes, rather than a few or even a single instrument or asset class.

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ESG

ESG investing is the consideration of environmental, social and governance factors in the investment approach. For example, in addition to traditional financial metrics, an investor may consider how an investment is exposed to climate change risks (E), modern slavery risks (S), risks arising from company culture (G) and many others. Read more about key ESG factors that UniSuper considers.

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Equity

Equity (or shares) are units in a company which may be traded between investors, they may be listed or unlisted. Profitable companies may pay dividends (income) to shareholders.

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Infrastructure

Physical assets which provide essential services such as roads, tollways and airports.

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Listed asset

An asset that is traded publicly on an exchange like the Australian Securities Exchange (ASX).

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Portfolio

A portfolio is a collection of assets held by an investor.

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Property

Property may include investments in land, real estate or real property across the industrial, retail, office and alternative sectors. These investments can be direct or indirect via entities known as ‘real estate investment trusts’ (or REITs).

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Strategic asset allocation

Strategic asset allocations outline a unique mix of asset classes and are long term targets. The actual allocations to each asset class may vary from an investor’s targets over time, so the investor may need to ‘rebalance’ (i.e., buy or sell assets) to ensure the mix of asset classes remains in line with their strategy.

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Time horizon

The amount of time that your funds will be invested before you need to access them (e.g., drawing down in retirement or making a major purchase such as buying a home).

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Unlisted asset

An asset that is traded privately between investors (i.e., not listed on an exchange like the ASX). These might include property, infrastructure assets and shares in private companies.

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If you can’t find the answer to your question, you can always contact us. For further information about how UniSuper invests, please see our How we invest your money document.