A resource of economic value from which future financial benefits are expected to flow. For example, shares, property, or bonds.

Asset allocation

How an investment is spread across the different asset classes.

Asset class

A category of investment, such as shares, fixed interest or property.

Capital growth

The increase in value of an asset over time.

Consumer Price Index (CPI)

A measure of inflation that compares the cost of living (i.e. goods and services) over time. CPI is calculated and reported by the Australian Bureau of Statistics.  


Derivatives can refer to a wide range of financial instruments, the most common of which are futures and options. They are called derivatives because they typically ‘derive’ their value from the value of an underlying security.


Spreading your money across different assets, investment options, investment managers or localities to help reduce risk. In other words, not putting all your eggs in one basket.


A payment made by a company to its shareholders. The payment is a portion of the profits of the company and is based on the shareholder’s number of shares.


A group of investments that measure and represent the performance of a specific market or asset class. For example, the S&P/ASX 300 Accumulation Index (ASX 300) is used as a common measure of the Australian share market and is made up of the top 300 ASX listed shares by market capitalisation. 

Insurance premium

An amount that you pay for insurance coverage.

Investment manager

A person or organisation who manages investments on behalf of the trustee.

Investment style

The philosophy followed by an investment manager in selecting investments. For example, value investing is an investment style focused on buying shares that appear to be underpriced compared to their true value.


The ease with which an asset can be sold and converted to cash.


Assets are listed if they are traded through a public exchange or market, such as the Australian Stock Exchange (ASX). Their value is determined by the market and prices will fluctuate as listed assets are bought and sold. 

Long term

An investment held for an extended time horizon, such as 10 or more years.


The chance that an investment’s actual return could be negative or different from what you expected.  


A financial instrument which has some type of monetary value. For example, shares or bonds.


Refers to size and pace of fluctuations in the price of an asset.


The income generated by an investment. The yield is usually expressed as an annual percentage based on either the initial price paid for the investment or the investment’s current market value.